FEDERAL COURT OF AUSTRALIA

Merck Sharp & Dohme (Australia) Pty Ltd v Peterson (No 2) [2011] FCAFC 146

THE COURT ORDERS THAT:

1.    The respondent pay the appellant’s costs, including reserved costs, incurred in proceedings VID 451 of 2006 together with costs incurred in the Supreme Court of Victoria, other than costs incurred only in connection with the personal claim of a particular group member other than the respondent, including any particular group member the subject of an order pursuant to s 33R of the Federal Court of Australia Act 1976 (Cth).

2.    Paragraph 11 of the orders made in proceedings VID 451 of 2006 on 18 June 2010 be amended to read: “Subject to any costs order previously made, the applicant pay the second respondent’s costs, including reserved costs.”

3.    The sum of $330,465.35 paid by the appellant into Court on 28 June 2010, together with any statutory interest earned upon those monies, be forthwith remitted to the appellant.

4.    The respondent pay the appellant’s costs, including the costs of the respondent’s cross-appeal.

5.    Execution of judgment in favour of the appellant be stayed pending any application for special leave to appeal to the High Court of Australia, and if that application is successful, of any appeal which arises therefrom.

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

THE COURT ORDERS THAT:

1.    Paragraph 1 of the Court’s orders made on 12 October 2011 be amended to read: “The applicant’s application for leave to appeal be granted.”

2.    The respondent pay the appellant’s costs.

3.    Execution of judgment in favour of the appellant be stayed pending any application for special leave to the High Court of Australia, and if that application is successful, of any appeal which arises therefrom.

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

REASONS FOR JUDGMENT

THE COURT:

1    On 12 October 2011 this Court delivered judgment in respect of the appeal and application for leave to appeal brought by Merck Sharp and Dohme (Australia) Pty Ltd (MSDA) against Mr Peterson in his personal capacity (VID 570 of 2010) and on behalf of group members in the representative proceedings (VID 571 of 2010).

2    Since the judgment was delivered, the parties have conferred as to the orders which should be made to give effect to the judgment of the Court. They have reached some measure of agreement, but they remain at odds, both in relation to the disposition of the costs of the proceedings, and as to the fate of the learned primary judge’s answers to questions relating to the representative proceedings.

COSTS

3    MSDA argues that there is no good reason why it should not be awarded the costs of the trial and appeal in accordance with the usual approach whereby the costs follow the event. MSDA argues that “the event” in this case is in the substantial success of MSDA’s appeal and application for leave to appeal.

4    On Mr Peterson’s behalf it is said that a more nuanced approach to the disposition of costs is necessary, first, to reflect Mr Peterson’s success on a number of issues agitated at trial, success which was sustained on appeal, and secondly, to recognise that the judgment delivered by this Court leaves open the possibility of viable claims by group members other than Mr Peterson.

5    In our view, this is not a case in which justice requires that we approach the disposition of the costs of proceedings with a view to recognising the success of one party or the other party on an issue by issue basis. Broadly speaking, there are two reasons for this view. First, in order to resolve the issues which were decisive against Mr Peterson’s claim it was necessary for the primary judge and this Court to consider almost the totality of the evidence led by the parties, as well as the extensive arguments which canvassed this evidence. As is amply apparent from the reasons for judgment published on 12 October 2011, by far the major issue in the case in terms of evidence and argument was the issue of causation and, on that issue, Mr Peterson failed.

6    Secondly, Mr Peterson failed before the primary judge on the various causes of action he advanced in support of his claim for damages, save for the causes of action based on ss 74B and 74D of the Trade Practices Act 1974 (Cth). And in this Court, we concluded that these claims also failed.

7    So far as the group proceedings are concerned, it is apparent from the reasons for judgment delivered on 12 October 2011 that, on the evidence which has been adduced thus far, no theory of liability in MSDA in favour of any of the group members has been shown to be sustainable. To the extent that it is possible that some group members may yet be able to mount a sustainable case against MSDA, that will depend on further evidence. That such further evidence may be available and compelling is no reason to decline to recognise that in the proceedings thus far neither Mr Peterson nor the group members have succeeded in making good a claim against MSDA.

8    Accordingly, we consider that we should accept MSDA’s submissions in relation to the disposition of costs.

THE QUESTIONS IN THE GROUP PROCEEDINGS

9    We do not consider that any of the primary judge’s answers to the questions relating to the group proceedings need to be altered. The primary judge’s answers and our reasons of 12 October 2011 illustrate the absence of commonality in relation to many of these questions. We consider that the primary judge’s answers to the scheduled questions can stand, notwithstanding our conclusion that the increased relative risk of a myocardial infarction resulting from the consumption of Vioxx is not sufficient to demonstrate unfitness for purpose; see [174] and [181] of our reasons. Further, the answers, in particular the answer to question 5, should be read in the light of our reasons. Finally, for the reasons given at [129]-[138] of our reasons, we consider that his Honour’s answer to question 3 was correct.

ORDERS

10    We make the following orders:

In Proceedings VID 570 of 2010

1.    The respondent pay the appellant’s costs, including reserved costs, incurred in proceedings VID 451 of 2006 together with costs incurred in the Supreme Court of Victoria, other than costs incurred only in connection with the personal claim of a particular group member other than the respondent, including any particular group member the subject of an order pursuant to s 33R of the Federal Court of Australia Act 1976 (Cth).

2.    Paragraph 11 of the orders made in proceedings VID 451 of 2006 on 18 June 2010 be amended to read: “Subject to any costs order previously made, the applicant pay the second respondent’s costs, including reserved costs.”

3.    The sum of $330,465.55 paid by the appellant into Court on 28 June 2010, together with any statutory interest earned upon those monies, be forthwith remitted to the appellant.

4.    The respondent pay the appellant’s costs, including the costs of the respondent’s cross-appeal.

5.    Execution of judgment in favour of the appellant be stayed pending any application for special leave to appeal to the High Court of Australia, and if that application is successful, of any appeal which arises therefrom.

In Proceedings VID 571 of 2010

1.    Paragraph 1 of the Court’s orders made on 12 October 2011 be amended to read: “The applicant’s application for leave to appeal be granted.”

2.    The respondent pay the appellant’s costs.

3.    Execution of judgment in favour of the appellant be stayed pending any application for special leave to the High Court of Australia, and if that application is successful, of any appeal which arises therefrom.

Associate:

Dated:    18 November 2011