FEDERAL COURT OF AUSTRALIA

Novartis Pharmaceuticals Australia Pty Ltd v Bayer Australia Limited [2013] FCA 929

THE COURT ORDERS THAT:

1.    The applicant have leave to amend its Further Amended Statement of Claim substantially in accordance with the amendments in the form annexed and marked RDM - 10 to the affidavit of Ross David McInnes, affirmed 22 August 2013.

2.    The applicant pay to the respondent any costs thrown away by reason of the amendment.

3.    The costs of the interlocutory application filed on 22 August 2013 be otherwise reserved.

4.    The dates for hearing fixed to begin on 16 December 2013 for 5 days be vacated.

THE COURT DIRECTS THAT:

5.    The parties forward to my associate an agreed timetable for the interlocutory steps necessary to prepare the matter for trial.

6.    The proceedings be listed for final hearing as early in 2014 as practicable.

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

REASONS FOR JUDGMENT

The interlocutory application

1    By interlocutory application filed on 22 August 2013, the applicant seeks leave to amend its further amended statement of claim in accordance with the amendments detailed in annexure RDM – 10 of the affidavit of Ross David McInnes affirmed on 22 August 2013.

2    That affidavit was read by the applicant on the hearing of the interlocutory application yesterday. No evidence was relied on by the respondent.

3    The amendments proposed are in substance as follows:

28G.    During the course of 2012 and/or 2013 Bayer company representatives engaged in communications with ophthalmologists and/or optometrists (known as “detailing”) during which the ophthalmologists and/or optometrists were shown in detail aids which included word [sic] in terms substantially similar to those in paragraph 28A above (“Detailing Conduct”).

4    The words in paragraph 28A referred to were as follows:

EYLEA® FOR YOU AND YOUR PATIENTS

WITH FEWER INJECTIONS WHEN USED

ACCORDING TO THE APPROVED DOSAGE

COMPARED TO MONTHLY LUCENTIS®1, 2

            …

References: 1. EYLEA Product Information. 2. LUCENTIS Product Information.

5    It was also sought to amend to add paragraph 32B in relation to the four representations already pleaded that those representations “were also conveyed by officers and/or employees of the [sic] Bayer in the course of the Detailing Conduct.”

6    The representations were set out in paragraph 29 of the pleading and were:

29.1    that in clinical use, in accordance with the approved dosage, Lucentis is administered monthly for all patients (“First Representation”);

29.2    that, for each and every patient, Lucentis will only be a clinically effective treatment if administered monthly (“Second Representation”);

29.3    that the Lucentis Product Information specified, without qualification, that it was to be administered monthly (“Third Representation”);

29.4    that in accordance with approved dosages, all Eylea patients receive fewer injections than all Lucentis patients (“Fourth Representation”).

The submissions of the parties

7    The submissions on behalf of the applicant were that it had sought the respondent's consent to the proposed amendments by way of letter dated 14 August 2013 and on 20 August 2013 the respondent refused consent. The only basis on which such consent was refused was that any such amendment would result in the trial, not due to commence until 16 December 2013, having to be vacated. The applicant pointed out that the respondent had elected not to file any evidence to seek to make good that assertion. Thus it was submitted there was no evidentiary basis for a submission that the respondent would be prejudiced by the amendment or unable to prepare for the final hearing.

8    The applicant submitted that there had been no delay in seeking to amend as the proposed amendments related to documents recently discovered by the applicant following various interlocutory contests about discovery beginning with orders made on 6 June 2013.

9    The applicant also argued in effect that the proposed amendments were to add representations in the same or similar form to the representations made in acts of publication already pleaded.

10    The applicant submitted that the most significant potential evidential impact would be in respect of the respondent’s expert evidence, which was not due until 18 October 2013. Further, the respondent’s experts only signed confidentiality undertakings on 2 September 2013 suggesting that its experts had not undertaken significant work until that date.

11    The respondent submitted, first, that the proposed amendment raised substantial new issues of fact and expert opinion which was not appropriate given that the litigation was at an advanced stage.

12    The respondent submitted, second, that the granting of the amendment and the consequential investigation of evidence would require the current hearing dates to be vacated. It was submitted that it was not realistic to expect that, in the context of this litigation, the current hearing dates could be maintained if the amendment were allowed.

13    The respondent submitted, third, that the application for the proposed amendment was not made “promptly”. The relevant document was provided to the applicant on 23 July 2013 but the applicant did not write to the respondent's solicitors proposing the amendment until 14 August 2013.

14    The respondent submitted, fourthly, that the proposed paragraph 32B contained no particulars of the facts, matters and circumstances relied on by the applicant in making the allegations. It was apparent, the respondent submitted, that the applicant was unable to identify a single ophthalmologist or optometrist shown a detailed aid, let alone relying on one in making a prescription decision. The claim was, accordingly, highly speculative.

Consideration

15    In my opinion there has been no disqualifying delay on the part of the applicant in putting forward its application to amend. Once the applicant had received on discovery the documents which now found its application to amend it acted promptly.

16    I do not accept the related submission put on behalf the respondent that the applicant must be taken to have chosen, when it commenced proceedings in February 2013, deliberately to bring a narrow case.

17    I am also not persuaded that the proposed claim is highly speculative. In my view the material annexed to the affidavit of Mr McInnes, being scoping studies by the respondent’s market research company, provides a proper basis for the claim.

18    However I am persuaded that there is likely to be prejudice to the respondent if the amendments were allowed and the present hearing dates maintained. I accept that the respondent would, self-evidently, need time to explore, and should have a reasonable opportunity to explore, the factual circumstances in which the applicant seeks to allege the representations were made.

19    I accept, as submitted on behalf of the applicant, that the representations sought to be pleaded are no different from those presently pleaded but I also accept, as put on behalf the respondent, that there is or may be a qualitative difference between the case as thus far pleaded, involving “public” representations and the case now sought to be put involving one-on-one representations to individual ophthalmologists or optometrists.

20    I also accept that it is likely that the newly pleaded circumstances would involve, at least, further lay evidence on the part of the respondent and some, although perhaps relatively minor, further expert evidence.

21    I note that the respondent earlier gave an interlocutory undertaking to preserve the status quo pending the determination of the proceedings.

22    In the circumstances, in my opinion the best accommodation of the interests of the parties and the matters to be taken into account under s 37M of the Federal Court of Australia Act 1976 (Cth), and therefore the appropriate course, is to grant to the applicant leave to amend, to vacate the December hearing dates and to relist the matter for final hearing as early in 2014 as practicable. This is only a short delay and will, in my opinion, allow sufficient time for the respondent to deal with the new claims.

Associate:

Dated:    13 September 2013