Law firm Freehills has had a tactical win in the increasingly complex legal action involving the University of Western Australia, Sydney-based cancer treatment company Sirtex Medical Ltd and its former chairman Bruce Gray.
Law firm Freehills has had a tactical win in the increasingly complex legal action involving the University of Western Australia, Sydney-based cancer treatment company Sirtex Medical Ltd and its former chairman Bruce Gray.
In a ruling handed down in the Federal Court this week, Justice Robert French dismissed an application by Dr Gray for leave to issue a cross-claim against Freehills.
The legal battle was triggered by UWA claiming a beneficial interest in Sirtex's intellectual property, which it says was developed by Dr Gray while he was employed there.
UWA recently amended its claim to include a related patented technology currently used by Sirtex.
In response, Sirtex stated it relied on Dr Gray's representations that the intellectual property was his, and has filed a counter-claim against him, claiming that if it is held liable to the University then it is entitled to indemnity.
For his part, Dr Gray attempted to cross-claim against the 1997 and 2000 partners of what was then Freehill, Hollingdale & Page, alleging that the law firm he employed when setting up the company had failed in its duty to perform due dilligence functions, by ensuring the University had no claim over the intellectual property central to its product development.
In his decision, Justice French refused leave for Dr Gray to cross-claim against Freehills, on the grounds that it would add to the complexity and costs of proceedings.
"Because of the difficulties to which this would give rise as a matter of case management, even with a separate trial, I consider the better course is for Dr Gray to commence a distinct action against Freehills," he said.
Justice French was not called upon to decide the merit of Dr Gray's claim against the firm.
Freehills was the long-standing legal adviser to Sirtex and acted for both the company and Dr Gray in the early stages of the UWA claim, but now acts for neither.
In other news, Sirtex plans a further amendment to its cross-claim against Dr Gray. The cross-claim currently states that, if the court finds in favour of UWA, Sirtex will allege he misled the company and breached warranties provided when he purported to assign the inventions to Sirtex in 1997.
Under the proposed change, Sirtex will pursue the cross-claim irrespective of the success of UWA's claim.
The company also seeks to keep him from breaching contractual obligations not to compete with the business of Sirtex while he remains a shareholder and for a period of up to three years after he ceases to hold shares in the company.
Sirtex expects its proposed amendments to be heard in court on February 23.
