FEDERAL COURT OF AUSTRALIA

McNickle v Huntsman Chemical Company Australia Pty Ltd (Common Questions) [2023] FCA 662

ORDERS

THE COURT ORDERS THAT:

1.    The respondents’ interlocutory application dated 25 May 2023 be dismissed.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

A    INTRODUCTION AND BACKGROUND

1    This is an interlocutory dispute which has at its core an important aspect of practice and procedure under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (FCA Act).

2    The application before the Court today arises in the context of a highly complex class action. There has been a great narrowing of issues in the course of case management, and a vast amount of lay and expert evidence has been (and continues to be) prepared. At long last, the initial trial in the proceeding is set to commence on 4 September 2023.

3    The representative applicant, Mr Kelvin McNickle, seeks damages or statutory compensation from the manufacturers of Roundup Herbicide and Roundup Biactive (Roundup Products) for breaches of statutory and common law norms. Mr McNickle contends that throughout the period July 1976 until July 2022, glyphosate, glyphosate-based formulations and Roundup Products (which have glyphosate as a component) were carcinogenic to humans. His primary case is that glyphosate and formulations containing it were “unsafe at any speed”.

4    The primary position advanced by the respondents is to reject this contention completely. It is said that glyphosate, glyphosate-based formulations and Roundup Products are not carcinogenic at all, and do not cause or increase an individual’s risk of developing non-Hodgkin lymphoma (NHL).

5    The parties’ primary positions are captured in the common questions identified in orders made by consent following a case management hearing on 26 April 2023. Those questions are as follows:

1.    Throughout the period July 1976 until 4 July 2022 (the Relevant Period), were:

a.    Glyphosate; and/or

b.    Glyphosate based formulations (GBFs)–

carcinogenic to humans?

2.    Throughout the Relevant Period, were:

a.    Roundup Herbicide; and/or

b.    Roundup Biactive–

carcinogenic to humans?

3.    Throughout the Relevant Period, if Roundup Herbicide and/or Roundup Biactive contacted the skin, did any surfactants present increase absorption in the bloodstream by reason of the factors identified in [the fourth further amended statement of claim at [29]]?

4.    Throughout the Relevant Period, did or could use of and/or exposure to:

a.    Roundup Herbicide;

b.    Roundup Biactive;

c.    Glyphosate; and/or

d.    GBFs–

i.    increase an individual’s risk of developing NHL; and/or

ii.    cause an individual to develop NHL?

5.    If use of or exposure to Roundup Herbicide or Roundup Biactive can cause NHL in humans, would use in accordance with the Labels, Safety Data Sheets and Safety Directions detailed in paragraphs 52 to 60 of the Statement of Agreed Background Facts … amount to a use or exposure that is capable of causing NHL by reason of that use?

6    Orders setting down questions of this kind are commonly referred to as “Merck orders”. This appellation is taken from Merck Sharp & Dohme (Australia) Pty Ltd v Peterson [2009] FCAFC 26; (2009) 355 ALR 20, where Moore, Sundberg and Tracey JJ explained (at 23 [8]) that if issues are framed as questions, “orders can be made answering them” and allowing a party disaffected by the determination to challenge those answers by way of appeal, as contemplated by s 33ZC(1) of the FCA Act.

7    Notwithstanding the agreement that emerged at the case management hearing, and that the Merck orders were made by consent (as is often the case), there has been some disputation as to the issues to be determined at the initial trial.

8    Now, the respondents seek to extend the common questions to capture whether glyphosate, glyphosate-based products and Roundup Products were carcinogenic, or increased an individual’s risk of developing NHL or caused them to develop NHL, “at any dose” or “above any minimum dose”. As will be seen, this amendment is proposed to accommodate the respondents’ secondary case. For the reasons which follow, I do not regard it as necessary to amend the common questions.

B    EVENTS GIVING RISE TO THE INTERLOCUTORY APPLICATION

9    It is well to set out in more detail the context in which this interlocutory stoush has come about.

10    In line with my usual practice in complex class actions, following the case management hearing on 26 April 2023, I left it to the parties to attend to the administrative task of reducing the orders made to a form of order to be provided to my Associate. This was not an invitation to engage in contentious correspondence or make further submissions.

11    When my Associate did not receive a copy of a minute of order in a timely fashion, an enquiry was made of the parties. The response was a lengthy email from a solicitor from the respondents on 3 May 2023, which indicated the parties needed to “work through an issue.”

12    That “issue” was the extent to which the respondents’ secondary case could be made out on the common questions. The respondents’ case in the alternative is that the doses humans encounter in the course of real-world use of glyphosate and glyphosate-based formulations are well below regulatory safety thresholds and do not increase the risk of cancer, including NHL. Accordingly, the respondents contend it is necessary for the Court to consider matters as to dose in order to be able to answer each of the common questions. The respondents’ email continued:

Whilst the Respondents do not at this stage consider that there needs to be a further hearing to work through this issue, for the avoidance of any doubt they do wish to make clear their understanding of the position reached, being that whilst the Applicant does not consider it necessary to answer questions of dose in the answering of common questions 1 to 5, it is open to the Respondents to submit and for the Court to find that dose (as articulated by the Respondents in the Rejoinder submission) arises for consideration at the initial trial, because it arises by several of the proposed common questions, in particular questions 4 and 5.

If the Court requests anything further from the parties on this issue, they are prepared to further confer and address those requests or attend a further hearing if that be the Court’s preference.

13    My Associate responded the next day in the following terms:

The Court indicated the orders it intended to make at the case management hearing on 26 April 2023. There was no opposition to those orders and the parties were provided the administrative task of providing a minute of the orders to the Court to reflect the result of the case management hearing.

His Honour has made the orders, which are clear in their terms and are attached.

His Honour does not propose to comment upon the email sent but, for clarity, will note two matters.

First, if a party at the initial trial seeks to lead served evidence relevant (within the meaning of ss 55 and 56 of the Evidence Act 1995 (Cth)) to answering the Initial Trial Common Questions (as defined in order 2), and the material is not the subject of discretionary exclusion, it will be received. If a party seeks to lead evidence not relevant to answering the Initial Trial Common Questions, or the material is subject to discretionary exclusion, it will not be received. The same can be said of submissions - if relevant to the Initial Trial Common Questions they will be received; but if they are irrelevant they will be rejected.

Secondly, the result of the initial trial will be to give answers, reflected in s 33ZB orders, to the Initial Trial Common Questions and not any other question or questions. This will be the extent of the resolution at the initial trial save for the operation of principles of preclusion and, more specifically, an issue estoppel preventing one party or a group member later raising of a disputed question of fact or law which was necessarily resolved as a step in reaching the determination of the Initial Trial Common Questions: as to principles of preclusion generally, see the decision of the ACT Court of Appeal in Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd [2022] ACTCA 42; (2022) 18 ACTLR 245; (2022) 371 FLR 96 (at [61]–[68] per Lee J, with whom Elkaim J agreed).

The Court does not require the parties to confer and address these matters further.

14    Notwithstanding this response, the respondents contend that two matters remain unclear.

15    First, it is said there is “ambiguity” as to whether Mr McNickle intends to submit that issues as to dose are irrelevant to the Court’s determination of the common questions. Secondly, and relatedly, it is said it is unclear whether Mr McNickle will seek the discretionary exclusion of any material relating to dose at the initial trial pursuant to s 135 of the Evidence Act 1995 (Cth) (EA). The respondents seek to “put beyond doubt” any risk they might be precluded from asking the Court to make findings as to dose.

C    DISPOSITION

16    At the commencement of the hearing, I indicated that I thought the respondents’ application was much ado about nothing.

17    As I explained in Dillon v RBS Group (Australia) Pty Ltd [2017] FCA 896; (2017) 252 FCR 150 (at 165–167 [70]–[75]), the boundaries of what can be determined at an initial trial of a class action align with the boundaries of the principled exercise of judicial power, being questions or facts in issue which are neither abstract nor hypothetical. Case management imperatives, procedural fairness and the mandate of the overarching purpose inform what should be determined. The whole purpose of a Merck order is to ensure that there be no misapprehension as to what is to be determined and what is not to be determined: Dillon v RBS (at 165 [70]–[71]).

18    I regret to say that despite the Full Court’s observations in Merck and cases flowing from it, the making of Merck orders is oftentimes forgotten, giving rise to avoidable controversies. As I said in Gill v Ethicon Sàrl (No 3) [2019] FCA 587; (2019) 369 ALR 175 (at 177–178 [10]–[11]):

10.    In the early stages of Pt IVA litigation, the discipline of identifying the issues to be determined at an initial trial had not developed. Significant controversy often arose following the delivery of a judgment whereby the parties parsed the judgment of the trial judge like it was a haiku trying to divine which of the findings amounted to the determination of a common issue of law or fact. The accumulated experience of this Court in having to deal with the needless controversy that such a course involved, was the impetus for ensuring that prior to an initial trial there was no confusion between the parties as to what precise issues the trial judge was required to address.

11.    Nowadays a “Merck order” is made, almost always wholly or largely by consent, which identifies that at an initial trial the whole of the claim of the applicant or some other group representatives are determined, together with a list of questions identified in a schedule to the order. These questions reflect common issues or issues of commonality the answers to which, following judgment, can be the subject of s 33ZB orders (thus identifying the metes and bounds of the statutory estoppel).

19    In a complex class action where such orders have been made, following delivery of judgment, two things can happen. The first is that orders will be made pursuant to s 33ZB providing answers to the common questions which take effect as declarations. Such orders bind the parties through ordinary principles of res judicata and issue estoppel, and also bind strangers to the litigation, being those group members described or identified in the s 33ZB order (see s 33ZB(a)). The second is that there may be utility in making additional binding orders under s 33ZB as to common facts found in the course of answering the present questions posed by the Merck orders. Both are apt to demonstrate the utility of Merck orders in focussing the inquiries before the Court and the orders made after judgment.

20    The common questions in this case are appropriately formulated. As I see it, there are two routes the Court may take. The first is to accept Mr McNickle’s contention as to common questions one and two. This would amount to a finding that glyphosate, glyphosate-based formulations and Roundup Products were, in effect, “unsafe at any speed”. Any consideration as to dose at this stage would not be relevant.

21    The second is to reject the respondents’ primary contention (that is, that glyphosate, glyphosate-based formulations and Roundup Products are not carcinogenic at all) but accept they are carcinogenic at a particular level of exposure. If I am to reach such a conclusion, it is essential to the judicial function that I explain why I came to that conclusion. Hence, it would be necessary to make all necessary findings of fact. It may be utile that additional s 33ZB orders are made to ensure there is no dispute as to these findings. It all depends.

22    More broadly, as explained in the correspondence sent by my Associate, it goes without saying that if a party seeks to lead served evidence which is relevant to the initial trial within the meaning of ss 55 and 56 of the EA, and there is no discretionary reason to exclude it, it will be received.

23    In effect, the respondents’ interlocutory application is bound up in speculation as to the ultimate conclusion the Court will reach after hearing the evidence. There is no need to complicate the common questions in order to provide the respondents with a layer of insurance against the uncertainties inherent in the adversarial process.

24    Accordingly, I am not convinced it is necessary to amend the common questions ordered on 26 April 2023. I will say that today’s hearing was, however, a useful exercise in clarifying the primary and secondary positions of the parties. I am confident there is no confusion as to the cases advanced. All things going to plan, the next time the parties will come before the Court is on the first day of the initial trial.

Associate:

Dated:    20 June 2023

SCHEDULE OF PARTIES