FEDERAL COURT OF AUSTRALIA Courtney v Medtel Pty Limited (No 2) [2003] FCA 129 KEVIN GLYNN COURTNEY in a representative capacity on behalf of the persons referred to in par 1 of the Eighth Amended Statement of Claim v MEDTEL PTY LIMITED & ANOR N 661 of 2000 SACKVILLE J SYDNEY 3 MARCH 2003 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 661 OF 2000 BETWEEN: KEVIN GLYNN COURTNEY in a representative capacity on behalf of the persons referred to in paragraph 1 of the Eighth Amended Statement of Claim APPLICANT AND: MEDTEL PTY LIMITED FIRST RESPONDENT PACESETTER INC a Delaware corporation with its principal place of business 15900 Valley View Court, Sylmar, California SECOND RESPONDENT JUDGE: SACKVILLE J DATE: 3 MARCH 2003 PLACE: SYDNEY THE COURT ORDERS THAT: 1. The questions identified in the order made on 16 August 2002 pursuant to Federal Court Rules, O 29 r 2, be answered as follows: (a) Whether the Pacemakers are subject to the Fault as defined in the Eighth Amended Statement of Claim: A. Inappropriate to answer. (b) Whether: (i) The Pacemakers are not reasonably fit for their purpose within the meaning of section 74B of the Trade Practices Act [1974 (Cth)]; (ii) The Pacemakers are not of merchantable quality within the meaning of section 74D of the Trade Practices Act [1974 (Cth)]: A. Those Pacemakers manufactured using yellow spool solder (as that expression is used in [89] of the judgment given on 5 February 2003) were (i) not reasonably fit for their purpose within the meaning of s 74B of the Trade Practices Act 1974 (Cth); and (ii) not of merchantable quality within the meaning of s 74D of the Trade Practices Act 1974 (Cth). (c) Whether, as a result of (i) The Pacemakers not being reasonably fit for their purpose; (ii) The Pacemakers not being of merchantable quality; (iii) The Applicant has suffered and may continue to suffer injury, loss and damage. A. Unnecessary to answer. 2. Judgment be entered in respect of the applicant's individual causes of action under ss 74B and 74D of the Trade Practices Act 1974 (Cth) for the applicant against the first respondent in the sum of $9,988.20, plus interest in the sum of $1,304.19. 3. The respondents provide to the applicant the following information, so far as it is reasonably available, in relation to each group member who has not opted out or settled his or her claim: (a) name; (b) address; (c) treating doctor; (d) whether the group member's Tempo pacemaker has been explanted; and (e) details of any amounts already reimbursed by the respondents, by 4 pm on 6 April 2003. 4. The applicant file and serve submissions and any evidence in relation to costs by 4 pm on 14 March 2003. 5. The respondents file and serve submissions and any evidence in relation to costs by 4 pm on 28 March 2003. 6. The applicant file and serve submissions and any evidence in reply in relation to costs by 4 pm on 5 April 2003. 7. The matter be listed for hearing on the question of costs on 17 April 2003, at 10.15 am. 8. The Motion filed by the first respondent on 11 February 2003 be dismissed, without prejudice to the first respondent's entitlement to file a further application for leave to appeal against the judgments given on 5 February 2003 and today and the orders made today. 9. Liberty to apply on 72 hours notice. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 661 OF 2000 BETWEEN: KEVIN GLYNN COURTNEY in a representative capacity on behalf of the persons referred to in paragraph 1 of the Eighth Amended Statement of Claim APPLICANT AND: MEDTEL PTY LIMITED FIRST RESPONDENT PACESETTER INC a Delaware corporation with its principal place of business 15900 Valley View Court, Sylmar, California SECOND RESPONDENT JUDGE: SACKVILLE J DATE: 3 MARCH 2003 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In the judgment delivered on 5 February 2003, I made orders that the parties file written submissions within fourteen days as to the appropriate orders and directions for the further conduct of these proceedings: Courtney v Medtel Pty Ltd [2003] FCA 36. Submissions were duly filed and I have had the benefit of oral argument. As the argument developed, it became clear that, except for one issue, the parties were largely in agreement as to the orders that were appropriate to give effect to the judgment. 2 As noted in the judgment, the parties agreed that there should be a separate determination of the causes of action against the first respondent ("Medtel") arising under ss 74B and 74D of the Trade Practices Act 1974 (Cth) ("TP Act"). An order was made by consent, pursuant to Federal Court Rules "FCR"), O 29 r 2, as follows: "The claims made in the Eighth Amended Statement of Claim under sections 74B and 74D of the Trade Practices Act 1974 [(Cth)] raised by paragraphs 1-3, 6-16, 18-43, 69, 70(a)(i) and (ii) and 70(e), and paragraphs 67(a) and (b), 68, 70(b), (c) and (g)-(i) insofar as they relate to the injury, loss and damage allegedly suffered by the Applicant and any other group member called during the hearing, be determined separately and in advance of the determination of all other issues in these proceedings by resolution of the following questions: a. Whether the Pacemakers are subject to the Fault as defined in the Eighth Amended Statement of Claim: b. Whether: (i) The Pacemakers are not reasonably fit for their purpose within the meaning of section 74B of the Trade Practices Act; (ii) The Pacemakers are not of merchantable quality within the meaning of section 74D of the Trade Practices Act; c. Whether, as a result of: (i) The Pacemakers not being reasonably fit for their purpose; (ii) The Pacemakers not being of merchantable quality; (iii) The Applicant has suffered and may continue to suffer injury, loss and damage." 3 The parties agreed that, in light of the comments made in the judgment (at [262]), it was not appropriate to answer question (a) and unnecessary to answer question (c). I therefore propose to answer them as follows: (a) Inappropriate to answer. (b) Unnecessary to answer. 4 Mr Bannon SC, who appeared with Mr J Clarke for the applicant, submitted that question (b) should be answered "Yes". He argued that, on the reasoning in the judgment, the phenomenon of premature battery depletion was attributable to the use of yellow spool solder in the manufacture of the "Hazard Alert Pacemakers" (that is, Tempo Pacemakers which were surgically implanted in Australia and were subject to the Hazard Alert issued on 5 June 2000). He contended that, on the balance of probabilities, all the Hazard Alert Pacemakers had been manufactured using the yellow spool solder. Accordingly, each Hazard Alert Pacemaker was not of merchantable quality and not reasonably fit for the particular purpose for which they had been acquired. 5 The difficulty with this approach is that, although I made a finding that the applicant's Pacemaker had been manufactured using yellow spool solder, I was not asked to and did not make a finding that all Hazard Alert Pacemakers were manufactured using yellow spool solder. The evidence suggested that towards the very end of the period covered by the Hazard Alert (a period ending on 31 December 1998) some devices may have been manufactured using blue spool solder. It is possible, therefore, that some Pacemakers covered by the Hazard Alert did not have the same critical characteristic as the applicant's Pacemaker and thus were of merchantable quality and fit for their purpose. It remains open to Medtel to dispute the claim of individual members of the represented group on the ground that the particular Pacemaker implanted into that member's body was not manufactured using yellow spool solder. 6 Mr Bannon's fallback position was that question (b) should be answered to the following effect: "Those Pacemakers manufactured using yellow spool solder (as that expression is used in [89] of the judgment) were (i) not reasonably fit for their purpose within the meaning of s 74B of the TP Act; and (ii) not of merchantable quality within the meaning of s 74D of the TP Act." Mr Loveday, who appeared with Mr S S Clark for the respondents, accepted that an answer in this form was appropriate, given the findings in the judgment. 7 There was no dispute that, in addition, I should enter judgment in respect of the applicant's cause of action under ss 74B and 74D of the TP Act against Medtel in the sum of $9,988.20, plus interest in the sum of $1,304.19, comprising interest on the award for pain and suffering of $723.28 and interest on the award for care services of $580.91. An order in this form reflects the fact that the judgment addresses and disposes of the applicant's causes of action under ss 74B and 74D of the TP Act. As the parties agreed, such a course is contemplated by the order made pursuant to FCR, O 29 r 2. 8 The parties wish to have the opportunity to put on evidence and make submissions on costs. I shall make directions to enable that to be done. I shall also make a direction requiring the respondents to provide certain information relating to each group member who has not opted out of the proceedings or settled his or her claim. 9 Finally, Medtel has filed a motion seeking leave to appeal from "the judgment…dated 5 February 2003". Mr Loveday accepted that the motion was incompetent because at the time it was filed there was no "judgment" in a relevant sense against which leave to appeal could be sought: Federal Court of Australia Act 1976 (Cth), ss 4, 24(1); Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45, at 64, per Barwick CJ and Kitto J. Mr Loveday accepted that the appropriate course was to dismiss the motion, without prejudice to Medtel's entitlement to file a further application for leave to appeal against the judgments given on 5 February 2003 and today and the orders made today. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice SACKVILLE. Associate: Dated: 3 March 2003 Counsel for the Applicant: Mr A J L Bannon SC with Mr J Clarke Solicitor for the Applicant: Maurice Blackburn Cashman Counsel for the Respondent: Mr C B Loveday with Mr S S Clark Solicitor for the Respondent: Clayton Utz Date of Hearing: 27 February 2003 Date of Judgment: 3 March 2003