FEDERAL COURT OF AUSTRALIA Commonwealth of Australia v Sanofi-Aventis [2015] FCA 384 Citation: Commonwealth of Australia v Sanofi-Aventis [2015] FCA 384 Parties: COMMONWEALTH OF AUSTRALIA v SANOFI (FORMERLY SANOFI-AVENTIS), SANOFI-AVENTIS US LLC and BRISTOL-MYERS SQUIBB INVESTCO LLC File number: NSD 1639 of 2007 Judge: NICHOLAS J Date of judgment: 24 April 2015 Catchwords: PRACTICE AND PROCEDURE – whether respondents to claim on undertaking as to damages should be given leave to amend points of defence – whether respondents' proposed defences reasonably arguable EQUITY – third party claim by Commonwealth on undertaking as to damages given in support of interlocutory injunction restraining alleged patent infringement – where patent later held invalid – where applicants seek to defend claim on basis that judgment holding patent invalid wrongly decided and that it would therefore be inequitable to permit recovery pursuant to undertaking as to damages – leave to amend to raise such defence refused EQUITY – third party claim on undertaking as to damages – where applicants seek to defend such claim on basis of delay – whether defence based upon failure of Commonwealth to notify possibility of such claim prior to disposition of application for special leave to appeal reasonably arguable – leave to amend to raise such defence refused – whether defence based upon delay occasioning prejudice arising out of loss of evidence sufficiently pleaded – leave to amend to raise such defence granted on terms Legislation: National Health Act 1953 (Cth) Federal Court of Australia Act 1976 (Cth) s 31A Copyright Act 1968 (Cth) s 44BA Therapeutic Goods Legislation Amendment (Copyright) Act 2011 (Cth) Court Procedures Rules 2006 (ACT) r 21 Cases cited: Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Apotex Pty Ltd (formerly GenRx Pty Ltd) v Sanofi-Aventis (2008) 78 IPR 485 Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416 AstraZeneca AB v Apotex Pty Ltd (2014) 226 FCR 324 De L v Director-General of New South Wales Department of Community Services & Anor (1997) 190 CLR 207 DJL v The Central Authority (2000) 201 CLR 226 European Bank Ltd v Evans (2010) 240 CLR 432 Ex parte Hall; In re Wood (1883) 23 Ch D 644 GenRx Pty Ltd v Sanofi-Aventis (2007) 73 IPR 502 Graham v Campbell (1878) 7 Ch D 490 Official Trustee in Bankruptcy v Tooheys Ltd (1993) 29 NSWLR 641 Orr v Ford (1989) 167 CLR 316 Spencer v The Commonwealth of Australia (2010) 241 CLR 118 Date of hearing: 18 December 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 53 Counsel for the Commonwealth: Mr T Howe QC with Ms FT Roughley Solicitor for the Commonwealth: Corrs Chambers Westgarth Counsel for the Respondents: Mr J Sheahan QC with Mr S Nixon and Ms P Arcus Solicitor for the Respondents: Jones Day IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1639 of 2007 BETWEEN: COMMONWEALTH OF AUSTRALIA Other AND: SANOFI (FORMERLY SANOFI-AVENTIS) First Respondent SANOFI-AVENTIS US LLC Second Respondent BRISTOL-MYERS SQUIBB INVESTCO LLC Third Respondent JUDGE: NICHOLAS J DATE OF ORDER: 24 april 2015 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The first, second and third respondents (the Sanofi parties) be granted leave to file Further Amended Points of Defence in the form of their draft document dated 19 November 2014 subject to the following conditions: (a) para 84A(c)(i) and particular (1) are to be deleted; (b) para 84A(c)(ii) and particular (2) are to be deleted unless accompanied by additional particulars identifying the evidence that the Sanofi parties contend has been lost or is no longer available as a result of the alleged delay; and (c) para 86 is to be deleted. 2. Any such Further Amended Points of Defence be filed and served within 14 days. 3. The Commonwealth file and serve Points of Reply to the Further Amended Points of Defence within 35 days. 4. The Sanofi parties pay the Commonwealth any costs thrown away by reason of the amendment. 5. The costs of the Sanofi parties' interlocutory application for leave to amend be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1639 of 2007 BETWEEN: COMMONWEALTH OF AUSTRALIA Other AND: SANOFI (FORMERLY SANOFI-AVENTIS) First Respondent SANOFI-AVENTIS US LLC Second Respondent BRISTOL-MYERS SQUIBB INVESTCO LLC Third Respondent JUDGE: NICHOLAS J DATE: 24 april 2015 PLACE: SYDNEY REASONS FOR JUDGMENT INTRODUCTION 1 Before me is an application by the respondents (Sanofi) for leave to file and serve "Further Amended Points of Defence to Claim by the Commonwealth of Australia" (FAPD). The respondent to the application (Commonwealth) opposes some, but not all, of the proposed amendments. Those that are opposed by the Commonwealth relate to the following topics: infringement of copyright in the Plavix product information (Plavix PI), the Plavix consumer medicine information (Plavix CMI) and/or the Plavix Summary of Product Characteristics (Plavix SPC) (FAPD paras 62(ba), 63(da), 84A(a)-(b)); prejudice arising out of the Commonwealth's delay in bringing its compensation claim (FAPD para 84A(c)); and the Full Court decision in AstraZeneca AB v Apotex Pty Ltd (2014) 226 FCR 324 (FAPD para 86). 2 The relevant amendments were opposed by the Commonwealth primarily on the basis that they raised defences that had no prospect of success, though it also relied upon what it characterised as unexplained delay on the part of Sanofi in raising such defences. 3 No hearing date has been fixed in this matter and the Commonwealth has made it clear that it will require a lengthy period in which to prepare its evidence regardless of how the present application is determined. Factual Background 4 On 16 August 2007, Apotex Pty Ltd (Apotex), then called GenRx Pty Ltd, commenced a proceeding against Sanofi seeking the revocation of Australian patent number 597784 (Patent). Sanofi then cross-claimed against Apotex for threatened infringement of the Patent. 5 Gyles J heard an application brought by Sanofi for interlocutory relief. The relief sought included an interlocutory injunction restraining Apotex from, inter alia, selling or offering to sell pharmaceutical compositions which had, as an active ingredient, the compound known as clopidogrel (clopidogrel products). His Honour granted the interlocutory relief sought on 25 September 2007 (see GenRx Pty Ltd v Sanofi-Aventis (2007) 73 IPR 502). 6 As a condition of obtaining the interlocutory injunction, Sanofi was required to give the usual undertaking as to damages. The undertaking given to the Court by Sanofi required it to: (a) submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person whether or not a party, adversely affected by the operation of the interlocutory injunction or any continuation (with or without variation); and (b) pay the compensation referred to in subpara (a) to the person or persons there referred to. 7 His Honour also accepted an undertaking proffered by Apotex that, until the determination of the proceeding or further order, it would not take any steps to obtain listing of any clopidogrel products under the Pharmaceutical Benefits Scheme (PBS) maintained by the Commonwealth of Australia under the National Health Act 1953 (Cth). 8 There was a trial of the proceeding before Gyles J. His Honour found that some of the claims of the Patent were valid (claims 2, 3, 4 and 5) but that others (claims 1 and 6 – 11) were invalid (see Apotex Pty Ltd (formerly GenRx Pty Ltd) v Sanofi-Aventis (2008) 78 IPR 485). His Honour made a declaration that the clopidogrel products that Apotex proposed to market and sell in Australia infringed claim 3 of the Patent. His Honour also granted an injunction restraining any infringement of claim 3. 9 Apotex filed a notice of appeal from the judgment of Gyles J. In the appeal proceeding Apotex gave undertakings to the Court that it would not take any steps to obtain a listing of any clopidogrel products under the PBS and that it would not infringe any of claims 1 and 6 – 11 of the Patent until the determination of the appeal or further order. Sanofi gave cross-undertakings as to damages in the usual form. 10 The Full Court subsequently upheld Apotex's appeal and ordered that the Patent be revoked (see Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416). Sanofi obtained a stay of the order until the determination of an application for special leave to appeal to the High Court of Australia. In return Sanofi provided a further undertaking as to damages. The application for special leave was refused on 12 March 2010. 11 By notice of motion filed on 4 May 2010 Apotex sought, inter alia, orders for the payment of compensation by Sanofi pursuant to the various undertakings provided by Sanofi during the course of the proceedings both at first instance and on appeal. 12 By interlocutory application filed on 11 April 2013, the Commonwealth also sought orders that it be paid compensation by Sanofi pursuant to the various undertakings provided during the course of the proceedings both at first instance and on appeal. The Commonwealth filed and served points of claim on 17 May 2013. 13 On 7 November 2014 Apotex discontinued its claim against Sanofi. That discontinuance was filed as a result of a settlement reached between Apotex and Sanofi. The Commonwealth is now the sole claimant. 14 The Commonwealth has provided some particulars of its damages. It alleges it has suffered financial loss in excess of $60 million as a result of Apotex being prevented by the various interlocutory orders and undertakings from achieving a listing for its clopidogrel products under the PBS. Most of the Commonwealth's loss is said to flow from statutory price reductions and price disclosure reductions that would have occurred had Apotex not been the subject of the relevant interlocutory restraints. 15 Before dealing with each of the contested amendments, it is desirable that I refer to some general principles that bear on the present application. Section 31A 16 The Commonwealth submitted that leave to make the relevant amendments should be refused on the ground that the defences they purport to raise have no reasonable prospect of success and would be amenable to summary dismissal pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth). 17 In Spencer v The Commonwealth of Australia (2010) 241 CLR 118 all members of the High Court who addressed the meaning and effect of s 31A recognised that the power to summarily terminate a proceeding is not to be exercised lightly and must be exercised with caution (see French CJ and Gummow J at [24], Hayne, Crennan, Kiefel and Bell JJ at [60]). Hayne, Crennan, Kiefel and Bell JJ emphasised (at [56]-[60]) the use of the phrase "no reasonable prospect" in s 31A and the undesirability of judicial glossing of those words. 18 French CJ and Gummow J said (at [25]) that subs 31A(2) "requires a practical judgment by the Federal Court as to whether the applicant has more than a 'fanciful' prospect of success" and that summary judgment should not be awarded to a respondent merely because the Court is of the view that the applicant is unlikely to succeed on some relevant factual issue. 19 French CJ and Gummow J also said at [25]: Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success. Delay 20 The Commonwealth also referred me to Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (Aon) at [98] to [103]. Aon concerned an application for leave to amend made on the third day of a four week trial. The proposed amendments sought to raise a substantially different case to that previously pleaded against an insurance broker. Aon was concerned with (inter alia) r 21 of the Court Procedures Rules 2006 (ACT) which required that the rules governing (inter alia) the determination of applications to amend be applied to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense. 21 The plurality in Aon rejected the proposition that the power to allow an amendment should, as a general rule, be exercised in favour of allowing the amendment subject only to the payment of costs thrown away as a result of the amendment. Their Honours said at [98]: Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs. Their Honours added at [102]: The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment. 22 As already mentioned, no hearing date has been fixed in this matter and I do not consider that the amendments, if allowed, will have any adverse impact on the Court's business or the interests of other litigants in the timely disposition of other proceedings. On the other hand, the claim made by the Commonwealth is for a very substantial amount, and is legally and factually complex. Moreover, the Commonwealth's claim was not filed until long after Sanofi's application for special leave was determined. 23 I am not disposed to deny Sanofi the opportunity to raise genuinely arguable defences at this stage of the proceeding unless the Commonwealth satisfies me that it will suffer some specific prejudice beyond that which stems from the Commonwealth having to investigate and, if so advised, call evidence to meet, the particular defences which Sanofi seeks to raise. Nevertheless, it is still up to Sanofi to persuade me that the defences that it now seeks leave to raise are adequately pleaded and reasonably arguable. The undertaking as to damages 24 Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 (Air Express) concerned a claim on an undertaking as to damages given by a plaintiff when obtaining an interim injunction against the Commonwealth. The claimant also appeared on the return date and was (on its own application) joined as a defendant. The undertaking was in the form which was customary at that time. It required the plaintiff to: abide by any order which the Court … may make as to damage in case the Court … shall hereafter be of the opinion that the defendants shall have sustained any, by reason of this Order, which the plaintiff ought to pay. 25 The main points of contention in Air Express concerned the issues of remoteness and causation and, in particular, whether the loss claimed by the applicant was suffered as a result of the grant of the interlocutory injunction or the commencement of the litigation in which the interlocutory injunction was obtained. 26 Aickin J referred at 260 to the decision of the English Court of Appeal in Graham v Campbell (1878) 7 Ch D 490 in which James, Cotton and Thesiger LJJ said at 494: The undertaking as to damages which ought to be given on every interlocutory injunction is one to which (unless under special circumstances) effect ought to be given. If any damage has been occasioned by an interlocutory injunction, which on the hearing is found to have been wrongly asked for, justice requires that such damage should fall on the voluntary litigant who fails, not on the litigant who has been without just cause made so. 27 Aickin J also referred to the equitable nature of the remedy provided by the undertaking as to damages. In the course of considering the nature of the loss recoverable under an undertaking as to damages, his Honour observed at 266-267: In a proceeding of an equitable nature it is generally proper to adopt a view which is just and equitable, or fair and reasonable, in all the circumstances rather than to apply a rigid rule. However the view that the damages should be those which flow directly from the injunction and which could have been foreseen when the injunction was granted, is one which will be just and equitable in the circumstances of most cases and certainly in the present case. This passage in his Honour's reasons was cited with approval by the plurality in European Bank Ltd v Evans (2010) 240 CLR 432 (European Bank) at [18]. 28 On appeal, Barwick CJ and Stephen J agreed with Aickin J's analysis of the relevant authorities except, in the case of Stephen J, in one respect not presently relevant. Gibbs J stated at 311-312: The object of requiring a plaintiff who seeks an interlocutory injunction to enter into an undertaking of this kind is to attempt to ensure that a defendant will receive compensation for any loss which he suffers by reason of the grant of the injunction if it appears in the event that the plaintiff was not entitled to obtain it. The insistence upon the giving of an undertaking is a very important, if not an essential, means of preventing injustice from being done by the court when it makes an order at an interlocutory stage, before the rights of the parties have been finally determined. The court has a discretion not to enforce such an undertaking, but unless the defendant has been guilty of conduct that would render it inequitable to enforce the undertaking it would seem just, speaking generally, that a plaintiff who has failed on the merits should recompense the defendant for the damage that he has suffered as the result of the making of the interlocutory order. 29 Mason J noted at 322-323 that it previously had been held that the fact that the law was doubtful at the time when the interlocutory injunction was granted was not a reason for not awarding damages on the undertaking. His Honour added at 323: There are statements which indicate that the court has a discretion to decide whether it shall order an inquiry for damages for breach of an undertaking given to the court - see Smith v. Day [(1882) 21 Ch.D. 421 at pp. 425-427]. But the discretion is to be exercised according to well-settled principle. 30 In relation to the question of causation, Mason J suggested that, rather than examining authorities which deal with that issue in the context of contract, tort, or other situations, the Court was best advised to look to the purpose for which an undertaking as to damages is granted. His Honour said at 324-325: The object of the undertaking is to protect a party, normally the defendant, in respect of such damage as he may sustain by reason of the grant of the interim injunction in the event that it emerges that the plaintiff is not entitled to relief. 31 After referring to Mason J's reasons, the plurality in European Bank said at [17]: A party seeking an equitable remedy is required to "do equity" and this is the origin of the requirement that the party giving an undertaking as to damages submit to such order for payment of compensation as the court may consider to be just. Given its origin and application to varied circumstances in particular cases, the process of assessment of compensation cannot be constrained by a rigid formulation. 32 It is common ground that a defendant's claim on an undertaking as to damages can be defeated by an equitable defence such as laches or acquiescence or unclean hands. The latter defence may be available if the impropriety complained of has an immediate and necessary relation to the equitable remedy sought by the claimant: Official Trustee in Bankruptcy v Tooheys Ltd (1993) 29 NSWLR 641. Referring to the principle that he who comes to equity must come with clean hands, Gleeson CJ (with whom Meagher JA agreed) said at 650: The application of that principle as a bar to discretionary equitable relief has been considered in such cases as Meyers v Casey (1913) 17 CLR 90, Hewson v Sydney Stock Exchange Ltd (1967) 87 WN (Pt 1) (NSW) 422 and FAI Insurances Ltd v Pioneer Concrete Services Ltd (1987) 15 NSWLR 552. The unmeritorious conduct which debars relief is not "general depravity"; it must be conduct which has "an immediate and necessary relation to the equity suited for": Dering v Earl of Winchelsea (1787) 1 Cox 318 at 319; 29 ER 1184 at 1184-1185; see also Keystone Driller Co v General Excavator Co 290 US 240 (1933). On that test, the present case is one in which the relationship between the false representations and the equity sued upon is sufficiently close to establish the defence. COPYRIGHT 33 Sanofi proposes to defend the Commonwealth's claims on the basis that it would be "unreasonable or inequitable" to allow the claims in circumstances where: Apotex's clopidogrel products would not have been listed on the PBS without Apotex infringing copyright in the Plavix PI and/or the Plavix SPC; and any supply by Apotex of its clopidogrel products would have involved an infringement of copyright in the Plavix CMI. 34 It should be noted that s 44BA of the Copyright Act 1968 (Cth), which was introduced by the Therapeutic Goods Legislation Amendment (Copyright) Act 2011 (Cth) did not come into force until 28 May 2011. 35 It is not contended by Sanofi in any of the proposed amendments that Sanofi would have taken steps to prevent Apotex from infringing copyright in either the Plavix PI, the Plavix SPC or the Plavix CMI. As the Commonwealth emphasised in its submissions, the defence sought to be relied upon by Sanofi is advanced on the basis that it would simply be inequitable or unreasonable to make an award in favour of the Commonwealth in circumstances where Apotex would have infringed the copyright in the Plavix PI or the Plavix SPC in the event Apotex had proceeded to obtain PBS listing of its clopidogrel products prior to supplying them to the public. The Commonwealth submitted that the proposition that it would be disentitled to relief on account of Apotex's infringement of copyright (actual or threatened) is untenable. 36 Sanofi's proposed defence raises an interesting point which is well-illustrated by the following hypothetical example. Assume that the defendant (D) is restrained from supplying its goods by an interlocutory injunction obtained by a plaintiff (P) on the basis of threatened patent infringement. Assume that D is successful at trial but that it is ultimately held that D cannot recover damages on the usual undertaking as to damages because of its "unclean hands" as a result of (for example) its misuse of P's confidential information. Can a retailer (R) who was to have supplied D's goods succeed in its own claim on the undertaking even though D cannot due to its unclean hands? If the question is confined to a consideration of whether R has unclean hands then the answer will be in the affirmative. It might be thought somewhat odd that R should be permitted to recover in such circumstances given that D could not. 37 I think the point raised by Sanofi should be permitted to go to trial. The authorities do not provide any clear guidance in this case because they have concerned quite different factual situations to those that are alleged here. I certainly do not regard Sanofi's argument as being precluded by existing authority. 38 Nor am I persuaded that it would be appropriate to refuse the amendment on account of delay. Senior Counsel for the Commonwealth acknowledged that Sanofi raised the possibility it might wish to rely upon copyright in early February 2014. The Commonwealth accepts that the relevant delay covered the period from June 2013 to February 2014 and does not rely on delays that have occurred during the course of the remainder of 2014. 39 In its submissions the Commonwealth also emphasised the heavy forensic burden in resisting the copyright allegations that it would be required to undertake in circumstances were Apotex and Sanofi have now settled their differences. However, I am not persuaded that the difficulties involved in meeting the copyright allegations are likely to be anywhere near as difficult as the Commonwealth suggested. Sanofi has already provided the Commonwealth with the witness statements that will be relied upon to prove subsistence and ownership of copyright by Sanofi (or its related entities) and copying by Apotex of the putative copyright works. There is nothing before me to suggest that these are particularly complex issues or that there is likely to be any genuine dispute in relation to the facts relevant to subsistence or ownership of copyright. 40 It was also suggested by the Commonwealth that it may wish to establish that any copying by Apotex was permitted by reason of an implied licence. The possibility that the Commonwealth might wish to take that point is a matter that I have considered but I do not give it much weight in deciding whether the proposed amendment should be allowed. AstraZeneca 41 Sanofi wishes to argue that it would not be just and equitable, nor fair and reasonable, for the Court to require Sanofi to compensate the Commonwealth pursuant to Sanofi's undertakings as to damages in circumstances where, according to Sanofi, the validity of its patent claims would have been upheld had the Full Court in Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416 (Apotex) adopted the same approach to the question of obviousness and, in particular, the "starting point" issue, as was adopted by the Full Court in AstraZeneca AB v Apotex Pty Ltd (2014) 226 FCR 324 (AstraZeneca). In effect, Sanofi wishes to rely on an argument based upon the Full Court's reasoning in AstraZeneca that Apotex was wrongly decided and that Sanofi's patent should never have been revoked. 42 The argument that Sanofi should, or might, not be found liable to the Commonwealth because the Full Court's decision in Apotex was wrongly decided is not an argument that this Court can or should entertain. In my view, this argument necessarily involves a collateral attack upon the judgment of the Full Court in Apotex revoking the patent upon which Sanofi sued Apotex. Sanofi is bound by that judgment, not only as between Sanofi and Apotex, but also as between Sanofi and any other person seeking to claim on Sanofi's undertakings as to damages. The argument sought to be raised by Sanofi is antithetical to the rationale for requiring a party who obtains an interlocutory injunction to provide the usual undertaking as to damages. It is also at odds with the general principle favouring finality in litigation: see, for example, De L v Director-General of New South Wales Department of Community Services & Anor (1997) 190 CLR 207 at 215; DJL v The Central Authority (2000) 201 CLR 226 at [90]. 43 The argument that it would be unjust or inequitable to make an award of damages in favour of the Commonwealth based upon any difference of judicial opinion in Apotex and AstraZeneca is not reasonably arguable. Leave to make the proposed amendments founded upon this argument will be refused. Paragraph 84A 44 Proposed paragraph 84A relevantly states: Further, an order permitting the Commonwealth to recover damages under the First Undertaking, the Second Undertaking or the Third Undertaking in respect of the payments made by reason of the Apotex Clopidogrel Products not having been listed on the PBS and supplied during the Injunction Period would be unreasonable or inequitable because: (a) … (b) … (c) the Respondents have been prejudiced by: (i) the Commonwealth's failure to notify its intention to pursue a claim for compensation (under any of the First Undertaking, Second Undertaking or Third Undertaking), at or about the time any of those undertakings were given, if the patent revocation proceedings were lost; and/or (ii) delay by the Commonwealth in notifying and commencing its present claim under the undertakings post 12 March 2010. Particulars (1) The Respondents lost the opportunity to consider and determine, with knowledge of any such notification by the Commonwealth, whether to adopt a different course in relation to the provision of the undertakings, including whether to seek to vary or withdraw any of them, or in relation to the prosecution and conduct of the revocation proceedings before Gyles J and the appeal therefrom. (2) The Respondents' ability to defend the claim brought by the Commonwealth has been prejudiced by the Commonwealth's delay in notifying and commencing that claim, by reason that evidence relevant to that claim and the defence which would have been available at an earlier point in time has, or is likely to have, been lost or otherwise become unavailable. 45 It can be seen that Sanofi seeks to rely on delay occasioning prejudice in two different respects. First, it points to the Commonwealth's failure to notify Sanofi of its intention to pursue a claim for damages on the usual undertakings as to damages prior to the disposition of the special leave application on 12 March 2010. In substance, Sanofi seeks to argue that it was unreasonable and inequitable for the Commonwealth not to give notice of its intention to make a claim on the undertakings as to damages prior to that date should it be held that Sanofi was not entitled to the interlocutory relief it obtained. The proposed amendment suggests that such notice ought to have been given as early as the time when the first of the relevant undertakings was given to Gyles J. 46 There is authority that an application to recover on an undertaking as to damages ought to be made within a reasonable time after it is ascertained that the relevant interlocutory injunction should not have been granted: Ex parte Hall; In re Wood (1883) 23 Ch D 644; see, in particular, Baggallay LJ at 650-651 and Cotton LJ at 652. But in this case that could not have been ascertained until the High Court disposed of Sanofi's special leave application. It was only then that it could be said with confidence that the interlocutory relief obtained by Sanofi should not have been granted because the patent upon which it was founded was invalid. It cannot be overlooked in this context that Gyles J upheld the validity of claim 3, which Apotex conceded it would (if not restrained) infringe. It was only as a result of the appeal to the Full Court that Gyles J's finding that claim 3 was valid was overturned. 47 Also relevant to the prospect of success of this first way in which Sanofi puts the delay case is the absence of any allegation that it believed as a result of the Commonwealth's failure to give notice of any possible claim by the Commonwealth on the undertakings prior to the disposition of the special leave application that the Commonwealth would not make any such claim. It follows that the strength of the proposed defence is to be evaluated in circumstances where Sanofi does not assert that it believed that the Commonwealth did not propose to make any claim on the undertaking. 48 In my opinion, the proposition that it would be inequitable or unreasonable for the Commonwealth to recover on the undertakings merely because the Commonwealth did not notify Sanofi that it might wish to pursue a claim for damages prior to disposition of the special leave application has no reasonable prospect of success. 49 The other respect in which Sanofi seeks to rely on delay occasioning prejudice is founded upon the alleged loss of relevant evidence. This allegation is not properly particularised. The lack of particularity is important in two respects. First, Sanofi has failed to identify the evidence said to have been lost to it as a result of the delay thereby making it impossible for the Commonwealth to know what case it will be required to meet. Secondly, Sanofi has failed to indicate how the evidence alleged to have been lost (whatever it might be) may have cast a different light on the matter: Orr v Ford (1989) 167 CLR 316 at 330. This is a deficiency in the FAPD which Sanofi might be able to cure but I do not think it would be appropriate to allow Sanofi to amend so as to plead that it has suffered prejudice arising out of the loss or destruction of relevant evidence without it identifying what that evidence is. Disposition 50 Sanofi will be granted leave to file the FAPD subject to the following conditions: (a) para 84A(c)(i) and particular (1) are to be deleted; (b) para 84A(c)(ii) and particular (2) are to be deleted unless accompanied by additional particulars identifying the evidence that Sanofi contends has been lost or is no longer available as a result of the alleged delay; and (c) para 86 is to be deleted. 51 Sanofi will be required to file and serve the FAPD in accordance with such leave within 14 days. The Commonwealth will be required to file and serve Points of Reply to the FAPD within 35 days. 52 Sanofi should pay any costs thrown away as a result of the amendment. The costs of the interlocutory application will be reserved. 53 Orders accordingly. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas. Associate: Dated: 24 April 2015