Pan Pharmaceutical’s Representations Misleading And Deceptive But Not Negligent

McGrath; in the matter of Pan Pharmaceuticals Ltd (in liq) v Australian Naturalcare Products Pty Ltd [2006] FCA 1403 (first instance); [2008] FCAFC 2 (appeal)

• A failure to meet ongoing supply and quality assurance may constitute misleading and deceptive conduct.
• The claim for pure economic loss in negligence failed because the plaintiff was not owed a duty of care as it had failed to protect itself by insurance and appropriate contractual terms.

Readers may remember that Pan Pharmaceuticals Limited was a substantial contract manufacturer of complementary medicines. It held a manufacturing licence until 28 April 2003 when it was suspended by the Therapeutic Goods Administration (TGA). Pan ceased manufacturing, became insolvent and was ultimately wound up.