Turner v Bayer Australia Ltd
[2021] VSC 241
•14 May 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
GROUP PROCEEDINGS LIST
S ECI 2019 02916
| PATRICE SARAH TURNER | Plaintiff |
| v | |
| BAYER AUSTRALIA LTD & ORS (according to the attached Schedule) | Defendants |
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JUDGE: | John Dixon J |
WHERE HELD: | Melbourne |
DATE OF WRITTEN SUBMISSIONS: | 9 February 2021 |
DATE OF JUDGMENT: | 14 May 2021 |
CASE MAY BE CITED AS: | Turner v Bayer Australia Ltd |
MEDIUM NEUTRAL CITATION: | [2021] VSC 241 |
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PRACTICE AND PROCEDURE – Group proceeding – Approval of discontinuance of proceeding – Where plaintiff seeks to discontinue proceeding as against two defendants and abandon certain statutory causes of action – Where approved notice of proposed discontinuance not given to group members – Consideration of appropriate test for approval of discontinuance as distinct from approval of settlement – Supreme Court Act 1986 (Vic) ss 33V, 33X, 33Y.
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WRITTEN SUBMISSIONS: | Counsel | Solicitors |
| For the Plaintiff | Ms F Forsyth with Ms M Szydzik | Slater & Gordon |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
The proceeding................................................................................................................................... 2
Discontinuance application............................................................................................................. 3
Withdrawal application.................................................................................................................... 5
Applicable legal principles.............................................................................................................. 5
Necessity of court approval......................................................................................................... 5
Notice to group members............................................................................................................ 6
Approval of discontinuance........................................................................................................ 7
Plaintiff’s submissions................................................................................................................... 11
Discontinuance application....................................................................................................... 11
Withdrawal application............................................................................................................. 12
Analysis.............................................................................................................................................. 13
Conclusion and orders.................................................................................................................... 15
HIS HONOUR:
Introduction
On 28 June 2019, the plaintiff commenced this group proceeding on behalf of all persons who had received an implant of a permanent contraceptive medical device marketed under the brand/label ‘Essure’ or ‘STOP’ in Australia (‘Essure devices’).
By a summons filed 1 February 2021, the plaintiff sought orders that, pursuant to s 33V of the Supreme Court Act 1986 (Vic) (‘Act’), the court approve:
(a) the discontinuance of the proceeding against the seventh and eighth defendants (‘discontinued defendants’); and
(b) the discontinuance of the claims against all defendants alleging:
(i) misleading and deceptive conduct (s 18 of the Competition and Consumer Act 2010 (Cth) sch 2 (‘Australian Consumer Law’) and s 52 of the Trade Practices Act 1974 (Cth)) at paragraphs 12(b) and 13(d) of the amended writ filed 19 December 2019; and
(ii) that Essure devices were not reasonably fit for purpose (s 55 of the Australian Consumer Law and s 74B of the Trade Practices Act) at paragraphs 12(d) and 13(a) of the amended writ.
The summons was supported by a written submission and an affidavit affirmed by Mr Andrew John Baker, the plaintiff’s solicitor.
Prior to the summons being filed, I indicated that I would determine the application on the papers unless that course was opposed, and invited the defendants to file and serve any submissions and materials on which they intended to rely. On 9 February 2021, the first to fourth and sixth defendants stated that they neither consented to nor opposed the plaintiff’s application. The fifth defendant did not indicate its position.
Although both are properly described as discontinuance applications, for convenience I will refer to the application regarding the discontinued defendants as the ‘discontinuance application’, and the application regarding the claims that are no longer pressed as the ‘withdrawal application’.
The proceeding
The proceeding is a product liability action concerning the Essure devices, which at the relevant time were permanent contraceptive implants — primarily consisting of a spring-like ‘insert’ in the form of two metal coils — that are inserted into a woman’s fallopian tubes. The Essure devices, when inserted, would expand to a diameter of 2 millimetres, causing tissue growth and occlusion of the fallopian tube, preventing pregnancy from occurring.
Figure 1: A depiction (not to scale) of the intended placement of the insert in a fallopian tube and uterine cavity.[1]
[1]As alleged in [17(b)] of the plaintiff’s statement of claim filed 20 December 2019.
The insert, the plaintiff contended, was not designed to be removed once inserted, and if removal was deemed necessary, that could likely only occur by surgically removing the fallopian tubes or uterus.
In her statement of claim, the plaintiff alleges that the Essure devices (specifically, the insert) were defective, as:
(a) the insert was designed in such a way that it caused chronic inflammation and incited a foreign body response;
(b) there was a risk that the insert would migrate, be expulsed, break or fragment, corrode or fatigue;
(c) there was a risk that the insert would perforate the fallopian tube, uterus or other organs; and
(d) there was a risk that the insert would leach nickel or other metals, or exacerbate pelvic pain, uterine cramping and/or menstrual bleeding.
The plaintiff alleges that in light of these defects, and the defendants’ involvement in the design, distribution and/or promotion of the Essure devices, the defendants breached their duty to exercise reasonable care to prevent harm arising from the Essure devices.
In addition to her claims in negligence, the plaintiff alleges that:
(a) the Essure devices were not of merchantable quality (Trade Practices Act ss 74D(1) and 74D(3)) and/or acceptable quality (Australian Consumer Law s 54);
(b) the Essure devices had a defect (Trade Practices Act s 75AC) and/or a safety defect (Australian Consumer Law s 9); and
(c) the defendants are therefore liable to compensate the plaintiff and group members for their loss and damage, pursuant to:
(iii) sections 138, 271 and/or 272 of the Australian Consumer Law; and/or
(iv) section 75AD of the Trade Practices Act.
Discontinuance application
In her amended writ, the plaintiff makes a bare allegation that the discontinued defendants, together with the second to fourth defendants, designed, developed and/or manufactured the Essure devices, or alternatively that liability had been transferred to them in respect of those matters. However, the plaintiff does not refer to, nor does she make any allegation against, the discontinued defendants in her statement of claim filed on 20 December 2019.
Mr Baker deposed that in 2019, the plaintiff sought to identify the necessary defendants. This task that was complicated as Essure devices were available for use in Australia for almost 20 years, and during that time different companies were responsible for various aspects of the products.
From documents lodged with the United States Securities and Exchange Commission by the fourth defendant and Integer Holdings, which related to their involvement in related litigation in the United States, the plaintiff formed the view that the discontinued defendants were manufacturers of the Essure devices.
In May and June 2019, the plaintiff and the first defendant (‘Bayer’) corresponded about the imminent commencement of the proceeding, including the extent to which the discontinued defendants were involved in the manufacture of the Essure devices.
The plaintiff understood that the original designer/manufacturer of the Essure devices was an entity known as Conceptus Inc.,[2] and that entity had transferred the manufacturing process to the discontinued defendants in 2004. In the context of identifying the appropriate defendants, the plaintiff asked Bayer about whether and how liability for the design and manufacture of the Essure devices had been transferred to other entities. Bayer replied that the information sought spanned a lengthy period and it would take some time to provide a response.
[2]Now Bayer Essure Inc., the fourth defendant.
To ameliorate any potential prejudice to group members through delay, the plaintiffs commenced this proceeding by generally indorsed writ shortly afterwards.
In September 2019, Bayer informed the plaintiff that Conceptus had only utilised the discontinued defendants as a third party subcontractor for manufacture of the Essure devices.
Neither of the discontinued defendants have been served with any court documents or taken any steps in the proceeding. The plaintiff has had no contact with the discontinued defendants, other than having sent them a letter in September 2019 to clarify whether they were necessary parties to the proceeding, receiving no response.
Withdrawal application
The endorsement of claim in the plaintiff’s amended writ alleged two further statutory causes of action, being that:
(a) the defendants engaged in conduct that was misleading and deceptive, or was likely to mislead and deceive, in contravention of s 18 of the Australian Consumer Law and/or s 52 of the Trade Practices Act; and
(b) the Essure devices were not reasonably fit for purpose, in contravention of s 55 of the Australian Consumer Law and/or s 74B of the Trade Practices Act.
The plaintiff seeks to withdraw those allegations, which are not pleaded out in the statement of claim.
Applicable legal principles
Necessity of court approval
Section 33V of the Act provides:
33V Settlement and discontinuance
(1) A group proceeding may not be settled or discontinued without the approval of the Court.
(2)If the Court gives such approval, it may make such orders as it thinks fit with respect to the distribution of any money, including interest, paid under a settlement or paid into court.
In Matthews v SPI Electricity Pty Ltd (Ruling No 16), I considered the extent to which a partial compromise of a group proceeding, as against a single defendant, required court approval.[3]
[3][2013] VSC 74, [8]–[13]. See also Laine v Thiess Pty Ltd [2016] VSC 689, [10]–[12], [14]; Jackson v GP & JM Bruty Pty Ltd [2016] VSC 717.
Section 3 of the Act defines ‘proceeding’ as ‘any matter in the court’. By virtue of that broad definition, the requirements of s 33V extend to any substantive claim — each a ‘matter in the court’ — made in a proceeding. Adopting a literal interpretation of the provision, and reading it as if court approval is only necessary for the compromise of a proceeding in its entirety, would be inconsistent with the court’s protective jurisdiction to be exercised in favour of group members.[4]
[4]Tasfast Air Freight Pty Ltd v Mobil Oil Australia Ltd [2002] VSC 457, [4].
I am satisfied that the both the discontinuance and withdrawal applications are properly matters for court approval.
Notice to group members
Section 33X(4) of the Act provides that:
Unless the Court is satisfied that it is just to do so, an application for approval under section 33V must not be determined unless notice has been given to group members.
Section 33Y requires that any notice given under s 33X be approved by the court, together with directions as to who is to provide the notice and the manner in which it is to be given.
No notice under s 33X has been given to group members foreshadowing the applications now before the court. However, on 29 October 2020, the plaintiff’s solicitors sent a letter about the applications to 382 individuals believed to be group members with whom they had contact. That letter summarised the applications and why it was in the interests of the group that they be made, and invited group members to contact them if they had questions or concerns about the application.
None of the five group members who replied to the correspondence expressed any concern or sought clarification about the applications, and their responses to that issue — which were in evidence — were either positive or neutral.
The discretion of the court to dispense with the notice requirement for a s 33V application needs to take into account the consequences for a group member of being bound by an adverse determination, should the application succeed, of which they have not had prior notice.[5] Factors relevant to the discretion include:
[5]Femcare Ltd v Bright (2000) 100 FCR 331, 347–8 [67].
(a) whether there was any real prospect that a group member, acting rationally, would oppose the orders sought;[6]
[6]Laine v Thiess Pty Ltd; Beetson v SunWater Limited [2016] VSC 689, [39].
(b) whether the expense and inconvenience of requiring the notice to be provided to group members would be disproportionate to any benefit that would arise;
(c) whether provision of notice will create a risk of confusion or uncertainty on behalf of group members;[7] and
(d) the court’s statutory obligation, enshrined by s 8 of the Civil Procedure Act 2010 (Vic), to seek to give effect to the overarching purpose to facilitate the just, efficient, timely, and cost effective resolution of the real issues in dispute in the proceeding.[8]
[7]Matthews v SPI Electricity and SPI Electricity Pty Ltd v Utility Services Corporation Ltd (Ruling No 16) [2013] VSC 74, [30]–[31].
[8]Ibid.
Approval of discontinuance
The majority of court decision engaging with s 33V are applications for approval of a settlement, where the relevant principles are well settled.[9]
[9]See, e.g., Blairgowrie Trading Ltd v Allco Finance Group Ltd (rec and mgr apptd) (in liq) (No 3) (2017) 343 ALR 476, 499–500 [81]–[85].
In Wotton v State of Queensland, Rares J noted the distinguishing features of a discontinuance approval application:
Under s 33V(1), a representative proceeding cannot be settled or discontinued without the approval of the Court. The decided cases on s 33V(1) all appear to have been concerned with settlements, rather than discontinuances. The considerations affecting a settlement are not always the same as a discontinuance. It is important that any order that is made has regard to the interests not only of the present parties but of group members who may be affected by the terms of any grant of leave to discontinue.
… it is important to ensure that any order by which these proceedings are brought to an end (by discontinuance or dismissal) not have a substantive impact on group members or affect their rights. The Court must be careful to guard against any injustice that could be done to persons who are not represented in these proceedings and whose rights may be adversely affected by their outcome…
The Court has an important responsibility of safeguarding the interest of group members as a whole under s 33V(1). There is a danger that when a settlement is reached or a discontinuance is agreed, the interests of the actual parties to the proceedings may receive their paramount consideration while the impact on group members may not be fully or properly addressed. That is why in exercising the power under s 33V(1) to approve a settlement or discontinuance the Court must scrutinise with great care the way in which any order is formulated. In the decided cases the Courts have approached settlements with a keen eye to ensuring that the interests of group members are vouched safe.[10]
[10](2009) 109 ALD 534, 544–5 [37]–[40] (‘Wotton’).
In Mercedes Holdings Pty Ltd v Waters (‘Mercedes Holdings’), eight unit holders in a publicly listed property managed investment scheme commenced a representative proceeding against fourteen respondents, who variously constituted auditors, the responsible entity of the scheme and its directors. Perram J declined to approve the discontinuance as against certain defendants. His Honour determined that the applicable test was akin to that on approval of a settlement:
The course of authority confirms that the task of the approving court is to assess whether the compromise or discontinuance “is a fair and reasonable” one which requires one to be satisfied that the settlement or discontinuance “has been undertaken in the interests of the group members as a whole, and not just in the interests of the applicant and the respondent”. Consequently, common sense suggests, and authority confirms, that the applicant for leave bears the onus of showing that the settlement or discontinuance is in the interests of all class members.[11]
[11](2010) 77 ACSR 265, 268 [10] (citations omitted) (emphasis added).
In Laine v Thiess Pty Ltd (‘Laine’),[12] I approved the discontinuance of two related group proceedings (in their entirety) that alleged negligence against a construction company and dam operator following heavy rain and flooding in Queensland.
[12][2016] VSC 689.
The plaintiffs commenced the proceedings very promptly after the relevant flooding events occurred (within 3 weeks in the case of one of the proceedings) in what appeared to be a race to the court house, without a thorough forensic investigation as to their basis. The writs remained unserved for nearly a year while further investigations were undertaken. Upon the plaintiffs’ realisation that the proceedings enjoyed very low prospects of success, the applications to discontinue them were brought.
Having regard to the plaintiffs’ slim prospects, a want of economic viability in the proceeding, the absence of any res judicata or impending expiry of a limitations period, and the conditional nature of the costs agreement, I concluded that:
I am satisfied that discontinuance of the proceedings will not adversely impact on the legal or financial position of any group members. Discontinuance of these proceedings will not be unfair or unreasonable or adverse to the interests of group members.[13]
[13]Ibid [34] (emphasis added).
Mercedes Holdings has been followed by the Federal Court in several subsequent decisions,[14] although recent decisions have commented on the utility in the approach adopted in Laine. In Simonetta v Spotless Group Holdings Limited, Yates J said:
The applicants suggested that the approach in Laine might be more apt where, as here, the practical effect of the discontinuance, if approved, will be to do no more than return group members to the position they were in before the commencement of the proceeding. I think there is some merit in that submission but, as the question was not addressed in any detail, and as my consideration of the present application does not turn on any difference between the approach in Mercedes Holdings and the approach in Laine, I will refrain from expressing any concluded view on it.[15]
[14]Tate v Westpac Banking Corporation (No 2) [2020] FCA 1374, [34]–[38]; Sister Marie Brigid Arthur (Litigation Representative) v Northern Territory (No 2) [2020] FCA 215, [70] (‘Sister Marie’); Davaria Pty Limited v 7-Eleven Stores Pty Ltd [2020] FCA 1234, [46], [49]; AUB19 v Commonwealth of Australia [2019] FCA 1722, [17]; Adams v Navra Group Pty Ltd [2019] FCA 1157, [19].
[15][2017] FCA 1071, [12].
In Babscay Pty Ltd v Pitcher Partners (‘Babscay’), Anastassiou J analysed the differences between a settlement and a discontinuance:
The Court’s task in considering whether to approve the discontinuance of a representative proceeding has a different emphasis compared with the approval of a settlement. The different emphasis arises because the nature of the act requiring approval is quite different, with different legal consequences.
The discontinuance of a proceeding in the strict sense is the unilateral act of the applicant. Leaving to one side the cost consequences, the discontinuance of the proceeding puts the applicant in the same position as if the proceeding had not been commenced, save for the effluxion of time in relation to any limitation period within which an action must be brought.
In relation to representative proceedings, the qualification just mentioned does not apply to group members. In such circumstances, time for the purposes of a limitation period is suspended upon the commencement of a representative proceeding and does not run again for a group member unless the group member opts out under s 33J or the proceeding is determined without finally disposing of the group member’s claim: s 33ZE(1) of the Act. I shall refer to the significance of this protection further below.
The legal effect of a unilateral discontinuance compared with a settlement agreement may be readily summarised as follows. In the case of a discontinuance, the applicant is free to commence a new proceeding against the same respondents if so advised. As there is no agreement by which the proceeding is compromised, there can be no merger of the applicant’s rights in the proceeding. Similarly, in the absence of any judicial determination, there can be no res judicata or issue estoppel.
In contrast, where a settlement agreement has been reached it will be binding upon all group members who have not opted out of the representative proceeding pursuant to s 33J of the Act. Subject to Court approval under s 33V of the Act, the rights of the group members merge in the settlement agreement, or in the case of an accord executory, merge upon performance of the terms of the agreement. The legal consequences for group members of a settlement agreement are therefore more significant, as the agreement will operate to extinguish their rights in the proceeding and bar them from bringing later proceedings in relation to the same causes of action.[16]
[16](2020) 148 ACSR 551, 555 [19]–[23].
His Honour then commented on the appropriate test:
The task of the Court when considering whether to give approval to the settlement is to determine whether the settlement represents a fair and reasonable compromise of the claims made on behalf of the Group Members. Plainly, that is not apt to describe the function of the Court in the case of a unilateral discontinuance of a representative proceeding. It is important not to conflate a settlement agreement, which, by its terms, mandates the discontinuance of the representative proceeding, with a unilateral discontinuance with which this application is concerned. A settlement agreement which requires performance on the part of the applicant by discontinuing the proceeding is no different in principle to an agreement which requires the applicant consent to orders dismissing the proceeding…
I respectfully agree with the articulation of the principle by Dixon J in Laine. In my view, his Honour’s statement of the principle to be applied in the case of a unilateral discontinuance, which does no more than return group members to the position they were in before the commencement of the proceeding, aptly describes the focus of the Court’s consideration in the present context.
I am satisfied that the discontinuance is not unfair, unreasonable or adverse to the interests of group members. I have reached this conclusion largely as a matter of analysis of the legal effect of the discontinuance discussed above. Indeed, it seems to me that in cases of unilateral discontinuance such as this, generally it should not be necessary for the applicant to be put to the trouble and expense of preparing detailed material, including obtaining a fully reasoned opinion from counsel addressing the prospects of success of the proceeding, or more aptly, the lack thereof, in support of the application for approval of the discontinuance.[17]
[17]Ibid 555 [24], 557–8 [28]–[29].
In Watson v Maximus Holdings (NSW) Pty Ltd, Wigney J said the following:
As was the case in Simonetta, it is unnecessary for the purposes of this application to decide whether the principle or test as expressed in Laine is preferable to the principle or test as expressed in Mercedes Holdings. For the reasons given later, the discontinuance of the proceeding was appropriate on either test. That is likely to be the position in many, if not most, cases such as this, where the discontinuance occurs at an early stage and in circumstances where the effect of the discontinuance is to return the group members to the position they were in before the commencement of the proceeding. Nevertheless, and to avoid any continuing uncertainty in relation to the matter, it should be noted that the approach taken by Anastassiou J in Babscay, endorsing the articulation of the principle in Laine, should be endorsed as the preferable approach in such cases. It is also particularly appropriate in a case such as this where it would appear (as was conceded by Mr O’Brien) that the group members were entirely unaware of the proceeding and there was no information as to how many group members there were, who they were or what their circumstances were, or would be, if the proceeding was discontinued. It is difficult to see how, in such a case, a positive view could be formed about whether the discontinuance would be unfair, unreasonable or adverse to the group members.[18]
[18][2021] FCA 87, [49].
Plaintiff’s submissions
Discontinuance application
The plaintiff submitted that it was appropriate for the court to approve both the discontinuance application and the withdrawal application.
First, the discontinued defendants were made parties to the proceeding to avoid any potential expiry of the limitation period while investigations as to their potential liability continued. No allegations were made against them in the writ or the statement of claim, and neither defendant had engaged with the proceeding since its commencement.
Second, the plaintiff’s claims in the proceeding relate to the design, distribution and promotion of the Essure devices. As a result of correspondence from Bayer after the proceeding was commenced, the plaintiff was satisfied that the discontinued defendants’ involvement was limited to the physical manufacture of the Essure devices. For this reason, she made no allegations against the discontinued defendants in her statement of claim, and maintains that the proper defendants are the first to fourth and sixth defendants.
Finally, Mr Baker’s conclusion — expressed in the confidential section of his affidavit — was that claims could be advanced against the discontinued defendants for the physical manufacture of the Essure devices, but that group members did not need to do so to succeed, as relevant causes of action were already being pursued against the other defendants. No substantive detriment would be occasioned by any group member if the discontinuance application was approved.
Withdrawal application
The plaintiff contended that although there is a reasonable basis for the allegations now sought to be withdrawn, she does not believe it is necessary to maintain them for her and group members to succeed. The factual allegations giving rise to those causes of action are substantially identical to other claims alleged by the plaintiff. Specifically:
(a) the conduct said to constitute misleading and deceptive conduct, or conduct likely to mislead and deceive, was the defendants’ failure to warn users of the Essure devices about the defects of which they knew or ought to have known, which is also the basis for the claims in negligence and for other statutory breaches; and
(b) the allegation that the Essure devices were not reasonably fit for purpose was already pursued by the plaintiff and group members via the claims that they were not of acceptable quality (s 54 of the Australian Consumer Law) and/or merchantable quality (s 74D of the Trade Practices Act).
The benefit in discontinuing the claims the subject of the withdrawal application would be a reduction in the size, complexity and cost of the proceeding.
In the confidential section of his affidavit, Mr Baker set out further reasons why the withdrawal application should be approved, including his opinion on the relative prospects of success of the claims sought to be withdrawn, and why the proceeding ought to be advanced on the other causes of action alleged. It is not necessary for me to repeat those additional matters, save to state that they were consistent with Mr Baker’s concluded view, expressed above, that it would be in the interest of the plaintiff and group members if those claims were not pressed.
Analysis
The issues for determination on an application to approve a discontinuance in a group proceeding differ to those on approval of a settlement. Although the overarching consideration for the court remains the same — whether the application is in the interests of group members[19] — differing views have emerged since my decision in Laine on what the precise test should be to determine that question on the approval of a discontinuance. The two varying approaches are whether the discontinuance is fair and reasonable and in the interests of group members, or whether the discontinuance would be unfair, unreasonable or adverse to the interests of group members.
[19]Wotton, 544 [37] (n 10); Sister Marie, [69] (n 14).
In most circumstances, any differences between these tests will be illusory. On this application, I adopt what I said in Laine. The proper assessment is whether the interests of group members would be unfairly, unreasonably or adversely affected by the approval of a discontinuance. With respect, I agree with the contribution of Anastassiou J in Babscay to this debate.
An application for approval of a settlement involves a bargain reached between the parties, where the benefits and drawbacks may be more readily apparent, permitting a balancing exercise to be undertaken between the advantages and disadvantages to group members.
In contrast, a discontinuance is the unilateral decision by a plaintiff to bring an end to some or all claims in the litigation. There is no agreement between the parties that can be assessed through the prism of a fair and reasonable test. Any favourable consequences to group members that may flow from a discontinuance are uniform and inherent in the act of withdrawing an issue from judicial determination; for example, the saving of future legal costs if the proceeding was pursued. It is not necessary for the court to consider those factors as part of a weighing up exercise. The court’s task in approving a discontinuance, in exercising its protective jurisdiction, is best served by considering whether any detriment would be occasioned by group members that would be unfair, unreasonable or adverse.
I am persuaded that neither the discontinuance or the withdrawal would result in the plaintiff and group members suffering any consequence that was unfair, unreasonable or adverse.
The proceeding does not make allegations in respect of the physical manufacture of Essure devices, but rather their design, distribution and promotion. The conduct being pursued did not involve the discontinued defendants and it is not necessary for them to remain parties to the proceeding. Their status as parties was to preserve the status quo, avoiding the possible expiry of limitations periods against all defendants, while further inquiries were undertaken. Had the plaintiff been aware of the nature of their involvement at the time the writ was filed, it is likely the discontinued defendants would not have been made parties to the proceeding. In that sense, there can be no prejudice to group members.
Likewise, the claims being withdrawn are ancillary to the causes of action that will be maintained in the proceeding. Although they may be capable of being independently advanced, nothing is to be gained from doing so in conjunction with the other claims. The primary allegations made in the proceeding are that the Essure devices were defective, and the defendants — by designing, distributing and promoting those devices, and failing to warn consumers about the risks associated with their use — have caused the plaintiff and group members to suffer loss and damage. Although that factual substratum may be capable of establishing a contravention under the misleading and deceptive conduct and fit for purpose claims sought to be withdrawn, I accept the plaintiff’s contention that group members have equal (or better) prospects of succeeding against the defendants via the merchantable/acceptable quality, defect/safety defect and negligence claims that are alleged.
I am also satisfied that group members will not suffer any materially adverse cost consequences if the discontinuance and withdrawal applications are approved. No entitlement to costs would arise in the case of the discontinued defendants, as neither of them have been served with the writ. Although the existing defendants are entitled to their costs by reason of the withdrawal,[20] the quantum of those costs is likely to be minimal, having regard to the early stage of the proceeding and the substantial overlap between the withdrawn claims and the remaining causes of action.
[20]Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.15.
It is just to determine the applications despite noncompliance with the notice requirements under s 33X of the Act. I do not consider that any group member, acting rationally, would oppose the discontinuance or withdrawal. The plaintiff’s solicitor has written to group members foreshadowing the applications, together with a detailed explanation as to why they have been brought and why they will not adversely affect their interests. In exercising the discretion to dispense with the notice requirement, I take account that none of the recipients of that letter have opposed the approval of either application.
Conclusion and orders
For the foregoing reasons, the discontinuance application and the withdrawal application will each be approved.
Noting that the other parties took no position on the discontinuance of the claims, I will order that costs be in the cause.
I will order that:
1.Pursuant to section 33V of the Supreme Court Act 1986 (Vic), the discontinuance of the following claims is approved:
(a) all claims against the seventh defendant and the eighth defendant; and
(b)the claims:
(i) alleging misleading or deceptive conduct (in paragraphs 12(b) and 13(d) of the indorsement of claim annexed to the amended writ); and
(ii) alleging that the Essure devices were not reasonably fit for the particular purpose for which they were acquired by consumers (in paragraphs 12(d) and 13(a) of the indorsement of claim annexed to the amended writ).
2.The plaintiff has leave to amend the title of the proceeding and by 28 May 2021 shall file and serve a further amended writ identifying the discontinuance of the claims referred to in the preceding paragraph.
3.The unredacted version of the affidavit of Andrew John Baker affirmed 11 December 2020 is confidential and is not to be disclosed to any person other than a group member.
4.Costs in the cause.
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SCHEDULE OF PARTIES
S ECI 2019 02916
BETWEEN:
| PATRICE SARAH TURNER | Plaintiff |
| -and- | |
| BAYER AUSTRALIA LTD (ACN 000 138 714) | First Defendant |
| BAYER AKTIENGESELLSCHAFT | Second Defendant |
| BAYER HEALTHCARE LLC | Third Defendant |
| BAYER ESSURE INC | Fourth Defendant |
| GYTECH PTY LTD (ACN 076 599 570) | Fifth Defendant |
| AUSTRALASIAN MEDICAL & SCIENTIFIC LTD (ARBN 051 991 372) | Sixth Defendant |
| LAKE REGION MEDICAL INC | Seventh Defendant |
| INTEGER HOLDINGS CORPORATION | Eighth Defendant |
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