FEDERAL COURT OF AUSTRALIA Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) [2015] FCA 1457 Citation: Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) [2015] FCA 1457 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 Parties: COMMONWEALTH OF AUSTRALIA v WYETH and WYETH AUSTRALIA PTY LTD File numbers: VID 195 of 2009 NSD 596 of 2009 NSD 1124 of 2009 Judge: NICHOLAS J Date of judgment: 18 December 2015 Cases cited: Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) [2015] FCAFC 172 Australian Competition and Consumer Commission v MHG Plastic Industries Pty Ltd (2003) 136 FCR 1 Date of hearing: Determined on the papers Date of last submissions: 16 December 2015 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 11 Counsel for the Commonwealth: Mr T Howe QC with Ms FT Roughley Solicitor for the Commonwealth: Corrs Chambers Westgarth Counsel for the Respondents in Proceeding NSD 1639 of 2007: Dr S Nixon Solicitor for the Respondents in Proceeding NSD 1639 of 2007: Jones Day Counsel for the Respondents in Proceedings VID 195 of 2009, NSD 596 of 2009 and NSD 1124 of 2009: Mr JS Cooke Solicitor for the Respondents in Proceedings VID 195 of 2009, NSD 596 of 2009 and NSD 1124 of 2009: DLA Piper Australia Counsel for Pharmathen SA and Pharmathen Industrial SA Ms F Ashworth Solicitor for Pharmathen SA and Pharmathen Industrial SA Corrs Chambers Westgarth Solicitor for Generic Health Pty Ltd Ms J Owen of Bird & Bird Counsel for Alphapharm Pty Limited Mr SCG Burley SC with Mr PW Flynn Solicitor for Alphapharm Pty Limited King & Wood Mallesons Solicitor for Sigma Pharmaceuticals (Australia) Pty Limited Mr M Swinn of King & Wood Mallesons IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1639 of 2007 BETWEEN: COMMONWEALTH OF AUSTRALIA Applicant on the Stated Case AND: SANOFI (FORMERLY SANOFI-AVENTIS) First Respondent on the Stated Case SANOFI-AVENTIS US LLC Second Respondent on the Stated Case BRISTOL-MYERS SQUIBB INVESTCO LLC Third Respondent on the Stated Case JUDGE: NICHOLAS J DATE OF ORDER: 18 December 2015 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The costs awarded to the Commonwealth in respect of the case stated in proceedings NSD 1639 of 2007, VID 195 of 2009, NSD 596 of 2009 and NSD 1124 of 2009 include the Commonwealth's costs of making the application for the case stated in each such proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 195 of 2009 BETWEEN: COMMONWEALTH OF AUSTRALIA Applicant in the Stated Case AND: WYETH First Respondent on the Stated Case WYETH AUSTRALIA PTY LTD Second Respondent on the Stated Case JUDGE: NICHOLAS J DATE OF ORDER: 18 December 2015 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The costs awarded to the Commonwealth in respect of the case stated in proceedings NSD 1639 of 2007, VID 195 of 2009, NSD 596 of 2009 and NSD 1124 of 2009 include the Commonwealth's costs of making the application for the case stated in each such proceeding. 2. As between the Wyeth Parties and the Generic Parties, the Generic Parties' costs of the interlocutory applications heard by Nicholas J on 10 March 2015 be the applicant's costs in its interlocutory application seeking compensation from the Wyeth Parties. In this order: Generic Parties means: Alphapharm Pty Ltd (applicant for compensation in NSD 596 of 2009); - Generic Health Pty Ltd (applicant for compensation in NSD 1124 of 2009); - Sigma Pharmaceuticals (Australia) Pty Ltd (applicant for compensation in VID 195 of 2009); and - Pharmathen SA and Pharmathen Industrial SA (applicants for compensation in NSD 1124 of 2009); Wyeth Parties means: - Wyeth; and - Wyeth Australia Pty Ltd. 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 596 of 2009 BETWEEN: COMMONWEALTH OF AUSTRALIA Applicant on the Stated Case AND: WYETH First Respondent on the Stated Case WYETH AUSTRALIA PTY LTD Second Respondent on the Stated Case JUDGE: NICHOLAS J DATE OF ORDER: 18 December 2015 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The costs awarded to the Commonwealth in respect of the case stated in proceedings NSD 1639 of 2007, VID 195 of 2009, NSD 596 of 2009 and NSD 1124 of 2009 include the Commonwealth's costs of making the application for the case stated in each such proceeding. 2. As between the Wyeth Parties and the Generic Parties, the Generic Parties' costs of the interlocutory applications heard by Nicholas J on 10 March 2015 be the applicant's costs in its interlocutory application seeking compensation from the Wyeth Parties. In this order: Generic Parties means: - Alphapharm Pty Ltd (applicant for compensation in NSD 596 of 2009); - Generic Health Pty Ltd (applicant for compensation in NSD 1124 of 2009); - Sigma Pharmaceuticals (Australia) Pty Ltd (applicant for compensation in VID 195 of 2009); and - Pharmathen SA and Pharmathen Industrial SA (applicants for compensation in NSD 1124 of 2009); Wyeth Parties means: - Wyeth; and - Wyeth Australia Pty Ltd. 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 1124 of 2009 BETWEEN: COMMONWEALTH OF AUSTRALIA Applicant on the Stated Case AND: WYETH First Respondent on the Stated Case WYETH AUSTRALIA PTY LTD Second Respondent on the Stated Case JUDGE: NICHOLAS J DATE OF ORDER: 18 december 2015 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The costs awarded to the Commonwealth in respect of the case stated in proceedings NSD 1639 of 2007, VID 195 of 2009, NSD 596 of 2009 and NSD 1124 of 2009 include the Commonwealth's costs of making the application for the case stated in each such proceeding. 2. As between the Wyeth Parties and the Generic Parties, the Generic Parties' costs of the interlocutory applications heard by Nicholas J on 10 March 2015 be the applicant's costs in its interlocutory application seeking compensation from the Wyeth Parties. In this order: Generic Parties means: - Alphapharm Pty Ltd (applicant for compensation in NSD 596 of 2009); - Generic Health Pty Ltd (applicant for compensation in NSD 1124 of 2009); - Sigma Pharmaceuticals (Australia) Pty Ltd (applicant for compensation in VID 195 of 2009); and - Pharmathen SA and Pharmathen Industrial SA (applicants for compensation in NSD 1124 of 2009); Wyeth Parties means: - Wyeth; and - Wyeth Australia Pty Ltd. 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 Applicant on the Stated Case AND: SANOFI (FORMERLY SANOFI-AVENTIS) First Respondent on the Stated Case SANOFI-AVENTIS US LLC Second Respondent on the Stated Case BRISTOL-MYERS SQUIBB INVESTCO LLC Third Respondent on the Stated Case IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 195 of 2009 BETWEEN: COMMONWEALTH OF AUSTRALIA Applicant on the Stated Case AND: WYETH First Respondent on the Stated Case WYETH AUSTRALIA PTY LTD Second Respondent in the Stated Case IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 596 of 2009 BETWEEN: COMMONWEALTH OF AUSTRALIA Applicant on the Stated Case AND: WYETH First Respondent on the Stated Case WYETH AUSTRALIA PTY LTD Second Respondent on the Stated Case IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1124 of 2009 BETWEEN: COMMONWEALTH OF AUSTRALIA Applicant on the Stated Case AND: WYETH First Respondent on the Stated Case WYETH AUSTRALIA PTY LTD Second Respondent on the Stated Case JUDGE: NICHOLAS J DATE: 18 December 2015 PLACE: SYDNEY REASONS FOR JUDGMENT 1 A question has arisen in relation to the costs of the case stated in proceedings NSD 1639 of 2007, VID 195 of 2009, NSD 596 of 2009 and NSD 1124 of 2009 ("the relevant proceedings") heard and determined by the Full Court (Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) [2015] FCAFC 172 – Dowsett, Kenny and Nicholas JJ). The Full Court made various costs orders including orders requiring the Sanofi Parties and the Wyeth Parties to each pay 50% of the Commonwealth's costs on a party/party basis. Those costs were defined to mean the Commonwealth's combined costs of and incidental to the case stated in each of the relevant proceedings. 2 At the time judgment was delivered the Commonwealth raised the question whether the costs awarded to it included the costs of making the application for the stated case in each of the relevant proceedings. Those applications were originally heard and determined by me and I reserved the costs ("the reserved costs"). The question is who should pay the reserved costs. 3 The Commonwealth, the Sanofi Parties and the Wyeth Parties were content for me to resolve this question without having to reconvene the Full Court. To be clear, however, the Commonwealth's position is that as between it, the Sanofi Parties and the Wyeth Parties, the reserved costs are covered by the Full Court's existing orders because the costs of the applications for the case stated were "incidental" to the case stated in each of the relevant proceedings. 4 As Emmett J pointed out in Australian Competition and Consumer Commission v MHG Plastic Industries Pty Ltd (2003) 136 FCR 1, the phrase "costs of and incidental to" is a phrase of some antiquity. His Honour said at [20] that the phrase "would ensure that costs incurred as part of the preparation for litigation will be recoverable as costs of the litigation." In the present case I think the phrase catches the Commonwealth's costs of the applications for a case stated. 5 On the assumption that the reserved costs were not covered by the Full Court's orders, the Sanofi Parties and the Wyeth Parties submitted that there should be no order as to the costs of the applications for the case stated or, alternatively, that they should only pay, as between them, 25% of the Commonwealth's costs of the applications. 6 Were it necessary for me to have decided the issue, (ie. if I was of the view that the Full Court's orders did not already provide for the Commonwealth's costs of making the applications for the case stated) I would have ordered the Sanofi Parties and the Wyeth Parties to each pay 50% of those costs. 7 I accept that the case stated proposed by the Commonwealth for referral to the Full Court was considerably broader than that which was ultimately ordered. Nevertheless, I think the applications are properly seen as discreet applications upon which the Commonwealth was substantially successful. In the circumstances, I think costs should follow the event, and that it is appropriate that (as contemplated by the Full Court's orders) the Sanofi Parties and Wyeth Parties each pay 50% of the Commonwealth's costs of the applications for a stated case. 8 The position of the Generic Parties (as defined by the Full Court's orders) is rather different. There is no suggestion that the Full Court's costs orders cover their costs of their more limited opposition to the Commonwealth's applications for the case stated. 9 I do not think it is appropriate to make any order in the Generic Parties' favour against the Commonwealth. The only question is whether the Wyeth Parties should pay the Generic Parties' costs. It seems to me that the most appropriate order to make in relation to the reserved costs of the Generic Parties (including Pharmathen SA and Pharmathen Industrial SA) is that they be the relevant applicant's costs in its application for compensation. 10 As between the Commonwealth, the Sanofi Parties and the Wyeth Parties, I think the most appropriate order is one that makes clear that the costs awarded to the Commonwealth by the Full Court include the Commonwealth's costs of making the relevant applications. 11 Orders accordingly. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas. Associate: Dated: 18 December 2015