Federal Court of Australia

Petrovsky v Southern Adelaide Local Health Network Incorporated [2024] FCA 500

ORDERS

THE COURT NOTES THAT:

1.    On the basis of the undertaking given by the Applicants on 20 April 2024 in VID16 of 2024 by their senior counsel (recorded in paragraph 4 below), the Respondents undertake that they will permit:

2.    For the purpose of paragraph 1, Stored Samples includes human trial samples, human blood samples, blood and tissues from animal studies, DNA samples, antibodies and research reagents, viruses and cell lines used in research, vaccine and adjuvant supplies, materials needed for manufacturing vaccines.

3.    The Respondents’ undertaking will cease once final orders are made in VID16 of 2024 in relation to the Applicants’ claims against the Respondents.

4.    By their senior counsel on 20 April 2024 in VID16 of 2024, the Applicants undertook that:

THE COURT ORDERS THAT:

1.    The Applicants’ application for interlocutory relief dated 8 May 2024 is dismissed.

2.    Costs reserved.

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

REASONS FOR JUDGMENT

SNADEN J:

1    By an interlocutory application dated 8 May 2024, the applicants move the court for urgent interlocutory injunctive relief relating, in simple terms, to their ability to access premises controlled by the respondents. Until recently, the applicants have been engaged in various medical research activities. Those activities have been performed pursuant to a relationship that has existed as between them and the respondents, which maintain facilities that are apt to accommodate research of the kind undertaken. That relationship has come (or is coming) to an end; and the parties are now in dispute about the applicants’ immediate access to the facilities in question.

2    The matter has an unfortunate procedural history. It began by means of an originating application filed 14 January 2024. That application included an application for urgent interlocutory relief, by which the applicants sought to maintain their access to the respondents’ facilities. Initially, that urgent application was the subject of agreed orders, pursuant to which the applicants’ access to the premises in question was maintained pending a hearing and determination of the application.

3    That transpired. On 11 April 2024, Dowling J heard the applicants’ application for interlocutory injunctive relief. His Honour reserved his judgment upon the conclusion of that hearing, ultimately determining it a few days later: Petrovsky v Southern Adelaide Local Health Network Inc [2024] FCA 396 (the “Initial Judgment”). His Honour resolved not to grant the interlocutory relief for which the applicants moved; and, in so doing, favoured the view that the applicants had not established a prima facie case for the relief claimed. It will be necessary to return to that conclusion shortly.

4    On Friday, 19 April 2024, the applicants filed an application for leave to appeal from his Honour’s interlocutory judgment. It appears that that application was brought before a duty judge and was the subject of an urgent hearing, at which it appears that some attempt to reagitate for interlocutory (or related) relief was pressed. After a brief hearing on Saturday, 20 April 2024, McEvoy J referred the application for leave to appeal from the judgment of Dowling J to the court’s National Operations Registrar for allocation to a judge, and otherwise dismissed the interlocutory application with costs.

5    The application of 8 May 2024 appears to have been spawned by attempts made by the respondents to prohibit the applicants from accessing, or perhaps otherwise to limit their access to, its premises. Some context is required. At the hearing before Dowling J, there was some exploration with the respondents about measures that the respondents might take to protect from harm or destruction various incidents of the applicants’ work (including research records and vaccine samples). That exploration culminated in the respondents’ providing to the court a written undertaking, which Dowling J recorded in his Honour’s reasons for judgment as follows:

85    The respondents submit that they will not destroy any research samples. On the 15 April 2024, both the respondents gave undertakings in the following terms:

1. The … Respondent … undertakes that it will permit:

(a) the Applicants to store existing research and vaccine samples (Stored Samples) in premises controlled by the Respondent, the precise locations to be determined by the Respondent acting reasonably;

(b) the Applicants’ representatives to attend as necessary to check and maintain storage vessels (e.g. liquid nitrogen dewars, ultracold freezers, freezers, fridges) and move Stored Samples; and

(c) the Second Applicant from 20 April 2024 until 5pm Friday 3 May 2024 to continue to occupy facilities controlled by the Respondent within the Flinders Medical Centre solely to:

i. monitor and prepare its tissue culture stocks for preserving and storing in liquid nitrogen;

ii. take the required steps to vacate the Flinders Medical Centre;

2. For the purpose of clause 1, Stored Samples includes human trial samples, human blood samples, blood and tissues from animal studies, DNA samples, antibodies and research reagents, viruses and cell lines used in research, vaccine and adjuvant supplies, materials needed for manufacturing vaccines.

3. The undertaking is subject to:

(a) access being subject to compliance with all laws, policies, procedures, protocols, terms and conditions of the Respondent in respect to its premises;

(b) the Applicants each undertaking that:

i. they will be responsible for providing and maintaining the storage vessels, including any repairs or replacements required;

ii. the Respondent (and its agents, employees and affiliates) will not be liable for any loss suffered by either of the Applicants in respect of the Stored Samples, other than in the case of wilful misconduct.

(c) the Respondent having liberty to apply to the Court on reasonable notice to have the undertaking revoked or varied.

4. The undertaking will cease once final orders are made in these proceedings in relation to the Applicants’ claims against the Respondent.

6    The effect of those undertakings appears to have been the subject of discussion at the hearing that took place on Saturday, 20 April 2024 before McEvoy J but it is unnecessary to explore that. It suffices to note that, at least from the perspective of the respondents, the undertaking was designed to permit the applicants to effect an orderly withdrawal from the respondents’ premises; and, otherwise, to maintain the integrity of their work.

7    Regrettably, that orderly withdrawal seems not to have transpired. On 7 May 2024, the respondents gave notice to the applicants that, although they would continue to honour the undertakings that they had given in relation to samples, they nonetheless intended to lock the applicants out of their premises with effect from Friday, 10 May 2024. Thus, from that date, the applicants would be unable to continue their research activities from the respondents’ premises.

8    In the afternoon of Thursday, 9 May 2024, the matter found its way into my docket. It quickly became apparent that it was attended by a degree of urgency and, as a result, was listed for mention at 9:30am on Friday, 10 May 2024. That hearing took place by means of video conference. The applicants’ solicitor, Mr Vidanage, appeared on their behalf. The first respondent appeared by its solicitor, Ms Viant. Mr Duggan KC appeared on behalf of the second respondent.

9    At the commencement of that hearing, I inquired of the parties whether they might be in a position to argue the applicants’ application for leave to appeal from the decision of Dowling J. Although the respondents were content to, Mr Vidanage indicated that he was not. He nonetheless indicated that he wished to press the court for the interlocutory relief outlined in the application of 8 May 2024. That was the course that the court indulged.

10    It is convenient at this juncture to set out the nature of the relief for which Mr Vidanage pressed. It is recorded in the interlocutory application as follows:

1.     That Order 2 of His Honour Justice McEvoy’s orders of 20 April 2024 is set aside;

2.     An order that, in reliance on the Applicants’ usual undertaking as to damages provided on 16 January 2024,

(a)     the Second Applicant will have access to the following until a date after the leave for appeal application has been determined;

   i.     the premises and facility known as Lab 6D305 (Lab);

ii.     the Animal House located at Flinders Medical Centre (Animal House) and animals;

iii.     any other premises controlled by the Respondents and located within the Flinders Medical Centre that the Applicants have had access to immediately prior to 20 April 2024; an[d]

(b)     for the avoidance of doubt and without limitation, the access set out in paragraph 2(a) above is subject to:

(i)    access being non-exclusive;

(ii)    access being subject to compliance with all laws, policies, procedures, protocols, terms and conditions as apply to all users of the Lab, Animal House, animal supply, and any other relevant Flinders Medical Centre premises, including the booking system operated by Flinders University and which governs access to and use of the Lab;

(iii)    the Applicants will not bring into the Lab, or seek to install, any plant or equipment, with the exception of any portable equipment small enough to be placed on top of a benchtop, and which will be removed at the conclusion of each booked session, and which will not interfere with the use and enjoyment of the Lab by any other user;

iv.     notwithstanding sub-paragraph (iii) immediately above, the Applicants shall be entitled to leave an article of equipment known as an Elisa Reader at the Lab;

v.    the Lab will not be reconfigured or modified from its current setup, layout and configuration;

(c)     each of the persons listed in paragraph 1(e)(ii) to (ix) (inclusive) of the Applicants’ claim for interlocutory relief, as set out in the Applicants’ Originating Application dated 14 January 2024, shall have access to the Lab under the direct supervision and control of an Approved Individual, on the basis that, the Applicants warrant and represent in favour of the Respondents, that each of those individuals are appropriately qualified, and trained in the use of the Lab and any equipment used in the Lab;

(d)     for the purposes of paragraph 2(c) above an Approved Individual means:

i.     Dr Yoshikazu Honda-Okubo; Dr Greiciely Andre, Dr Lei Li

ii.     any person approved in writing by the Second Respondent to be an Approved Individual

(e)     The Applicants will be allowed to continue their research in the same capacity as they had on and prior to 19 April 2024. This includes, but is not limited to;

i.     Continued experimentation on animals currently in experiments.

ii.     Continued processing of all cancer samples

iii.     Continued ability to run PC2 assays and perform PC2 viral cultures

3.     Enforcement of the oral undertakings taken by the First and Second Respondents on 11 April 2024 and written undertakings provided to His Honour Justice Dowling on 15 April 2024; including;

a.     Continued access to all premises within the Flinders Medical Centre where the Applicants’ samples are currently stored.

4.     Any other interim relief as the Court deems just, including as to costs and for the purpose of preserving the subject matter of the proposed appeal until the leave for appeal application is heard.

11    The reference to “Order 2 of His Honour Justice McEvoy’s orders” is a reference to the order that his Honour made on 20 April 2024 dismissing the applicants’ interlocutory application of 19 April 2024.

12    As might, by now, be appreciated, the relief for which, by their application of 8 May 2024, the applicants moved was materially similar (if not identical) to the relief that Dowling J had considered only a few weeks earlier. Although it isn’t clear, it appears to have been the subject of discussion before McEvoy J on Saturday, 20 April 2024, who, as history records, dismissed the applicants’ application with costs.

13    Undeterred, Mr Vidanage pressed ahead with his application—or further application—for interlocutory injunctive relief before me. At the conclusion of the hearing, I resolved to dismiss it. I gave very brief oral reasons for doing so, upon which I undertook to elaborate in writing. It is by these written reasons that I discharge that undertaking. Although they post-date my determination, it is convenient to frame them in the present tense.

14    The considerations that guide the court in an application for interlocutory injunctive relief are notorious and were not in dispute. In order that they might obtain the relief for which they move, the applicants would need to demonstrate that they have a prima facie case for relief and that the balance of convenience favours the granting of an injunction. As many authorities have made abundantly clear, those inquiries are related, such that a weak prima facie case attended by strong balance of convenience considerations might warrant relief just as readily as a strong case with more equal inconveniences.

15    Perhaps unsurprisingly, those were the very considerations upon which Dowling J was guided in dismissing the applicants’ first attempt to secure the relief that is sought again now. Something should be said about the contentions that were advanced before his Honour. It appears to be beyond controversy that the first applicant, together with the second (which is a corporate entity that he controls), have undertaken medical research activities at premises controlled by the respondents since 2004. To that end, the first applicant was endowed with the status of Professor at Flinders University, and the second applicant and the first respondent entered into a lease agreement (which, although not entirely clear, appears to pertain to premises other than those to which the court’s attention is now fixed).

16    The respondents have sought to bring to an end the relationship that they have with the applicants. Amongst other things, the applicants submit that they may only do so upon proper (which is to say reasonable) notice. They maintain that they are contractually entitled to such notice, either pursuant to a joint venture agreement that they allege is in place as between them and the respondents; or, alternatively, pursuant to a licence that they have been afforded. They contend that their exclusion from the respondents’ premises is to be effected in contravention of that entitlement to reasonable notice. Before Dowling J, other contentions were advanced but it is not necessary now to outline them.

17    The respondents maintain that the first applicant was an employee of the first respondent and was awarded the status of Professor only for a limited time. They deny that they were party to any agreement with the applicants (or either of them) pursuant to which they laboured under any obligation to afford reasonable notice as alleged.

18    In his reasons for judgment, Dowling J comprehensively addressed the submissions just summarised. As might be expected, his Honour did so for the purposes of assessing whether the applicants’ claim for interlocutory injunctive relief was premised upon a prima facie entitlement. For reasons that I needn’t replicate, his Honour:

(1)    was not satisfied that there was “…a serious question to be tried that the documents, representations and conduct relied upon by the applicants [were apt to] establish the Joint Venture Agreement as pleaded” (Initial Judgment, [48]);

(2)    was of the view that “…there was an employment relationship between [the first respondent] and [the first applicant]” and that “[t]he evidence does not suggest that the four parties intended that there would be an ongoing relationship between the respondents and [the second applicant] if [the first applicant’s] employment came to an end” (Initial Judgment, [53]);

(3)    concluded that any licence that the applicants had to use the respondents’ premises was “dependant on [the first applicant] remaining in employment with [the first respondent]” (Initial Judgment, [58]);

(4)    was “…not persuaded that there exists a serious question to be tried that there was a licence in the terms pleaded” (Initial Judgment, [59]).

19    Dowling J went on to find that there was “no serious question to be tried” in respect of the alleged joint venture agreement or licence (or, more specifically, the applicants’ entitlement under either to reasonable notice of their termination). So concluding, his Honour took the view that it was not necessary that he should assess whether the balance of convenience favoured the granting of interlocutory relief. Nonetheless, his Honour did so, concluding that it “favour[ed] the applicant[s] but not significantly” (Initial Judgment, [109]).

20    Before me, Mr Vidanage appeared to accept that, to establish the prima facie case upon which his application rested, it fell to him to explain why Dowling J was wrong to reach the conclusions that he did. For the purposes of what follows, a couple of observations should be recorded. First, it is to be recalled that the matter came before me for hearing with unusual speed. It is to be expected that the submissions that were advanced in that circumstance might not be as polished as they might otherwise have been. Second, Mr Vidanage was left to make submissions of his own, apparently without input from either counsel that had appeared for the respondents before (respectively) Dowling and McEvoy JJ.

21    Respectfully, Mr Vidanage’s oral submissions as to the existence of his clients’ prima facie case for relief were very difficult to follow. They did not obviously distil much beyond an assertion that Dowling J was wrong to find that there was no “…serious question to be tried that there was a licence in the terms pleaded”. Mr Vidanage insisted that the existence of a licence terminable only upon reasonable notice was at least arguable; although I confess that I had great difficulty in following why that was said to be so.

22    Instead, most of Mr Vidanage’s submissions concentrated upon matters relevant to the balance of convenience. For reasons that could not be doubted, he was keen to impress upon the court the importance of his clients’ work and the impact that their exclusion from the respondents’ premises might wreak upon it. To that end, he told the court of some tissue samples taken during surgery performed recently on a child, which required some form of urgent processing that would not be possible unless access to the premises was reinstated. He impressed upon the court that access was only required for a short period to facilitate the applicants’ relocation to facilities in the United States. With obvious passion, he sought to cast the posture of the respondents as callous and unreasonable.

23    He also sought to interrogate the meaning and effect of the undertakings that were explored and given during the hearings that took place before Dowling and McEvoy JJ. Again, I confess much uncertainty as to why. Those undertakings—given both by and to (or for the apparent benefit of) the respondents—have no apparent bearing upon whether or not Dowling J was correct to conclude that the applicants lacked a prima facie basis for the relief that they sought. Yet, somewhat perplexingly, the nature and scope of the undertakings that were given (and to which Dowling J referred in assessing where the balance of convenience lay) occupied the bulk of Mr Vidanage’s submissions.

24    Perhaps that should be understood to reflect the species of relief sought by paragraph 3 of the interlocutory application dated 8 May 2024. By that paragraph, the applicants sought relief in the nature of “enforcement” of “oral undertakings”. That species of relief was not—at least not obviously—the subject of Mr Vidanage’s oral submissions; and, in any event, was very plainly unnecessary in light of the other injunctive relief that was sought (which, on any view, was apt to deliver what was hoped to be achieved by paragraph 3). Nothing more need be said of it.

25    Mr Vidanage’s fixation upon the terms of the respondents’ undertaking, his obvious belief that what his clients are asking for is reasonable and his equally clear view that, by resisting it, the respondents are acting unreasonably has made it very difficult to understand how it is put that Dowling J might have been wrong to conclude as he did about the non-existence of a prima facie case (whether as to the existence of a licence agreement or otherwise).

26    To that end, Mr Vidanage sought to take the court to some written submissions apparently prepared by counsel ahead of the hearing that took place before McEvoy J on Saturday, 20 April 2024. Those submissions were directed to whether or not the court might, at that hearing, grant leave to appeal from the Initial Judgment of Dowling J. As might be expected, those submissions made some attempt to attribute error to his Honour’s conclusions; but, insofar as concerns the alleged existence of a licence terminable only upon reasonable notice, they are conspicuously short on detail. It is said, simply, that “the possibility that research projects could be interrupted and work product thereby lost” ought to have inclined his Honour to the view that the licence pursuant to which the applicants accessed the respondents’ premises was terminable only upon reasonable notice.

27    Respectfully, and for the reasons comprehensively addressed by Dowling J in the Initial Judgment, that submission is not persuasive. I was not taken to any evidence to support the bald contention. Indeed, it did not elevate beyond assertion. In the absence of any meat on those proverbial bones, I can see no reason to cavil with the conclusion to which Dowling J was drawn, namely (emphasis original):

58    My assessment of the words and conduct of all of the parties reasonably understood is that the University was eager to have Dr Petrovsky so as to enhance the standing of the University. So much is consistent with the applicants’ pleaded case on the representations of Professor Phillips. In that context it communicated that it was “open to him to conduct the business of Vaxine from the premises of FMC and the University”: see statement of claim at [12(a)(iii)], emphasis added. Nothing from the words and conduct of the parties suggest that they intended to give Vaxine an ongoing licence to occupy and utilise the FMC and University in the absence of Dr Petrovsky. I am satisfied that any licence was dependant on Dr Petrovsky remaining in employment with the [first respondent]. In those circumstances it is not necessary for me to determine whether it was also terminable at will.

28    There was also some reference made to a separate proceeding currently on foot before the South Australian Employment Tribunal. Its significance to the present application was far from apparent. If I followed it, it was suggested that the first applicant had been wrongly dismissed from his employment with the first respondent (or, one presumes, with one of the respondents), and that that circumstance bore in some way upon the correctness of Dowling’s J conclusion about the non-existence of a prima facie case for relief. Again, intending no disrespect, that submission was not put with a degree of clarity that I was able to follow and my attempt to solicit that clarity was not successful. I am unable to see how the existence of that proceeding has any bearing upon the questions that I am to determine here.

29    I should, if for no reason other than that it was the subject of most of the submissions, say something about the balance of convenience. At the hearing of the application, there was, as I have noted, a significant volume of time dedicated to the nature and scope of the undertakings proffered by the parties over the course of the matter to date. None of them have featured in any of the court’s orders but there can be no doubt whatsoever that they have been proffered. In the case of the respondents, they have assumed the form of what Dowling J recited at [85] of his Honour’s reasons for judgment (above, [5]). Those undertakings continue—indeed, the respondents expanded upon them before me by undertaking to permit the applicants to access their premises for the purposes of vacating them.

30    During the hearing before McEvoy J, the applicants, by their counsel, gave the so-called “cross undertakings” referred to at paragraph 3 of the respondents’ undertakings. As much is clear from the transcript of that hearing, to which I was taken. Mr Vidanage took issue with that reality but I make nothing of that. There has been no application to withdraw from what was said. It remains, in any event, almost wholly inconsequential for present purposes (though, of course, it is no doubt of great significance to the respondents).

31    Perhaps the strangest aspect of the submissions advanced before me concerned the suggestion that the respondents have (or should be understood to have) undertaken to attend to the applicants’ “Stored Samples” in their absence. Mr Vidanage made much of the fact that his clients, being as they are in the midst of relocating, might not be able to be present to attend personally to the monitoring or preservation of the so-called “Stored Samples”. He appeared to suggest that it should be the respondents who should take steps to safeguard the applicants’ work.

32    Perhaps I have misunderstood the submission. Regardless, any suggestion that the respondents have proffered undertakings—or might otherwise be compelled by court order to do things—vis-à-vis the maintenance or advancement of the applicants’ work or samples is absurd. Nothing more need be said of it.

33    Regardless, the balance of convenience is, as Dowling J concluded, of limited significance presently. Even assuming, as Dowling J did (and as I do), that it favours the granting of interlocutory injunctive relief, that alone is worthless in the absence of some articulated prima facie basis for relief. This is not a case where a weak prima facie case might nonetheless attract relief on balance of convenience grounds.

34    Respectfully, the applicants have not established that they have a prima facie case for relief. Despite what I have no doubt was the best of intentions, Mr Vidanage’s submissions on that front were confused and unpersuasive. They very much failed to counter the very clear perception that the applicants simply do not accept the judgment to which Dowling J was drawn and wish to have a second bite at that proverbial cherry. They are, of course, entitled to take steps to challenge his Honour’s ruling; but they have not come close to establishing a basis upon which the court might now deviate from the course that his Honour favoured.

35    For those reasons, no interlocutory injunctive relief is appropriate and none shall be granted. The respondents wish to be heard on the question of costs. I declined to deal with that question with the same chaotic pace as has attended the rest of the interlocutory application. It can be the subject of a more orderly disposition, the particulars of which the parties can discuss and, ideally, agree upon (absent which I shall make appropriate case management orders in due course). Separately, the parties should confer and agree upon a timetable for the hearing of the applicants’ application for leave to appeal. It strikes me that the court should deal with that with some haste, which I am confident will be achievable.

Associate:

Dated:    14 May 2024