Federal Court of Australia

Donnelly v Allergan Australia Pty Limited [2026] FCA 1148

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application is dismissed with costs.

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

REASONS FOR JUDGMENT

OWENS J:

1    The applicant in these representative proceedings has applied to strike out certain paragraphs of the respondents’ defence. Alternatively, she seeks an order for the determination of a separate question.

2    In the proceedings, the applicant alleges that breast implants supplied to her and group members between 1 January 2011 and 4 November 2024 gave rise to a risk of breast implant-associated anaplastic large cell lymphoma (BIA-ALCL). The applicant says that the implants were thereby not of acceptable quality within the meaning of section 54 of the Australian Consumer Law (which is Schedule 2 of the Competition and Consumer Act 2010 (Cth)), and seeks damages from the respondents as “manufacturers” of the implants, pursuant to sections 271 and 272 of the ACL.

3    Both aspects of the applicant’s interlocutory application raise the same fundamental issue. While the respondents deny that their implants cause cancer, in various places in their defence, as part of a fallback position, they plead matters concerned with the state of scientific or technical knowledge about the risk of BIA-ALCL posed by the implants at points in time other than the present. The applicant contends that those matters are irrelevant to the cause of action sued upon, and thus that the passages in question should be struck out (or that the irrelevance of those matters should be determined on a final basis as a separate question in the proceedings).

Introductory Matters

4    The particular portions of the defence that are impugned are as follows (the underlined passages are those that are sought to be struck out):

(a)    In response to the applicant’s pleading that she has commenced the proceeding as a representative proceeding on behalf of all group members, the respondents have pleaded (relevantly):

2.    In answer to paragraph 2 of the Claim, the Respondents:

…

(b)    as to subparagraph (b):

…

(iv)    say further that the Applicant’s claim to bring this proceeding as a representative party for and on behalf of Group Members fails to take into account matters including:

…

B.    the Relevant Period extends for a period of almost 14 years, during which:

…

2)    the state of scientific or technical knowledge as to breast implant-associated anaplastic large cell lymphoma (BIA-ALCL) evolved; and

3)    the information that accompanied the Implants, such as the Directions for Use, changed in accordance with the evolution of the scientific or technical knowledge;

…

(b)    In response to the applicant’s pleading of the alleged propensity of the breast implants to cause cancer, the respondents have pleaded (relevantly):

18.    In answer to paragraph 18 of the Claim, the Respondents:

…

(b)    as to subparagraph (a):

(i)    say that BIA-ALCL is rare and, at all times during the Supply Period, there has been no known causal relationship between breast implants and BIA-ALCL;

…

(c)    as to subparagraph (b):

…

(ii)    …

A.    say that BIA-ALCL is rare and, at all times during the Supply Period, there has been no known causal relationship between breast implants and a “reaction” which causes BIA-ALCL;

…

(c)    In response to the applicant’s pleading of the contravention of section 54 of the ACL, the respondents have pleaded (relevantly):

37.    In answer to paragraph 37 of the Claim, the Respondents:

…

(c)    say further that:

…

(ii)    at all times during the Supply Period, the product information provided to the Applicant and Group Members via their treating health care professional (or otherwise made available to such professionals) contained appropriate and timely information about the state of medical and scientific knowledge regarding possible associations between breast implants and various cancers, including ALCL;

…

(d)    Finally, in response to the whole of the applicant’s claim, the respondents pleaded (relevantly):

43.    Further, or in the alternative, in answer to the whole of the Claim, the Respondents:

…

(c)    say further that the state of scientific or technical knowledge was not such as to establish the matters alleged in paragraph 37 of the Claim (which are denied) or to enable them to discover the matters alleged in paragraph 37 of the Claim if found to exist (which is denied) such that the state of scientific or technical knowledge is one of the relevant circumstances for the purposes of section 54(3)(e) of the ACL to which the court must have regard in determining whether the goods were of acceptable quality.

5    The principles in accordance with which the application should be determined were not in dispute. In short:

(a)    I could not strike out the relevant passages of the pleading if satisfied that they raised a defence with some chance of success; it was only if the defence was not available at law that it should be struck out: see, e.g., Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd [1994] FCA 636; (1994) 217 ALR 226 at 236 (Beaumont J). Where the issue is a complex and novel question of statutory construction, particular caution is required: BHP Group Ltd v Impiombato [2021] FCAFC 93; (2021) 286 FCR 625 at [103] (Middleton, McKerracher and Lee JJ). Strike out procedures should not stultify the development of the law: Australian Competition and Consumer Commission v April International Marketing Services Australia Pty Ltd [2007] FCA 2024 at [68] (Bennett J). A particularly powerful consideration is the fact, (although the applicant did not accept that this consideration applied here), that “common experience teaches that it is usually more efficient and just to consider the viability of a cause of action [or defence] when the facts said to support it are reduced and the suggested action [or defence] can be judged with the full understanding of all the relevant evidence”: Resolution Life Australasia Limited v AMP Limited; Munich Reinsurance Company of Australasia Limited v AMP Limited [2025] NSWCA 21 at [89] (Gleeson JA).

(b)    If I was not satisfied that the relevant aspects of the respondents’ defence were so lacking in substance as to warrant being struck out, but I was satisfied that resolution of the issue did not depend on any factual or evidentiary controversy, then it may (subject to an assessment of the usual considerations regarding the appropriateness and utility of separate questions) be appropriate to order the determination of a separate question. To do so would enable the resolution of the substantive point on a final, rather than an interlocutory, basis: see, e.g., Murray Darling Basin Authority v Doyle’s Farm Produce Pty Ltd [2021] NSWCA 191 at [3]-[4] (Bathurst CJ, Bell P and Leeming JA); Doyle’s Farm Produce Pty Ltd v Murray Darling Basin Authority (No 2) [2021] NSWCA 246; (2021) 106 NSWLR 41 at [4]-[6] (Bell P), [14]-[16] (Leeming JA, with whom Bathurst CJ agreed).

6    In short, the applicant submitted that the relevant aspects of the respondents’ defence could not be supported by any reasonably arguable construction of section 54 of the ACL (and so should be struck out). In the alternative, if I were persuaded that the respondents’ position was at least arguable, and that the issue is purely one of statutory construction, then I should determine the issue on a final basis pursuant to a separate question. The applicant accepted that if I thought the point to be arguable, and to depend upon, or involve the resolution of, factual or evidentiary issues, then her application as a whole must fail.

7    For the reasons that follow, I would not strike out the impugned paragraphs in the respondents’ defence. I would also decline to order the determination of the separate question proposed by the applicant.

Analysis

8    Section 54 of the ACL, insofar as it is relevant, provides:

(1)    If:

(a)    a person supplies, in trade or commerce, goods to a consumer; and

(b)    the supply does not occur by way of sale by auction;

there is a guarantee that the goods are of acceptable quality.

(2)    Goods are of acceptable quality if they are as:

(a)    fit for all the purposes for which goods of that kind are commonly supplied; and

(b)    acceptable in appearance and finish; and

(c)    free from defects; and

(d)    safe; and

(e)    durable;

as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).

(3)    The matters for the purposes of subsection (2) are:

(a)    the nature of the goods; and

(b)    the price of the goods (if relevant); and

(c)    any statements made about the goods on any packaging or label on the goods; and

(d)    any representation made about the goods by the supplier or manufacturer of the goods; and

(e)    any other relevant circumstances relating to the supply of the goods.

9    The applicant says that the description in section 54(2) of the reasonable consumer as someone who is “fully acquainted with the state and condition of the goods (including any hidden defects of the goods)” means that acceptability at the time of supply is to be determined by reference to the full extent of knowledge about the state and condition of the goods that exists at the time of trial. I did not understand the respondents to dispute that. In any event, so much was made clear by the High Court in Williams v Toyota Motor Corporation Australia Limited; Toyota Motor Corporation Australia Limited v Williams [2024] HCA 38:

(a)    The concept of a “hidden defect” within the meaning of section 54(2) was explained in that case as follows (at [32], per Gageler CJ, Gordon, Steward, Gleeson and Beech-Jones JJ):

… Neither “defect” nor “hidden defect” as used in s 54(2) is defined in the ACL. The reference in s 54(2) to “hidden defects” and a reasonable consumer being “fully acquainted” with the state and condition of the goods appears to draw on Dixon J’s description of the condition that goods be of merchantable quality in Australian Knitting Mills Ltd v Grant, namely that the goods be in a “state that a buyer fully acquainted with the facts and, therefore, knowing what hidden defects exist … would buy them without abatement of the price obtainable for such goods if in reasonably sound order and condition and without special terms”. While s 54(2) provides a far more extensive guarantee than the various statutory prescriptions that goods be of merchantable quality, of present relevance is Dixon J’s description of a hidden defect as a defect not reasonably discoverable by a buyer on examination at the time. …

(b)    The nature of the inquiry mandated by section 54(2) was then elaborated upon in the following terms (at [33]):

Section 54(2) posits a hypothetical inquiry as to what a reasonable consumer at the time of supply would regard as acceptable if the reasonable consumer was “fully acquainted with the state and condition of the goods”, including any “hidden defects”. At least in a case involving a hidden defect, an inquiry into whether the guarantee has been complied with requires attributing to a reasonable consumer, at the time of supply, later acquired knowledge of the defect that renders the goods below an acceptable quality. The attributed knowledge of the defect must be knowledge that would render a reasonable consumer “fully acquainted” with the true state and condition of the goods; it follows that this must include full knowledge of or acquaintance with the defect, including later acquired knowledge of the propensity of the defect to occasion adverse consequences and the nature of those consequences, even if understandings of those matters vary over the period of time leading up to the trial.

(c)    It was thus said (at [39]):

… The indisputable starting point is the attribution of a full acquaintance with the state and condition of the goods at the time of supply to a reasonable consumer, including full knowledge of any hidden defect. Such an exercise is completely hypothetical, and the better inquiry is one that is focused on bringing to account at the time of supply the best available information that is known about the defect at the time of trial. …

10    (The decision of the High Court in Capic v Ford Motor Company of Australia Pty Ltd [2024] HCA 39 is to the same effect: see, e.g., at [20] (Gageler CJ, Gordon, Steward, Gleeson and Beech-Jones JJ)).

11    The real contest between the parties concerned what the applicant contended was a corollary of that uncontroversial proposition: that a lack of knowledge, at an earlier point in time, of some attribute of the goods (even if that lack of knowledge reflected the limits of scientific discovery at the relevant time) could never be relevant to the reasonable consumer’s assessment of the acceptability of goods. The decisions in Williams and Capic do not, in terms, address that question. While they make clear that the knowledge possessed by the hypothetical consumer includes knowledge available at the time of trial, they do not state that any particular kind of knowledge referable to the time of supply is, as a result, required to be disregarded. Nor is there any other case that does so.

12    The applicant submitted, however, that:

It would be incoherent for s 54 to, on the one hand, “arm” the reasonable consumer with matters affecting the state and condition of the goods that are known only as at the time of trial, whilst at the same time requiring consideration of whether the state of scientific knowledge was such that those same matters could not have been known at the time of supply.

13    That conclusion was said to be supported by various features of section 54, and the broader statutory context.

14    Insofar as section 54 itself is concerned, the applicant submitted:

(a)    The standard of “acceptable quality” is defined by reference to the expectations of the reasonable consumer, and not by reference to any concept of fault on the part of a manufacturer or supplier of goods. While the state of scientific knowledge in relation to a defect in the goods might be relevant to assessing the latter, it is not relevant to identifying the former.

(b)    Being “fully acquainted” with the state and condition of goods does not involve having an awareness of the state of scientific knowledge in relation to the goods. Attributing such knowledge to the reasonable consumer would be inconsistent with the absence of any obligation on the part of a consumer to undertake inquiries, researches or examinations in relation to goods. (The applicant accepted, of course, that if a consumer in fact takes such steps, it is possible that various exceptions to the operation of the acceptable quality guarantee may operate: see subsections 54(4)-(7)).

(c)    The attributes required to be considered in section 54(2), and the relevant matters in section 54(3), are focused upon the attributes of the goods themselves, and the circumstances relating to their supply, as would be apparent to the reasonable consumer. None of the specified matters are concerned with the state of scientific knowledge (or with any aspect of the manufacturer’s or supplier’s knowledge) at the time of supply.

(d)    The focus of the section operates to confine the superficial breadth of the reference to “any other relevant circumstances relating to the supply of the goods” in subsection 54(3)(e). The reference to “circumstances relating to the supply of the goods” stands in contrast with broader phrases used elsewhere in the ACL, such as “all relevant circumstances, including …” (in section 9(2)), and “in all the circumstances” (in section 21(1)). The circumstances relating to the supply of the goods do not include scientific and technical matters that the average consumer is not expected to know.

(e)    The specific exceptions and defences that exist in relation to section 54 (including those in section 271(2)) do not include any defence equivalent to that provided for by section 142(c) of the ACL (discussed below). Nor do they suggest, in any way, that the state of scientific or technical knowledge might potentially be relevant. The only manner in which any type of “knowledge” was said to be relevant to the defences or exceptions to section 54 was if the individual consumer knew or ought to have known, by what was conveyed to (or done by) them, that the goods were not of acceptable quality. This was submitted to confirm that if the legislature had intended to allow a “state of the art” defence, it would have done so in terms.

15    Connected to that last point, the applicant relied more generally on the features of the separate regime relating to “defective goods” and “safety defects” in Part 3-5 of the ACL. In that regime, in contrast to the acceptable quality regime, there is express reference to the state of scientific knowledge in two contexts:

(a)    First, in section 9(4)(b), it is provided that an inference that goods have a safety defect is not to be made only because the goods complied with a Commonwealth mandatory standard which was “not the safest possible standard having regard to the latest state of scientific or technical knowledge when they were supplied by their manufacturer”; and

(b)    Secondly, in section 142(c), it is a defence to a defective goods action if “the state of scientific or technical knowledge at the time when the goods were supplied by their manufacturer was not such as to enable that safety defect to be discovered”.

16    The applicant submitted that these explicit references to the state of scientific knowledge reinforced that where the legislature intended for there to be a “state of the art” defence, or to permit consideration of the state of scientific and technical knowledge, it did so in terms. The absence of such references in section 54 thus meant that it could be confidently concluded that those matters were not relevant to the acceptable quality regime.

17    Three other matters were said to reinforce the distinct operation of the two regimes, and thus to emphasise the inappropriateness of allowing a “state of the art” defence to intrude into section 54:

(a)    First, the two regimes operate differently (with different limitation periods, and various other differences). They are also addressed to different issues (whether goods are as safe as persons generally are entitled to expect, and whether goods are of acceptable quality having regard to particular matters). In short, they are different regimes with different attributes, and a defence specifically provided for in one should not be allowed to creep into the other.

(b)    Secondly, the regimes were introduced at different points in time. The original predecessor of the acceptable quality regime was introduced in 1978, with the predecessor of the defective goods regime introduced in 1992. There was no suggestion that the defective goods regime was intended to effect any change to the acceptable quality regime (for example, by introducing a “state of the art” defence).

(c)    Thirdly, the regimes have different purposes and functions. The core concern of the defective goods regime was said to be personal injury or property damage caused by defective products. The acceptable quality regime, on the other hand, was said to protect consumers’ interest in the performance of the obligation to supply goods of acceptable quality. That difference was said to underscore why concepts relevant to one regime should not be applied to the other.

18    The position of the respondents may be distilled, I hope not unfairly, to the proposition that the applicant has simply put things rather too starkly. That is to say, the respondents contended that the question of the relevance of the state of scientific knowledge at the time of supply of goods is not susceptible to a universal or unqualified answer. Much will depend on the particular case, the issues that are raised, and the way in which, and the purposes for which, the state of scientific knowledge is sought to be deployed. In the result, the issue was said to be inapt for resolution on an application for strike out, or as part of a separate question of the kind proposed by the applicant.

19    Before turning to consider the merits of the competing positions, I need first to deal with something of a false issue that arose on the application. At times the argument was framed as a debate about the body of scientific material to which regard may be had in assessing whether the implants caused cancer. The respondents appeared to apprehend that the applicant was contending that any reference to science other than the latest studies or theories was impermissible. In response to that perceived argument, the respondents emphasised that simply because a study, or theory, is more recent does not mean that it is thereby possessed of superior scientific merit. Perhaps, it was said, there will be a contest over which of a number of different bodies of knowledge should be accepted. Or perhaps the overall state of scientific knowledge may properly be characterised as uncertain. At the very least, ascertainment of the current state of scientific knowledge may require reference to material spanning, or generated over, a very considerable period of time (and extending much further back than the time of supply). The respondents thus submitted that the Court should not be inveigled into making what is in substance a ruling on the evidence by reference to which scientific questions may be proved in the proceedings, under the guise of ruling on a pleading summons.

20    It suffices to say that I did not understand the applicant to be making the argument that the respondents attributed to her. The respondents deny that their implants gave rise to a risk of cancer, and the applicant acknowledges that the evidentiary contest on that question may involve competing expert evidence that might have regard to the breadth of material referenced by the respondents. The applicant does not contend that the respondents are limited in any way in the evidence upon which the respondents may rely in support of their denial that their implants cause cancer. The applicant’s point was only that any attempt by the respondents to prove a different fact – that the implants were not known by science to cause cancer at the time of supply – was irrelevant.

21    Returning, then, to the real issue: on the assumption that the applicant succeeds in proving that the implants cause cancer, could it ever be relevant to the question whether the reasonable consumer would regard them as being of acceptable quality that, at the time they were supplied, there was no known causal relationship between the implants and cancer? (Of course, in posing the question in that way I am necessarily simplifying the way in which the content of the state of scientific knowledge might be described, but the precise proposition as to the state of the science that may ultimately be sought to be advanced in the respondents’ case does not seem to me to matter for present purposes.)

22    The answer to that question, I think, lies in a careful appreciation of the way that section 54 works. Critically, the section requires a particular evaluation to be made of a thing: i.e., whether goods are of acceptable quality. The goods to be evaluated have an objective state and condition, which the section requires to be ascertained. That is because the hypothetical reasonable consumer from whose perspective the evaluation is to be carried out is to be taken to be “fully acquainted” with the state and condition of the goods. The evaluation of the goods, in the ascertained state and condition, is then performed against the statutory standard of acceptable quality, having regard to specified matters.

23    In relation to that standard, it is important to note that the various criteria specified in section 54(2) are not required to be satisfied in any absolute sense. The standard prescribed by the section is “tempered by what a reasonable consumer would regard as acceptable having regard to the several matters in s 54(3)”: Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 at [27] (Wheelahan J). Those matters “render the standard of acceptable quality elastic, and context specific” and thus the “significance of the components of the guarantee of acceptable quality will therefore vary with the circumstances of each case”: Jayco at [27] (Wheelahan J).

24    To the extent that the applicant’s argument was that the state of scientific knowledge from time to time about the propensity of the implants to cause cancer (as distinct from the question whether the implants, by reference to the evidence available at trial, do in fact cause cancer) is not relevant to the ascertainment of the “state and condition” of the goods, with which the reasonable consumer is taken to be “fully acquainted”, I agree. An observation, theory, or opinion, about goods, or a standard against which they might be measured or judged, cannot be regarded as part of the state or condition of the goods themselves. The state and condition of the goods did not change with any change in the state of scientific knowledge about them. At most, it was the appreciation or awareness of the state or condition of the goods that changed. It follows that if the respondents had sought to justify raising the state of scientific knowledge from time to time concerning the propensity of the implants to cause cancer by reference to the “state and condition” of the goods, or the matters with which the hypothetical reasonable consumer was taken to be “fully acquainted” in that regard, the applicant’s objection would have been valid.

25    But the respondents advanced a different justification. Their point was that the state of scientific knowledge at the time of supply may be a matter that is relevant to the assessment of the acceptability of the quality of the goods. And it is that submission that I think has some force.

26    An evaluation of the acceptability of the quality of goods must have regard to matters and considerations in addition to the state and condition of the goods themselves. That is because to say that the quality of goods is, or is not, acceptable in a particular respect is to judge the goods against an external standard. The existence of a particular defect is thus only the beginning, and not the end, of the inquiry (I should make clear that I use the term “defect” to encompass a shortcoming in any of the various attributes specified in section 54(2)). The question is whether the hypothetical reasonable consumer would consider the quality of the goods to be acceptable even though they contain that defect. That is not a question that can be answered simply by pointing to the defect itself. The reasonable consumer may consider that the presence of a particular defect affects the acceptability of the quality of the goods, or not, for a range of reasons.

27    The applicant, of course, as I have summarised above, submitted that the matters to which regard may be had for the purposes of the evaluation demanded by section 54 are limited to those set out in subsection (3). But even accepting that proposition, I am not persuaded that those matters are not capable of making relevant the state of scientific knowledge at the time of supply. The applicant’s contention that the matters specified in section 54(3) impose a narrow focus that necessarily excludes the state of scientific knowledge at the time of supply reflects an unduly cramped construction of the legislation.

28    Take “the nature of the goods” in section 54(3)(a), for example. No doubt the way in which the nature of goods should be characterised may itself be a topic of controversy. But a characterisation of the implants as medical devices, designed to be implanted in the human body, is at least an available possibility. There may then be a range of arguments about the way in which the hypothetical reasonable consumer would take that fact into account in evaluating the acceptability of the goods. It may be argued, for example, that the hypothetical reasonable consumer may be taken to know that medical devices implanted in the human body may sometimes produce adverse reactions that were not reasonably foreseeable. The hypothetical reasonable consumer may also be argued to know that in some cases the only way that adverse reactions are discovered is by way of experience arising from the use of the product, or by some other later advance in scientific knowledge. If those arguments were accepted, could it be said (for example) that the fact that the state of scientific knowledge at the time of supply revealed no known mechanism by which the implants may cause cancer was inevitably irrelevant to the assessment of the acceptability of the goods?

29    I do not think that it can. By specifying “the nature of the goods” as a matter to which regard is required to be had, the section is directing attention to a potentially wide range of matters, considerations, and circumstances that may be capable of justifying, explaining, or contextualising the presence of a defect in goods of the relevant kind. The statute is requiring to be brought into account all those things that the hypothetical reasonable consumer would be taken to know and think about goods of the relevant kind, as relevant to informing the standard to which the reasonable consumer would hold goods of that kind. The state of scientific knowledge at the time of supply seems to me to be one matter that it might be argued the hypothetical reasonable consumer would regard as relevant to the question whether, notwithstanding the presence of the defect in question, the implant was “acceptable”.

30    A simple, albeit extreme, analogy can perhaps make the point. Let it be assumed that the goods in question comprise an experimental medical treatment for an otherwise incurable disease. The scientific consensus at the time of supply is that the treatment is extremely promising, with no plausible mechanism by which an adverse reaction might be caused having been identified. In fact, upon administration, the treatment proves immediately and invariably fatal. Plainly, the “state and condition” of the goods, with which the hypothetical reasonable consumer is taken to be “fully acquainted”, includes the fact that the treatment is lethal. In most cases, the hypothetical reasonable consumer would presumably regard goods that caused instant death as not being of acceptable quality. But when “the nature of the goods” is “experimental medical treatment”, it seems to me that it is at least possible that a different answer might be given. In the case of such goods, the hypothetical reasonable consumer’s assessment of acceptability, having regard to the nature of the goods in question, may depend on a range of matters including, perhaps, whether the goods were supplied in circumstances where their lethality was neither known to, nor capable of being predicted by, science, as part of an experimental treatment for which there were high hopes.

31    A similar conclusion could be reached through the stipulation in subsection (3)(e) that regard be had to “any other relevant circumstances relating to the supply of the goods”. That is to say, if the various considerations I have just described were not thought to arise upon regard being had to “the nature of the goods”, then it seems to me, contrary to the applicant’s submission, that there would be a reasonable argument that they would do so as part of the circumstances relating to the supply of the goods. When goods are supplied for the purpose of implantation in the human body as part of medical treatment, the extent to which the use of the goods is supported by current scientific knowledge is at least arguably a circumstance relating to their supply. Those same matters thus seem to me to be ones to which it may reasonably be argued that the hypothetical reasonable consumer would have regard in determining whether goods containing a particular defect were nonetheless of acceptable quality.

32    That conclusion does not involve ignoring the words “relating to the supply of the goods”. It simply recognises that the “circumstances relating to the supply of the goods” can reasonably be argued to extend beyond the immediate interactions constituting the supply transaction, to include the nature, purpose, and context of the supply. The potential breadth of the matters encompassed by subsection (3)(e) is reinforced by the words “relating to”: see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [87] (McHugh, Gummow, Kirby and Hayne JJ). Whether the state of scientific knowledge at the time is sufficiently closely related to the circumstances of the supply of the goods so as to “relat[e] to” them is likely to depend on the particular facts and circumstances of individual cases. For the reasons I have given, I am satisfied that here it is at least arguable that there is a sufficient connection.

33    I do not agree with the applicant that there is any necessary “incoherence” in asking whether the hypothetical reasonable consumer, for the purposes of section 54, would regard particular goods as acceptable in circumstances where he or she knows that the goods in fact cause cancer, but also knows that that fact was not known to science at the time of supply. To do so does not contradict, or undermine, in any way the attribution to the hypothetical reasonable consumer of a full acquaintance with the state and condition of the goods. Rather, it is to ask whether notwithstanding the consumer’s knowledge that the goods contain the defect in question, they regard them as acceptable for a particular reason (or for reasons including such a reason).

34    Nor do I accept that recognition of the potential relevance of the state of scientific knowledge at the time of supply is inconsistent with the absence of any fault element in the acceptable quality regime. The question is not whether a supplier or manufacturer of goods did all that they reasonably could; it is whether the goods themselves are of acceptable quality. The fact that the state of scientific knowledge at the time of supply did not recognise the potential for goods to cause cancer, for the reasons I have given, is at least arguably relevant to that question in some circumstances.

35    Furthermore, nothing that I have said assumes that the hypothetical reasonable consumer would be a person with an actual awareness of the state of scientific knowledge at the time of supply. Relatedly, nor is the effect of what I have said to impose an obligation on any consumer (actual or hypothetical) to investigate and ascertain the state of scientific knowledge at the time of supply. The question posed by the statute is whether a hypothetical reasonable consumer would regard goods as being of acceptable quality, having regard to specified matters. The statute establishes a standard by reference to which an evaluation is to be made by the Court. There is no suggestion that the evaluation is required to be carried out by reference to what a reasonable consumer would in fact know (or ought to know) at the time of supply (and indeed Williams is inconsistent with any suggestion to that effect). Rather, upon the relevant facts being identified, the question is what the hypothetical reasonable consumer would make of them in relation to the acceptability of the quality of the goods.

36    Finally, it may be observed that the effect of accepting the respondents’ argument is not to import the “state of the art” defence, found in section 142(c), into the acceptable quality regime. That provision, it will be recalled, provides a complete defence to a defective goods action where it is established that “the state of scientific or technical knowledge at the time when the goods were supplied by their manufacturer was not such as to enable that safety defect to be discovered”. In the context of the acceptable quality regime, on the other hand, the state of scientific knowledge at the time of supply is merely one factor to which regard may be had for the purpose of assessing acceptability. The extent to which it is in fact relevant and, if it is, the effect it may have on the answer to the statutory question, will inevitably be highly fact specific.

37    I do not consider that either side derived anything in the way of assistance from the presence of the defective goods regime in Part 3-5 of the ACL. I accept, as the applicant submitted, that they are separate regimes, directed to different ends, that operate in accordance with their own distinct terms. But once it is recognised that the respondents do not seek to imply into the acceptable quality regime the defence for which express provision is made in Part 3-5, and the question is only the proper construction of the provisions of the acceptable quality regime itself, the provisions of Part 3-5 seem to me to be of little consequence. I certainly do not think that it is possible to infer from Part 3-5 that Parliament intended that reference to the state of scientific knowledge could only be made in circumstances where express provision to that effect was made in the legislation.

38    Of course, it is no part of the Court’s function on these applications to determine whether the state of scientific knowledge at the time of supply of the implants is a matter that is relevant to assessing compliance with the acceptable quality guarantee and, if it is, how it might be relevant. The question is only whether the respondents are entitled to run a case that says it is. I am satisfied, for the reasons I have given, that it is at least arguable that the state of scientific knowledge at the time of supply could be a relevant matter.

Disposition – Strike Out

39    Overall, therefore, I would not strike out the impugned passages in the defence:

(a)    The pleading in paragraph [2(b)(iv)(B)(2) and (3)] does not introduce any new factual issue into the proceedings, and appears to do little more than raise an argument, premised upon the substance of the defence that is subsequently pleaded, that there are sufficient differences between the claims of the applicant and the group members to make the representative proceeding procedure ill-suited to deal with the individual claims of group members (without going so far as to contend that the proceedings are not properly constituted). There may be a number of possible objections to the inclusion of such matter in a defence, but the applicant has sensibly not risen to take the offered bait. Insofar as the references to the changing state of scientific knowledge are concerned, because I have determined to allow the substantive references upon which they are based, I would also allow these passages to remain.

(b)    The pleading in paragraphs [18(b)(i)] and [18(c)(ii)(A)] responds to the applicant’s pleading of the propensity of the implants to cause cancer. That part of the statement of claim is not in terms limited to the pleading of the state and condition of the implants for the purposes of section 54; it seems to serve a more general purpose. For that reason, I am satisfied that it is not inappropriate for the respondents, in response, to plead the absence of any known causal relationship between breast implants and BIA-ALCL (or between breast implants and a reaction in the body that causes BIA-ALCL). It is, in other words, the pleading of a material fact the legal relevance of which is established later in the pleading.

(c)    The pleading in paragraph [37(c)(ii)] alleges that product information accompanying the implants contained “appropriate and timely” information about the state of scientific knowledge regarding possible associations between the implants and (inter alia) BIA-ALCL. The applicant submitted that she would not contend that, at the time of supply, incorrect, inaccurate, or incomplete statements or representations were made by the respondents. She thus submitted that there was no occasion or need for any scientific knowledge to be tendered in order to test the accuracy or adequacy of the product information. I must confess I do not see why that would mean that the relevant passage in the defence should be struck out, and I decline to do so.

(d)    Finally, paragraph [43(c)] pleads the state of scientific or technical knowledge as a relevant circumstance within the meaning of subsection (3)(e) on two bases:

(i)    First, that the state of scientific or technical knowledge was not such as to establish the matters said to constitute a contravention of section 54, as pleaded in paragraph [37] of the statement of claim. For the reasons I have given I am satisfied that that plea raises an arguable defence.

(ii)    Secondly, that the state of scientific or technical knowledge was not such as to “enable them [scil. the respondents] to discover” the matters pleaded as constituting the contravention of section 54 in paragraph [37]. The respondents confirmed in their submissions on this application that they “do not contend … that it is the knowledge and expectations of the manufacturer or the supplier that are relevant” and that they rely only on “the state of scientific knowledge generally”. I understood that to mean that the relevant part of the pleading should be read as alleging that the state of scientific knowledge was not such as to “enable the discovery of” the matters pleaded as constituting the contravention of section 54 in paragraph [37]. I am content for the parties to agree to conduct the case on the basis of that interpretation; or otherwise I will grant leave to the respondents to file an amended defence to make the position clear.

Disposition – Separate Question

40    My conclusion that the respondents’ reliance on the state of scientific knowledge at the time of supply is arguable is not, of course, in itself sufficient to dispose of the application for a separate question. It will be recalled that the applicant submitted that if I was persuaded that the argument, while arguable, could be determined without the need for evidence, then I should proceed to do so.

41    I do not accept, however, that the argument is capable of being determined in a factual vacuum. As my reasoning in relation to the strike out application makes clear, the relevance of the state of scientific knowledge at the time of supply to the acceptability of goods is likely to be highly fact dependent. At present, the point has been raised in the respondents’ defence in a very general way. There is not yet any sufficiently precise articulation of the content of the state of scientific knowledge relied upon, or the way in which it is said to be relevant to the evaluation of the acceptability of the goods. It would not be possible to determine whether this aspect of the respondents’ defence should fail without a proper understanding of the precise factual matters relied upon, in the context of the evidence as a whole.

42    I am thus not persuaded that the respondents’ reliance on the state of scientific knowledge from time to time can be determined in the absence of evidence. In those circumstances, the applicant accepted that the application for a separate question must fail.

Conclusion

43    It follows that the applicant’s interlocutory application should be dismissed with costs.

Associate:

Dated:    17 August 2026