Myriam Cauvin v Philip Morris Limited (Acn 004 694 428) (Including as representative of the Companies set out in Schedule 1 of the Statement of Claim) and Ors [2003] NSWSC 631 (1 August 2003)

Last Updated: 5 August 2003

NEW SOUTH WALES SUPREME COURT

CITATION: Myriam Cauvin v Philip Morris Limited (ACN 004 694 428) (Including as representative of the Companies set out in Schedule 1 of the Statement of Claim) & Ors [2003] NSWSC 631



CURRENT JURISDICTION:

FILE NUMBER(S): 11301/02

HEARING DATE{S): 31/3/03, 1/4/03, 2/4/03

JUDGMENT DATE: 01/08/2003

PARTIES:
Plaintiff - MYRIAM CAUVIN
1st Defendant - PHILIP MORRIS LIMITED (ACN 004694428)
2nd Defendant - PHILIP MORRIS (AUSTRALIA) LIMITED (ACN 004 316 901)
3rd Defendant - BRITISH AMERICAN TOBACCO AUSTRALIA SERVICES LIMITED - (FORMERLY KNOWN AS WD & HO WILLS (AUST) LTD)
4th Defendant - WD & HO WILLS HOLDINGS LIMITED (ACN 003 763 291
5th Defendant - BRITISH AMERICAN TOBACCO AUSTRALASIA LIMITED (FORMERLY KNOWN, AS ROTHMANS HOLDINGS LTD)
6th Defendant - BRITISH AMERICAN TOBACCO AUSTRALIA LTD (FORMERLY KNOWN AS ROTHMANS OF PALL MALL (AUST) LTD)
7th Defendant - IMPERIAL TOBACCO AUSTRALIA LTD (ACN 046 148 681)

JUDGMENT OF: Bell J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
Plaintiff: N. Francey
1st & 2nd Def: J.Sher QC / J. Sackar QC/ S. O'Meara
3rd & 4th Def: D. Beach SC / M. Wheelahan
5th & 6th Def: I. Jackman / S. Goodman
7th Def: L. Foster SC / I. Pike

SOLICITORS:
Plaintiff: Maurice May & Co
1st & 2nd Def: Allens Arthur Robinson
3rd & 4th Def: Corrs Chambers Westgarth
5th & 6th Def: Baker & McKenzie
7th Def: Gilbert & Tobin


CATCHWORDS:


ACTS CITED:
Civil Liability Amendment (Personal Responsibility) Act 2002
Fair Trading Act 1987
Federal Court of Australia Act 1976 (Cth)
Supreme Court Rules 1970
Trade Practices Act 1974
Trade Practices Amendment Act 1977

DECISION:
Strike out those parts of the statement of claim that are set out in the Schedule that is annexed to these reasons
Dismiss the seventh defendant's motion for summary dismissal.


JUDGMENT:



IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION


BELL J


Friday 1 August 2003

11301/02 Myriam Cauvin v Philip Morris Limited (ACN 004 694 428) (Including as representative of the Companies set out in Schedule 1 of the Statement of Claim) & Ors


JUDGMENT

1 BELL J: By notice of motion filed on 11 July 2002 the first and second defendants (the Philip Morris defendants) claim orders including that the whole of the statement of claim be struck out pursuant to Pt 15 r 26 of the Supreme Court Rules 1970 (the SCR). Two further motions filed on behalf of the Philip Morris defendants on 7 August 2002 were also listed for hearing. These sought orders dismissing the proceedings or, alternatively, staying them as an abuse of the process of the Court and requiring that the plaintiff pay an amount into Court as security for costs.

2 The third and fourth defendants (the Wills defendants) also moved on notice for an order striking out the statement of claim, in whole or in part, pursuant to Pt 15 r 26 of the SCR. The Wills defendants also had a motion listed for hearing on the same date seeking that the plaintiff be required to pay security for costs.

3 The seventh defendant (ITA) by notice of motion filed on 7 August 2002 claimed orders for summary dismissal of the proceedings against it and, in the alternative, that the claims made against it in the statement of claim be struck out.

4 The fifth and sixth defendants (the Rothmans defendants) by notice of motion filed on 7 August 2002 claimed an order for further and better particulars of paragraphs 1.18 – 1.21 and 1.24(f) of the statement of claim and, in the alternative, that those paragraphs of the claim be struck out. (Paragraphs 1.20 and 1.21 are omitted from the amended statement of claim to which reference is made below). The Rothmans defendants also sought an order that the plaintiff pay security for costs.

5 Leave was given to the plaintiff to file an amended statement of claim in the form of the draft that had been served on the first to sixth defendants prior to the hearing of the motion (ITA had not been served with the amended statement of claim. No point was taken in this respect). References to the statement of claim that follow are references to the amended statement of claim.

6 The parties were agreed that the convenient course was for me to deal with the strike out applications and to stand over the balance of the Philip Morris defendants’ motion and each of the other motions, save for the motion filed by ITA, until after the determination of the former. ITA sought summary dismissal of the proceedings brought against it on grounds that are peculiar to it. I will return to the ITA motion.

7 Mr Jackman, who appeared with Mr Goodman for the Rothmans defendants, joined in the submissions put by the other defendants in support of the claim that the whole of the statement of claim should be struck out. Given the identity of the issues with respect to the case pleaded against the first six defendants it was not submitted that this occasioned any prejudice to the plaintiff.

8 Part 15 rule 26 of the SCR provides:

“26(1) Where a pleading -

(a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;

(b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or

(c) is otherwise an abuse of the process of the Court,

the Court may at any stage of the proceedings, on terms, order that the whole or any part of the pleading be struck out.”

9 The challenge with which I am concerned is that the pleading has a tendency to cause prejudice, embarrassment or delay in the proceedings. It is said that it fails to comply with the rules contained in Pt 15 of the SCR in that it does not plead any, or sufficient, material facts to enable the defendants to understand the case that is put against them and to formulate their defence to it. A number of more detailed objections were identified in schedules attached to the written submissions filed on behalf of the Philip Morris and the Wills defendants.

10 The purpose and function of pleadings is as explained by the High Court in Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 and Banque Commerciale SA en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279. Pleadings are designed to define with clarity the issues that are in dispute between the parties. In this way the Court is able to make rulings on the scope of discovery and other interlocutory matters and on the admissibility of evidence. The pleadings serve to put the other party on notice of the case that it is required to meet.

11 The defendants placed particular emphasis on the judgment of Foster J in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Ltd (1998) ATPR 41-633. In that case, dealing with a claim brought pursuant to s 52 of the TPA, his Honour said at 40,977:

“In the forefront of the statement of claim are contentions that the respondent has acted in breach of s 52 of the Act in that it has engaged in conduct, in trade or commerce, that is misleading or deceptive. In this connection it is important to remember that, as Fox J said in Brown & Anor v Jam Factory Pty Limited & Anor (1981) ATPR 40-213 at 42,928; [1981] FCA 35; (1981) 53 FLR 340 at 348: -

‘Section 52(1) is a comprehensive provision of wide impact, which does not adopt the language of any common law cause of action. It does not purport to create liability at all; rather does it establish a norm of conduct, failure to observe which has consequences provided for elsewhere in the same statute, or under the general law.’

It necessarily follows that when the section is sought to be used in litigation as the foundation of a cause of action or claim for some specific form of relief, it is imperative that the factual basis upon which the section is alleged to be brought into play must be stated with appropriate clarity in a statement of claim. This is, of course, a fundamental principle of pleading.”

12 The plaintiff pleads causes of action against the seven defendants, and a number of overseas companies identified in Schedules 1 – 4 that are said to be represented by them, pursuant to Pts IVA and V of the Trade Practices Act 1974 (TPA) and the equivalent provisions of the Fair Trading Acts of each State and Territory (as identified in Schedule 5) (the FTA). The defendants, and the companies that they represent, are alleged to have conspired to engage in misleading or deceptive conduct, or in conduct that was likely to mislead or deceive, contrary to s 52 of the TPA (and the FTA equivalent provisions). The plaintiff pleads in the alternative that the defendants’ conduct was unconscionable contrary to the provisions of s 51AA or 51AB of the TPA (and the FTA equivalent provisions). The plaintiff’s claim in unconscionability depends upon the same facts and circumstances as are pleaded in support of the claim brought under s 52 of the TPA.

13 It is the plaintiff’s case that the Philip Morris, Wills and Rothmans defendants agreed to engage in conduct to promote the benefits and pleasures of smoking and to deny or minimise the risks associated with smoking, including the likelihood of contracting smoking-related disease, and the risk of becoming addicted to nicotine. The conduct in which the defendants are alleged to have engaged falls within six broadly stated categories:

(i) advertising, marketing and promoting cigarettes as enhancing the life and enjoyment of life of consumers,

(ii) promoting certain brands of cigarettes, described as menthol, mild, light or low tar, (the “less hazardous” cigarettes) representing them to be healthier than other cigarettes or safer to smoke than other cigarettes,

(iii) making public statements of various kinds including denying the existence of reliable evidence concerning smoking and risks to health and of the effect of nicotine,

(iv) lobbying, including by making representations to the Federal and State governments to desist from taking actions likely to be effective in reducing smoking related disease,

(v) remaining silent or intentionally concealing knowledge of the association between smoking and nicotine addiction and smoking and disease, and

(vi) conduct relating to the uptake of smoking.

14 The conduct falling within each of the six categories is said to have been misleading or deceptive, or likely to mislead or deceive, in that the plaintiff alleges:

(i) smoking cigarettes does not enhance life and the enjoyment of life of consumers of cigarettes but rather it detracts from life and the enjoyment of it,

(ii) cigarettes marketed as “less hazardous” cigarettes are not healthy or healthier than other cigarettes nor safe to smoke or safer to smoke than other cigarettes,

(iii) reliable evidence existed making a causal link between cigarette smoking and increased risk to health and between nicotine and addiction,

(iv) the defendants did not have reasonable grounds for making the recommendations or representations to governments in connection with tobacco control measures,

(v) the defendants were under an obligation to disclose their knowledge of the association between cigarette smoking and addiction to nicotine and cigarette smoking and the risk of contracting smoking related disease,

(vi) the defendants should not have taken steps to maximise the occasions on which, and the likelihood that, persons would be induced to commence or continue or fail to quit cigarette smoking.

15 The statement of claim is indexed and extends over fifty-four pages. To this are annexed a further fifty-two pages comprising Schedules 1 to 5 and “A” to “F”.

16 A number of expressions that are used in the statement of claim are defined in an introductory Note to it including:

“(d) A reference to “at all relevant times” is a reference to the period from 1 October 1974 or, in respect of s 52A and/or 51AB of the TPA or any relevantly operating FTA, from the commencement date of that legislation.

(e) A reference to the “relevant period” is a reference to the period from January 1960.

(f) Where a defendant was incorporated after January 1960, a reference to the conduct of that defendant during the “relevant period” is a reference to its conduct since the date of its incorporation and a reference to “at all relevant times” is a reference from that date.”


17 The proceedings are brought against each of the defendants in their own right and as representing the overseas companies that are identified in Schedules 1 - 4. It is convenient to deal with the objections that were taken to the representative nature of the pleading at the outset.

18 In a case where “numerous persons” have the “same interest in any proceedings” Pt 8 r 13 of the SCR permits the proceedings to be commenced against any one or more defendants as representing all (or all except one or more of them) unless the Court otherwise orders. In written submissions each of the defendants contended that the references in the statement of claim to them representing the companies identified in Schedules 1 – 4 should be struck out since no facts were pleaded to bring the proceedings within the terms of Pt 8 r 13.

19 Part 8 r 13 of the SCR relevantly provides:

“13(1) Where numerous persons have the same interest in any proceedings the proceedings may be commenced, and, unless the Court otherwise orders, continued, by or against any one or more of them as representing all or as representing all except one or more of them.

(2) At any stage of proceedings pursuant to this rule the Court, on the application of the plaintiff, may appoint any one or more of the defendants or any other persons (as representing whom the defendants are sued) to represent all, or all except one or more, of those persons in the proceedings.

(3) Where, under subrule (2), the Court appoints a person who is not a defendant, the Court shall make an order under rule 8 adding him as a defendant.

(4) A judgment entered or order made in proceedings pursuant to this rule shall be binding on all the persons as representing whom the plaintiff’s sue or, as the case may be, the defendants are sued but shall not be enforced against any person not a party to the proceedings except with the leave of the Court.

(5) An application for leave under subrule (4) shall be made by motion, notice of which shall be served personally on the person against whom it is sought to enforce the judgment or order.

(6) Notwithstanding that a judgment or order to which an application under subrule (5) relates is binding on the person against whom the application is made, that person may dispute liability to have the judgment or order enforced against him on the ground that by reason of facts and matters particular to his case he is entitled to be exempted from the liability.”

20 The plaintiff seeks to have the Philip Morris defendants represent three companies: Philip Morris Companies, Inc (PMC) and Philip Morris Inc, US (PM) and Philip Morris International Inc (PMI). The pleading does not allege representation in terms. This appears to be the effect of it when regard is had to Note (g)(v), Schedule 1 and paragraphs 1.5 to 1.13 and 1.24 to 1.27.

21 In the same way the plaintiff seeks to have the Wills defendants represent four companies: British American Tobacco, PLC (BAT), B.A.T. Industries PLC (B.A.T. Industries), British American Tobacco (Investments) Ltd (BAT Investments) and BAT (UK & Export) Limited (BATUKE). Again, the allegation of representation is not pleaded in terms but this appears to be the effect of Note (g)(v), Schedule 2 and paragraphs 1.14 to 1.17A and 1.24 to 1.27.

22 The Rothmans defendants are pleaded as representing two companies: RJ Reynolds Tobacco Inc (RJR) or R J Reynolds Tobacco Holdings Inc (RJR Holdings). Again, the allegation of representation is not pleaded in terms but this appears to be the effect of Note (g)(v), Schedule 3, and paragraphs 1.18 and 1.19 and 1.24 to 1.27.

23 ITA is pleaded as representing two companies: Imperial Tobacco Limited, (Imperial) and/or Imperial Tobacco Group PLC (Imperial Group). Again, the allegation of representation is not pleaded in terms but this appears to be the effect of Note (g)(v), Schedule 4 and paragraphs 1.22 to 1.27.

24 The defendants contended that the statement of claim does not plead sufficient facts as a foundation for an assertion that there exists the same interest in the proceedings between them and the companies that they are said to represent. They also submitted that the requirement that there be “numerous persons” possessed of the same interest is not met in this case.

25 In the course of oral submissions Mr Francey contended that there was an identity of interest between the companies named in each of the four Schedules and the defendants who were said to represent them because they shared a common liability. This was said to flow from the circumstance that each of the overseas companies was a party to a conspiracy to procure the conduct for which the plaintiff seeks to make the defendants liable. This did not serve to make clear the basis upon which the defendants are said to be liable for the acts of the overseas companies named in Schedules 1 – 4.

26 Mr Francey relied on the decision of the High Court in Carnie v Esanda Finance Corporation Limited [1995] HCA 9; (1994-1995) 182 CLR 398. In their joint judgment Mason CJ, Deane and Dawson JJ observed at 404:

“It has been suggested that the expression ‘same interest’ is to be equated with a common ingredient in the cause of action by each member of the class (Prudential Assurance Co Ltd v Newman Industries Ltd [1981] Ch 229 at 255). In our view, this interpretation might not adequately reflect the content of the statutory expression. It may be it extends to a significant common interest in the resolution of any question of law or fact arising in the relevant proceedings. Be that as it may, it has now been recognised that persons having separate causes of action in contract or tort may have ‘the same interest’ in proceedings to enforce those causes of action.”

27 In paragraph 1.24 the plaintiff pleads that “the companies represented by the defendants have, at all relevant times, been involved in the affairs or activities of the one or other or more than one of the defendants.” It is not clear what allegation is made by the insertion of “involvement”. In particulars set out in (a) to (g) the plaintiff identifies features of the relationship between the defendants and the companies that they are said to represent. I will return to the particulars. In paragraph 1.25 the plaintiff goes on to plead that by reason of the matters set out in paragraph 1.24 and by “by reason of the control exercisable on that account” that the acts, actions, activities and conduct of the defendants were acts done, actions performed, or activities engaged in at the direction of the companies represented by the defendants.

28 The only particulars provided in support of the assertion in paragraph 1.24 that PM, MPI and PMC were at all relevant times involved in the affairs or activities of the Philip Morris defendants and, by reference to paragraph 1.25, that the Philip Morris defendants acted at the direction, and it may be subject to the control, of PM, PMI and PMC are the matters set out in (a) and (b). These particulars assert that PMC and/or PM and/or PMI are and have been for several years, directly or indirectly, a shareholder in one or other or both of the Philip Morris defendants and that the Philip Morris defendants have, in effect, distributed for sale within Australia cigarettes manufactured by or for PM and or manufactured cigarettes under brand names of PM and/or PMC at various times, presumably pursuant to some licence agreement or other arrangement or understanding between the respective companies. From March 1986 the second defendant was a wholly owned subsidiary of PMC.

29 In paragraph 1.2 the plaintiff pleads that at all relevant times the Wills defendants had BAT as their ultimate holding company. The only particulars provided in support of the assertion in paragraph 1.24 that BAT, B.A.T. Industries, BAT Investments and BATUKE were at all relevant times involved in the affairs or activities of the Wills defendants and, by reference to paragraph 1.25, that the Wills defendants acted at the direction, and it may be subject to the control, of BAT, B.A.T. Industries, BAT Investments and BATUKE are the matters set out in (c), (d) and (e). BAT and/or BAT Investments is, or are, said to be and to have been for several years directly or indirectly, including through BATA, a shareholder in one or other or both of the Wills defendants. BATA is a reference to the sixth defendant (paragraph 1.3(a)). BATUKE is and is said to have been for several years directly or indirectly involved in the export to Australia of cigarettes manufactured by or for BAT and BAT Investments. One or other or both of the Wills defendants are said to have distributed for sale to consumers within Australia cigarettes manufactured by or for B.A.T. and/or BAT Investments and/or manufactured cigarettes under brand names of B.A.T. and/or BAT Investments presumably pursuant to some licence agreement or other arrangement or understanding between the respective companies. The references to B.A.T. in paragraph 1.24(e) are confusing. Schedule 2 refers to B.A.T. Industries plc. In paragraph 1.15 B.A.T. Industries, P.L.C. is referred to as “B.A.T. Industries”. British American Tobacco p.l.c. in Schedule 2 is referred to in paragraph 1.14 as British American Tobacco, P.L.C. (“BAT”). In paragraph 1.15 BAT is alleged to be the successor to B.A.T. Industries. I take the reference to “B.A.T.” in paragraph 1.24(e) to be a reference to B.A.T. Industries.

30 The only particulars provided in support of the assertion in paragraph 1.24 that RJR or RJR Holdings were at all relevant times involved in the affairs or activities of the Rothmans defendants and, by reference to paragraph 1.25, that the Rothmans defendants acted at the direction, and it may be subject to the control, of RJR or RJR Holdings are the matters set out in (f). These particulars assert that one or other or both of the Rothmans defendants have distributed for sale to consumers within Australia cigarettes manufactured by RJR or RJR Holdings, and/or manufactured cigarettes under brand names of RJR or RJR Holdings presumably pursuant to some licence agreement or other arrangement or understanding between the respective companies.

31 The only particulars provided in support of the assertion in paragraph 1.24 that Imperial and/or Imperial Group were at all relevant times involved in the affairs or activities of ITA, by reference to paragraph 1.25, that ITA acted at the direction, and it may be subject to the control, of Imperial and/or Imperial Group are the matters set out in (g). These particulars assert that Imperial and/or Imperial Group are and have been for several years directly or indirectly a shareholder in ITA.

32 The existence of some common shareholding and/or of a contractual arrangement for the distribution of cigarettes does not seem to me to provide a sufficient basis for the assertion that the defendants have the same interest in the proceedings as the companies that they are said to represent. The position of the second defendant in the period since March 1986 is in a different category since the plaintiff pleads that from that date the second defendant has been the wholly owned subsidiary of PMC. However, the pleading remains inadequate in that it is asserted that the acts, actions, activities and conduct of the Phillip Morris defendants were acts done, actions performed, or activities or conduct engaged in at the direction of the companies represented by them without differentiation between the first and second defendants or PM, PMC and PMI or, for that matter, the companies named in Schedules 2, 3 and 4.

33 In his written submissions Mr Beach SC, who with Mr Wheelahan appeared for the Wills defendants, took up the question of whether there are “numerous persons” such as to attract the operation of Pt 8 r 13(1). He referred to the discussion of the history of the rule in the judgment of Toohey and Gaudron JJ in Carnie at 415. Their Honours observed that the rule is drawn from an English rule that was, in turn, derived from the practice of the Court of Chancery. In this context their Honours referred to a passage in the judgment of Lord Macnaghten in Duke of Bedford v Ellis [1901] AC at 8:

“The old rule in the Court of Chancery was very simple and perfectly well understood. Under the old practice the Court required the presence of all parties interested in the matter in suit, in order that a final end might be made of the controversy. But when the parties were so numerous that you never could ‘come at justice’, to use an expression in one of the older cases, if everybody interested was made a party, the rule was not allowed to stand in the way. It was originally a rule of convenience; for the sake of convenience it was relaxed.”

34 Mr Beach also referred me to Braybrook v Wright [1916] WN 74 noting that in that case five parties had been found not to be so numerous as to admit of a representation order.

35 Mr Francey submitted that the requirement that there exist “numerous persons” having the “same interest” in proceedings for the purposes of Pt 8 r 13 of the SCR is satisfied. As I understood his argument he did not contend that the total of eleven companies identified in Schedules 1 – 4 constituted “numerous persons” within the meaning of the rule. Rather he submitted that the potential existed for numerous persons to be joined as defendants to the proceedings. These being persons who had participated in the international conspiracy that is pleaded in paragraph 2.4. For ease of management of the proceedings the plaintiff had elected to sue the defendants each as representing a limited number of overseas companies with whom the defendants were said to be closely associated. Thus, in supplementary written submissions Mr Francey contended:

“It is not the point that the plaintiff has chosen to have certain of the defendants represent certain only of the overseas companies, nor that there are only eleven represented companies identified. The requirement of numerocity is satisfied by the vast array of companies and individuals said to have been involved in the implementation of international conspiracy in Australia: see the following sections of the amended statement of claim:

· Note (i) (page 5).

· Paragraph 2.4 and particulars there under (pages 15 – 17) – in particular the document identified in particular (d) lists seven companies and fifteen individuals (document behind tag 6 JK in the first and second defendants’ pleadings and particulars bundle).

· Paragraph 2.5 and particulars thereto (page 17) – the document identified at particular (a) involves correspondence between two additional individuals representing the former Wills companies and the Philip Morris companies (document behind tab 6 JK of the first and second defendants’ pleadings and particulars bundle).

· Moreover, paragraph 2.5 recites the incorporation of the Tobacco Institute of Australia Limited and that company and persons involved in the TIA’s activities over a twenty year period potentially could have been included in the proceedings.

· Paragraphs 2.26 – 2.41 (pages 44 – 48) – these paragraphs recite the involvement of the defendants and the companies represented by the defendants in the contravening conduct of the various defendants extending to include individuals in accordance with the definition contained in Note (i).

36 The above submission seems to me to be misconceived. The mechanism provided by Pt 8 r 13 of the SCR is one that allows for the representation of numerous plaintiffs, or numerous defendants, so as to avoid the practical inconvenience that may flow from having numerous parties to the proceedings. The plaintiff seeks to have each of the Philip Morris defendants, the Wills defendants, the Rothmans defendants and ITA represent a relatively small number of overseas companies. In total the number of overseas companies that the plaintiff seeks to have the defendants represent is not numerous. There is no reason why they could not be conveniently joined to the proceedings should the plaintiff wish to do so.

37 I accept the defendants’ submissions that the pleading does not allege facts sufficient to explain the basis upon which it is said that they have the same interest in the proceedings as the companies that they are said to represent. In addition I am persuaded that on its face this is not a proceeding in which the companies identified in Schedule 1 – 4 constitute “numerous persons”. Note (g)(v), (h), paragraphs 1.5 – 1.27 inclusive, paragraph 2.2, paragraphs 2.34 – 2.41 inclusive, the words “companies represented by the defendants” in paragraphs 3.8, paragraph 3.9(c), the balance of paragraph 3.10 after the words “contravening conduct”, the words “and the companies represented by the defendants in that conduct” in paragraph 3.11, the words “and companies represented by the defendants” in paragraph 3.11(a), (h) and (i), the words “and companies represented by the defendants” in paragraph 3.12(c)(ii) & (iii) will be struck out. Schedules 1 – 4 inclusive will be struck-out.

38 A central challenge that the defendants make to the pleading is that it asserts broad and wide ranging allegations that are unconnected to the case that the plaintiff makes arising out of her own circumstances. This criticism is encapsulated in the written submissions filed on behalf of the Philip Morris defendants (at paragraph [14]):

“The fifty-three pages of the pleading advance an amorphous mass of wide ranging allegations. That the pleading is accurately described as amorphous is exposed by one reading of the document. Many of the paragraphs of the pleading include vague, argumentative and rhetorical allegations that are, in turn, headed by vague, argumentative and rhetorical headings. The numbering of the paragraphs of the pleading does not assist in disclosing any logical structure to the statement of claim. To the extent that the pleading makes any allegations concerning the plaintiff, those allegations are swamped in wide ranging allegations concerning conspiracies, involvement in breaches of the TPA (and ‘the equivalent provisions’) and the ‘conduct’ – all or most of which can have no connection with the plaintiff.”

39 Section 52(1) of the TPA provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 51AA provides that a corporation shall not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States or Territories. Relevantly, s 51AA does not apply to conduct that is prohibited by s 51AB. Section 51AB provides that a corporation shall not, in trade or commerce, in connection with the supply or possible supply of goods to a person, engage in conduct that is, in all the circumstances, unconscionable.

40 The plaintiff claims relief pursuant to s 80 and s 87(1) of the TPA and the equivalent provisions of the FTA. Section 80(1) of the TPA permits the court to grant an injunction to restrain conduct, or threatened conduct, that contravenes Pt IVA or Pt V. The court may make such an order on the application of the Australian Competition and Consumer Commission or any other person. In Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11; 74 ALJR 604, Gleeson CJ and McHugh J observed:

“[13] It has been established for more than twenty years that s 80 means what it says. In Phelps v Western Mining Corporation Ltd ((1978) 33 FLR 327) the Full Court of the Federal Court rejected an argument that the words ‘any other person’ in s 80 should be read down as meaning that only persons who are affected by a contravention of Pt V could seek relief under s 80.

...

[17] As Bowen CJ observed in Phelps v Western Mining Corporation Ltd (at 330 – 331), the purpose of s 52 is to protect the public from being misled or deceived. An application for injunctive relief under s 80 is, in its nature, one for the protection of the public interest. The same may be said of s 163A. Any public protection of the applicant’s own business or other interests is incidental or collateral. What is sought to be established by the determination of a court is a violation by the respondent of a statutory norm of conduct, and the existence of a duty or liability.”


41 The plaintiff pleads her case upon the basis that each of the defendants from 1 October 1974 or the date of its incorporation, whichever is the later, conspired with each other defendant to engage in conduct that was misleading or deceptive, or likely to mislead or deceive, contrary to the provisions of s 52 of the TPA. The same conduct is alleged to have been unconscionable contrary to s 51AA or s 51AB of the TPA. The pleading includes a claim for the loss and damage that the plaintiff says that she suffered by reason of the contraventions of the TPA (and the FTA equivalent provisions) but her claim is not so confined. I accept the submission made by Mr Francey, who appeared on the plaintiff’s behalf, that the fact that she pleads matters going beyond her circumstances is a reflection of the fact that she seeks declaratory and injunctive relief in relation to alleged contraventions of Pts IVA and V of the TPA.

42 The defendants complain that the statement of claim incorporates a large number of allegations and defined terms that are substantially the same as the allegations made and the defined terms used in statements of claim in earlier proceedings in the Federal Court: Tobacco Control Coalition Inc v Philip Morris (Australia) Ltd & Ors [2000] FCA 1004 (TCCI) and Philip Morris (Australia) Ltd v Nixon [2000] FCA 229; 170 ALR 487. The defendants submit that it is not without significance that the earlier pleadings in both TCCI and Nixon were found to be defective. Mr Francey acknowledged that the statement of claim draws on the pleadings in TCCI and Nixon but he submitted that it had been refined in order to address a number of the criticisms made in those proceedings.

43 The proceedings in Nixon were brought pursuant to Pt IVA of the Federal Court of Australia Act 1976 (Cth) (the FCA). The relief sought by the applicants included relief under the general law and the TPA. The applicants in Nixon did not plead a case based on the collective conduct of all the defendants. The pleading was found to have failed to comply with the terms of s 33C(1)(a) of the FCA, which requires as a condition of the commencement of representative proceedings pursuant to Pt IVA, that the group members have claims against the same person. In Nixon the statement of claim was found to be so seriously defective, and the case advanced by the applicants so untenable, that the pleading was struck out and leave to replead as a representative proceeding was refused by a majority of the Full Court.

44 In Nixon Spender J and Hill J were of the opinion that the applicants should not be afforded a further opportunity to replead their application as a representative proceeding. Spender J in Nixon observed at [4]:

“The ‘Broad Canvas’ case that the applicants wish to allege is one that relies on ‘collective conduct’ of all respondents as being a cause of each applicant and class member failing to cease smoking after 1 October 1974. While the term ‘collective conduct’ is disarmingly seductive, on analysis, in the context of causation, it has to involve one of two assertions: either every piece of persuasion, every lobbying effort and every statement was part of a single campaign to which each of the six respondent companies was a party, and moreover, that campaign was causative of each class member’s loss or damage; or alternatively those particular parts of the claimed ‘collective conduct’ which influenced any particular applicant or group member (while the conduct of only one or more of the respondent companies) was conduct for which each of the other respondent companies shared causal responsibility, because, for example, those companies were party to a giant joint plan with the other companies, or aided or abetted or were knowingly concerned in the conduct of that company or those companies which was or were engaged, as principal or principals, in the particular influencing conduct.

[5] As to the first alternative, it simply cannot be that all of the conduct of all of the respondents (since either 1960 or 1974) was a cause of each applicant and each group member’s failure to cease smoking: such a case is so manifestly untenable as to fall within O 20 r 2 and O 11 r 16 of the Federal Court Rules.

[6] As to the second alternative, being the assertion that some part of the alleged campaign of deceit and misinformation, in which each of the respondents is said to have been involved, had a causal effect on the decision by each applicant and group member to fail to cease smoking after 1 October 1974, the questions posed by Sackville J in [158] of his reasons (while asked in a difficult (sic: different) context) are highly material on whether leave to replead a represented proceedings should be granted. There his Honour asks:

‘Would it be possible to particularise such a case in a manner that makes it clear how class members are said to have been influenced by advertisements or public statements they may never have seen? Is it feasible to contemplate continuing representative proceedings when the smoking history of and factors influencing members of the represented class are likely to vary so substantially?’

45 Mr Francey submitted that in these proceedings the plaintiff has pleaded the broad canvas case and that to this extent the criticisms of the statement of claim in the Nixon proceedings are not relevant. In Nixon Sackville J was critical of the statement of claim in a number of respects that were independent of its deficiencies in pleading a group proceeding. It will be necessary to return to these criticisms in due course.

46 In written submissions the Wills defendants contended:

“[7] The statement of claim appears to seek to put in issue virtually every activity of the defendants, including every instance of manufacture, distribution, sale, advertising, promotion, lobbying and other public statements of the defendants over a forty-two year period. It seeks to make the Wills defendants liable for all the alleged activities of the other defendants.

[8] The statement of claim seeks to achieve this by employing broad, all encompassing definitions, including ‘the relevant period’ which is defined as being the period from January 1960. The significance of January 1960 is not clear. It is almost three years prior to the plaintiff’s birth. The same commencement point for the relevant period was used in the Nixon case, evidently also without explanation (per Sackville J at [58]). Other broad terms include ‘the cigarettes’ which embraces about ninety different brands of cigarettes sold over the forty-two year period.

[9] References to the plaintiff and ‘other persons’ permeate the statement of claim. The other persons are not identified, rendering the scope of the proceeding virtually limitless.

[10] The most sweeping allegation, however, is ‘the defendants’ conduct’ for which the defendants are alleged to be responsible. The conduct is alleged in paragraph 2.16 and (whatever it is) it extends over the forty-two year span of ‘the relevant period’. ‘The conduct’ is alleged to include conduct which predates the commencement of the Trade Practices Act 1974 by some fourteen years, which the limited particulars of the conduct in Schedule C of the statement of claim confirms. ‘The defendants’ conduct’ possibly embraces every act of every defendant over the forty-two year period alleged.

47 The plaintiff seeks to make a case that each of the defendants is liable for the conduct of each of the other defendants by reason of the fact that each conspired with the others to contravene both s 52 and the unconscionability provisions of the TPA (and the equivalent provisions of the FTA). To this end the plaintiff relies on s 75B of the TPA which provides:

“75B(1) A reference in this Part to a person involved in a contravention of a provision of Part IV, IVA, IVB, V or VC, or of section 75AU or 75AYA, shall be read as a reference to a person who:

(a) has aided, abetted, counselled or procured the contravention;

(b) has induced, whether by threats or promises or otherwise, the contravention;

(c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d) has conspired with others to effect the contravention.”


48 Section 75B was inserted into the TPA by the Trade Practices Amendment Act 1977 which commenced on 1 July 1977. In the course of oral argument Mr Francey acknowledged that in the way the claim is pleaded the plaintiff depends upon the provisions of s 75B. He sought to confine her claim to one arising from 1 July 1977 (T 181). He submitted that the use of the expression the “relevant period” to embrace the period from January 1960 to the date of the claim remains appropriate since it is the plaintiff’s case that the defendants engaged in misleading conduct of the type described in paragraph 2.16 from a time prior to the enactment of the TPA, in some instances dating back to 1960. This forms part of the factual material upon which the plaintiff relies notwithstanding that the conduct was not unlawful prior to the enactment of the TPA and that the defendants’ joint liability for it does not arise prior to 1 July 1977.

49 The complaint that the defendants make, and that was not addressed by Mr Francey, is that no facts or insufficient facts are pleaded to explain the basis upon which the case is put against each defendant dating back to January 1960. Broadly put, her case is one of collective conduct on the part of the defendants to promote a false medical controversy concerning the health risks associated with smoking. The first material fact pleaded in this respect is the agreement of the first six defendants made in January 1975. Schedule “C” contains summaries of statements attributable to the Philip Morris, Wills and Rothmans defendants that date back to 1962. These are particulars of the allegation of conduct relating to the making of public statements contained in paragraph 2.16(C). It is not clear how prior to January 1975, when the plaintiff pleads the agreement between the first six defendants to engage in conduct that was misleading or deceptive, or likely to mislead or deceive (paragraph 2.3), the plaintiff relies on statements made by one or more defendants in the case she brings against all defendants.

50 I consider that the use of the expression “the relevant period”, as defined, is such as to cause prejudice, embarrassment and delay in the proceedings. No material facts are pleaded to explain the relevance of the defendants’ conduct over the period January 1960 to January 1975. Note (e) and the words “the relevant period”, wherever occurring, will be struck out.

51 The expression “at all relevant times” as defined in Note (d) is confusing given Mr Francey’s concession that the plaintiff’s claim is confined to the period from 1 July 1977. Note (d) and the words “at all relevant times”, wherever occurring, will be struck out.

52 The definitions of “TPA”, “FTA” and “equivalent provisions” set out in the Notes (a), (b) and (c) are also the subject of objection. In the defendants’ submission they give rise to multiple possibilities as to the way in which the plaintiff’s case is put. In this respect the defendants note that the TPA has been amended on numerous occasions and that the State and Territory Fair Trading Acts vary and that they have been amended from time to time.

53 The plaintiff pleads her case pursuant to both the TPA and the equivalent provisions of the State and Territory Fair Trading Acts. Schedule 5 sets out the titles, dates of commencement and the provisions of each State and Territory Fair Trading Act that equate to the provisions of the TPA from time to time. In dealing with the pleading summons, I have not heard submissions as to the availability of relief to the plaintiff pursuant to the Fair Trading legislation of States and Territories other than New South Wales. For present purposes I assume that it is open to her in these proceedings to advance such a claim. Upon this assumption I do not consider that the definitions in Notes (a), (b) and (c) to be embarrassing.

54 The defendants also objected to Note (i). This appears to largely repeat the effect of s 84(2) of the TPA dealing with conduct engaged in by or on behalf of a body corporate in proceedings brought pursuant to Pt IVA and Pt V of the TPA. I accept the defendants’ submission that Note (i) is embarrassing. The liability of any defendant for the acts of its directors, servants or agents will be determined by reference to the provisions of the TPA and the equivalent provisions of the FTA. Note (i) will be struck out.

55 The defendants contend that the statement of claim is redolent with vague, argumentative and rhetorical allegations pleaded at a level of generality that do not allow them to understand the case made against them. A substantial focus of this challenge was directed to paragraphs 2.3 – 2.6 which allege the Australian and the International conspiracy and the implementation of the latter in Australia. The conspiracy allegations were attacked for lack of precision and because, when read in conjunction with paragraph 2.31, which pleads that the defendants conspired to contravene the TPA, they are confusing.

56 Paragraph 2.3 is in these terms:

“During the relevant period, and particularly from January 1975, the Philip Morris companies, the Wills companies and the Rothmans companies conspired together to engage in conduct that was misleading or deceptive or likely to mislead or deceive in the manner set out in this statement of claim.

PARTICULARS

(a) In January 1975, a Co-ordinating Committee, comprising representatives of the first six defendants, was reactivated and a mutually acceptable set of objectives established, including:

(i) preserve an outward face of unanimity of approach to all problems and/or situations affecting the question of smoking and health;

(ii) agree on an overall industry policy and philosophy as a framework within which the co-ordinating committee will work;

(iii) accept the fact that smoking and health is an industry problem in the face of which the three companies must operate in complete concert.

Document

http://www. pmdocs.com./PDF/2025025461 5480.PDF refers

(b) Further particulars will be provided after discovery.


The defendants submit that paragraph 2.3 pleads a conclusion and not a material fact. The assertion that the defendants engaged in conduct that was misleading or deceptive or likely to mislead or deceive “in the manner set out in the statement of claim” is challenged as imprecise. Finally, the particulars are said to not support the allegation. The reactivation of a committee with a set of anodyne objectives of the character of those set out in subparagraphs (i) – (iii) is said to hardly be a particular of an allegation of a conspiracy to engage in misleading and deceptive conduct.

57 The plaintiff does not plead a cause of action in conspiracy at common law. Her cause of action is confined to claims brought under the TPA and/or the FTA equivalent provisions. As I understand Mr Francey’s submission, the material fact pleaded in paragraph 2.3 is the agreement of the Philip Morris, Wills and Rothmans defendants. The characterisation of the agreement as being, “to engage in conduct that was misleading or deceptive or likely to mislead or deceive in the manner set out in this statement of claim” is not well expressed. However, when read in the context of the statement of claim as a whole I consider that it is clear that the agreement alleged is an agreement to engage in the conduct that is described in paragraph 2.16, that conduct being alleged to have the quality of being misleading or deceptive, or likely to mislead or deceive, in the manner identified in paragraph 2.19. For the reasons earlier given the opening words, “During the relevant period and particularly” will be struck out, however, I do not propose to strike out the balance of the paragraph. The heading “The Australian Conspiracy” is unnecessary and has a tendency to cause prejudice and embarrassment and will be struck out.

58 I consider that the particulars of paragraph 2.3 are capable of supporting the allegation of the agreement upon which the plaintiff relies. It will be necessary for the plaintiff to deliver further and better particulars of this allegation in due course. The pleading of an internet address as a particular of the allegation in paragraph 2.3 was the subject of complaint. The mere recital of an internet address without more is embarrassing. As I understand Mr Francey’s submission the effect of the document is set out in (a)(i), (ii) and (iii).

59 Paragraph 2.4 pleads that between mid 1976 and late 1977 the companies represented by the defendants, and others, met and conspired to engage in conduct that was misleading or deceptive, or likely to mislead or deceive, amongst other things by procuring their subsidiary companies, including the first six defendants to engage in such conduct, including in Australia. The pleading does not make clear how it is said that the defendants bear any liability arising out of the acts of the overseas companies.

60 In the TCCI proceedings the applicants sued the respondents in their own right and as representing companies identified in a Schedule to their application. At [41] Wilcox J observed:

“The statement of claim appears to impute liability to the respondents for damage that resulted from actions of the companies they are said to represent. The statement of claim does not explain the basis from which that liability is said to arise.

...

[43] S 5 identifies ‘overseas companies’ said to be ‘represented by’ the respondent. The section goes on to set out, at considerable length, actions (mostly outside Australia) taken by the ‘overseas companies’. The pleading does not make clear what legal significance is attached to those actions. The statement of claim does not allege that any of the ‘overseas companies’ acted as agent for a respondent. Indeed, the contrary; para 5.60 to para 5.62 suggest that, by reason of control exercised over the respondents by ‘overseas companies’, the acts of the respondents were acts done on behalf of the ‘overseas companies’. It is not made clear how that circumstance imposes any liability on the respondents they would not otherwise have.”

61 The present pleading to my mind suffers from a like defect.

62 Paragraph 2.5 pleads the implementation of the international conspiracy in Australia. It is in these terms:

“After the formation of the international conspiracy as set out in paragraph 2.4 above, the Philip Morris companies, the Wills companies and the Rothmans companies continued and expanded their conspiracy as set out in paragraph 2.3 above, amongst other things, by engaging in the conduct referred to in this Statement of Claim.

PARTICULARS

(a) On 13 July 1977 Wills wrote to PML enclosing a paper discussed at the meeting referred to in the preceding paragraph and initiated dialogue in relation to its implementation.

Document

http://www.pmdocs.com/PDF/2024262639.PDF refers

(b) The Philip Morris companies, the Wills companies and the Rothmans companies caused the incorporation of the Tobacco Institute of Australia Limited (TIA or the TIA) on 5 December 1978.

(c) Further particulars are provided in 2.16 in schedules C and D to this statement of claim.

(d) Further particulars will be provided after discovery.

2.6 During the relevant period, and particularly from mid-1977 the Philip Morris companies, the Wills companies and the Rothmans companies carried on business (as set out in paragraph 2.1) in accordance with the objectives of, and by way of implementation of the internationals conspiracy.

PARTICULARS

See paragraphs 2.4 – 2.5”


63 Paragraph 2.5 is obscure. The conspiracy pleaded appears to be the same conspiracy as that pleaded in paragraph 2.3. The allegation that the first six defendants continued and expanded the conspiracy that they had earlier effected “by engaging in the conduct referred to in the statement of claim” is redundant. The particulars refer to the third defendant writing to the first defendant and enclosing a copy of a paper that is referred to in paragraph 2.4. This is not a proper basis for incorporating the embarrassing reference to the “international conspiracy” into paragraph 2.5. If the plaintiff is pleading a case that the agreement which she asserts in paragraph 2.3 was altered by some further fact or circumstance then it is necessary to plead that fact or circumstance or those facts and circumstances with greater precision.

64 Paragraph 2.6 is in these terms:

“During the relevant period, and particularly from mid 1977 the Philip Morris companies, the Wills companies, and the Rothmans companies carried on business (as set out in paragraph 2.1) in accordance with the objectives of, and by way of implementation of, the International Conspiracy.”

The objectives of the international conspiracy are not identified. No fact is pleaded as to how the manufacture and distribution of cigarettes (the defendants’ business as set out in paragraph 2.1) was by way of implementation of the International Conspiracy. It is not clear what, if any, allegation is made in paragraph 2.6.

65 I accept the defendants’ contentions with respect to paragraphs 2.4, 2.5 and 2.6. No facts are pleaded to explain the relevance of the International Conspiracy to the claim that the plaintiff makes against them. Each of these paragraphs has a tendency to cause prejudice, embarrassment and delay in the proceedings and will be struck out.

66 The defendants submit that the definition of “smoking related diseases” that is contained in paragraph 2.8 is embarrassing. It is said to be too wide given that it is the plaintiff’s case that she contracted emphysema. I do not accept this contention. The case that the plaintiff seeks to make is one considerably broader than that to which her own circumstances may give rise. The second basis of objection is that the definition is confusing since it includes the diseases that are set out in paragraph 2.8 (a)(i) to (iii) together with the diseases identified in Schedule “F”. The plaintiff identifies in Schedule “F” a number of publications on Smoking and Disease by title. While it may be thought cumbersome to have included in the definition of “smoking related diseases” those diseases referred to in Schedule “F” (but not specified in sub-paragraphs (i) to (iii)) rather than by setting them out in the body of paragraph 2.8, I consider that the pleading in this respect is adequate.

67 In paragraph 2.11 the plaintiff pleads, in the alternative, a case that the defendants had constructive knowledge of the matters set out in paragraphs 2.8 - 2.10 concerning the causal link between smoking cigarettes and disease and smoking and addiction.

68 In his written submissions Mr Francey sought to deal with the defendants’ objection to the pleading of constructive knowledge in this way:

“The allegation ‘ought to have known’, even if not relevant to a TPA s 52 claim, may be relevant to a TPA s 51AB claim.”

69 As I have noted, the plaintiff’s claim is reliant on s 75B of the TPA (and the FTA equivalent provision). In Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 the High Court considered the elements of accessorial liability under s 75B of the TPA. In that case it was alleged that the respondent’s liability in respect of contraventions of s 52 of the TPA arose pursuant to s 75B(a) and (c). It was held that to fall within (a) it was necessary to establish that the person intentionally aided, abetted, counselled or procured the contravention. In order to form the requisite intent the person must have knowledge of the essential matters which go to making the contravention. Equally, before a person may be liable to a contravention as a party to it, for the purposes of s 75B(c), it is necessary to establish that the person was an intentional participant. The necessary intent, again, is based upon knowledge of the essential elements of the contravention. Significant to the reasoning in the joint judgment in Yorke was the circumstance that, while s 75B is an adjunct to the imposition of civil liability, it is derived from concepts found in the criminal law. There was no indication that when introduced into the TPA these concepts should be given some new or special meaning. Their Honours referred to Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473 noting that, for the purposes of the criminal law, secondary participation in the commission of an offence requires intent based upon knowledge notwithstanding that the offence is one of strict liability.

70 Mr Francey submitted that Yorke was concerned with the accessorial liability of persons under s 75B(a) and (c). The case the plaintiff brings is one of conspiracy pursuant to s 75B (d). In oral submissions he postulated that a person who has entered into a conspiracy to engage in a false controversy over smoking and disease might not have actual knowledge of every act carried out in furtherance of the conspiracy by a co-conspirator and yet, nonetheless, remain liable in respect of the acts carried out in furtherance of the conspiracy. Accepting this submission for present purposes, it does not seem to me to answer the point that is taken. Paragraph 2.11 pleads constructive knowledge of the association between smoking and smoking related diseases or smoking and addiction (the matters pleaded in paragraphs 2.8 – 2.10). The agreement upon which the plaintiff relies is to engage in the conduct described in paragraph 2.16 being conduct that promoted the benefits and pleasures of smoking and denied or minimised the risks associated with it (including the risk of contracting smoking-related disease and of becoming addicted to smoking through the effect of nicotine). This conduct is alleged to have contravened the provisions of Pts IVA and V of the TPA because, inter alia, the defendants knew that there was reliable evidence causally linking cigarette smoking to increased the risk of contracting smoking-related disease and that nicotine was addictive. This is the false controversy to which Mr Francey referred. One cannot agree to promote a false controversy without knowledge of the matters that make it false. The pleading of constructive knowledge in paragraphs 2.11 and 2.12 is misconceived. The words in paragraph 2.11 “or one or more of them” and “(b) ought to have known” will be struck out. The words “or one or more of them” and “or ought to have known” wherever appearing in the particulars to paragraph 2.11 will be struck out. The words “or one or more of them” in paragraph 2.12 and paragraph 2.12(b) will be struck out as will the words “or one or more of them” and “or ought to have known” wherever appearing in the particulars to paragraph 2.12.

71 Paragraph 2.16 pleads:
“During the relevant period, in the course of the activities set out in paragraph 2.7 above, the defendants, or one or more of them, engaged in conduct promoting the benefits and pleasures of smoking and denying or minimising the risks associated with smoking (including the likelihood of contracting smoking-related disease and the risk of becoming addicted through the effect of nicotine), amongst other things for the purpose of inducing and/or encouraging consumers including the plaintiff and other persons to commence, continue and /or not cease or quit to smoke (“the defendants’ conduct”). That conduct comprised the following elements:”

There follow sub-paragraphs (A) to (F) setting out the allegations of the six elements of conduct on which the plaintiff relies which I have referred to in a summary way at [13] above.

72 The defendants challenge paragraph 2.16 on a number of grounds. One relates to the inclusion of the references to “other persons” to which I will return. Objection is also taken to the use of the expression, “the defendants, or one or more of them”. In written submissions the Wills defendants put it this way:

“On its face, paragraph 2.16 fails to distinguish between the different defendants. One possible interpretation of paragraph 2.16 is that it attributes to each defendant the conduct of all defendants without discriminating between defendants, or the alleged conduct for which it is alleged any individual defendant was responsible” (WS [95]).


As I understand the case that the plaintiff pleads it is that each defendant is liable for its own conduct and the conduct of each other defendant by reason of the agreement of each to contravene the provisions of Pts IVA and V of the TPA and the equivalent provisions of the FTA. Whether the plaintiff can establish a case of this breadth is not a matter with which I am concerned in dealing with the pleading summons. I do not consider that the reference in paragraph 2.16 to “the defendants, or one or more of them” to be embarrassing.

73 A further ground of challenge to paragraph 2.16 is that the conduct alleged is vague and that the allegation is not sufficiently supported by sub-paragraphs (A) to (F). I will deal with the sub-paragraphs individually, however, I am not persuaded that paragraph 2.16 is pleaded at such a level of generality that the defendants are not on notice of the case that the plaintiff seeks to make against them.

74 Paragraph 2.16(A) pleads that the defendants, or one or more of them, advertised, market and/or promoted the cigarettes representing that the cigarettes did and/or would enhance the life and enjoyment of life of consumers of the cigarettes. The particulars of this sub-paragraph are broadly expressed and refer generically to advertisements, marketing and promotion of the cigarettes in, on, at or through television, cinemas, magazines, newspapers, radio broadcasts, billboards, hoardings at sporting events, motor vehicles and uniforms at sports events, merchandise, retail points of sale, sponsorship of sporting and cultural events and venue promotions.

75 Paragraph 2.16(B) pleads the conduct in advertising, marketing and promoting brands of cigarettes described as “menthol, mild, light or low tar”.

76 In their written submission the Wills defendants contend that that the words “enhances the life and enjoyment of life of consumers” are unacceptably vague. The particulars are said to be inadequate in that they do not serve to inform the defendants of what was represented, when, where, and to whom (Wills WS 105). It seems to me that the words “enhances the life and enjoyment of life of consumers” are sufficiently clear. I accept Mr Francey’s submission that having regard to the nature of the case that the plaintiff seeks to make that the pleading is not deficient in failing, for example, to identify every single television advertisement in which it is said that a defendant represented cigarette smoking as enhancing the life and enjoyment of life of the smoker. In a case such as this an order for further particulars may be made after discovery. I decline to strike out sub-paragraphs 2.16(A) and (B).

77 Paragraph 2.16(C) pleads conduct relating to public statements and other activities. The defendants object that the plaintiff does not identify the occasions on which the statements were made, to whom they were made and the content of them. The plaintiff pleads the effect of the public statements in subparagraphs (a) to (h). Particulars of this element of the conduct on which she relies are contained in Schedule “C”. Schedule “C” refers in a summary way to a number of statements made in the media that are attributed to officers of the defendants over a period from 1962 to 1997. A number of them are statements made prior to January 1975 which for the reasons earlier given will be struck out. The plaintiff pleads that further particulars will be supplied after discovery.

78 Paragraph 2.16(C)(b) pleads the making, and or causing to be made, of public statements to the following effect:

“(b) casting public doubt on the quality, conclusiveness or relevance of the evidence or reports linking cigarette smoking to any adverse health effects and in particular to smoking related disease, including for the express purpose of weakening the belief in this evidence of smokers and persons contemplating smoking and/or contemplating to quit and/or cease smoking.”

I accept the defendants’ submission that this sub-paragraph is unacceptably vague. Paragraph 2.16(C)(b) will be struck out.

79 In other respects I consider that sub-paragraphs 2.16(C)(a), (c), (d), (e) and (f) serve to adequately put the defendants on notice of the character of the public statements that the plaintiff relies on as conduct denying or minimising the risks associated with smoking (including the likelihood of contracting smoking-related disease and the risk of becoming addicted through the effect of nicotine). Further particulars may be ordered in due course.

80 Paragraph 2.16(C) sets out in sub-paragraphs (i) to (o) activities of a kind that the defendants are said to have engaged in “directly or indirectly”. A number of objections are advanced to this part of the pleading. Firstly it is submitted that the inclusion of the word “indirectly” is embarrassing because the pleading does not explain what constitutes “indirect activity”. Mr Francey in written submissions in reply said:

“The word “indirectly” is intended to encompass the Defendants engaging in activities through other persons or entities eg the TIA”. (Response to Revised Schedule to Wills Submissions at [124]).

To my mind this serves to illustrate the force of the defendants’ complaint. No facts are pleaded to put the defendants on notice of activities engaged in by TIA or other entities for which it is contended that they are liable. TIA is referred to in particulars in paragraph 2.5(b) and 2.33(b) but this does not relieve the plaintiff of the obligation to plead the facts on which she relies in support of any case that the defendants engaged in a given activity by causing TIA or some other entity to do something or to refrain from doing something.

81 The defendants also complain about the inclusion in paragraph 2.16(C) of the words “of the following kind”. They submit that conduct upon which the plaintiff relies should be identified. I accept that is so. The words “directly or indirectly” and “of the following kind” in paragraph 2.16(C) will be struck out.

82 The defendants complain of the lack of particularisation in paragraphs 2.16(C)(i) to (o). In this respect they point to sub-paragraph (i) which does not identify the scientists or the medical practitioners referred to. In their written submissions the Philip Morris defendants contend that the activity of causing research to be undertaken cannot of itself be misleading. In their submission the relevance of the assertion should be explained. The plaintiff pleads the conduct in paragraph 2.16(C)(i) and seeks to explain its relevance to her claim in paragraph 2.19(C)(i) where she pleads that the conduct was designed to mislead the public about the health effects of tobacco smoke and its constituents. I consider that paragraph 2.16(C)(i) is sufficient to put the defendants on notice of the case that is made with respect to this allegation. The plaintiff may be required to provide further particulars in due course.

83 In their written submissions the Wills defendants complain that the description of each of the activities pleaded in paragraph 2.16(C)(i) to (o) is embarrassing in that they are not able to discern with sufficient particularity what the alleged conduct is said to be. I consider that objection to be well made with respect to the activity pleaded in sub-paragraphs (j) – (o). Paragraph 2.16(C)(j) pleads the activity of:

“calling into question the integrity of scientists investigating the effects of smoking, and of health and medical groups working to reduce the harmful effects of smoking.”

The concept of “calling integrity into question” is unacceptably vague. Paragraph 2.16(C)(j) will be struck out.

84 Paragraph 2.16(C)(k) is pleaded in these terms:

“undertaking modifications to the design of cigarettes, including the “less hazardous” cigarettes, that materially affected the propensity of cigarette smoking to cause adverse health effects or to increase and maintain addiction, without disclosure to consumers, government or health experts.”

It is to be noted that paragraph 2.19(C)(k) merely repeats this assertion. The respect in which the conduct is said to be misleading or deceptive is not further explained. The defendants complain that the modifications to the design of cigarettes are not identified nor does the plaintiff allege how the conduct is said to have been misleading or deceptive. These complaints have substance. The allegation is unclear. The words “materially affected the propensity of cigarette smoking to cause adverse health effects” are imprecise. The significance of the non-disclosure to “government or health experts” is not explained. It may be that stripped of the vague assertions and the references to government and unidentified health experts the paragraph contains an allegation that the defendants, or one or more of them, modified the design of cigarettes, including the “less hazardous cigarettes” to increase the capacity of the cigarette to cause the consumer to be addicted to it without disclosure to the consumer of that fact. This is how I understood Mr Francey to support it. However, it requires considerable refinement to make an intelligible allegation to which the defendants can plead. Paragraph 2.16(C)(k) will be struck out.

85 Paragraph 2.16(C)(l) pleads as an activity “rejecting or ignoring the need to provide adequate consumer information”. I accept the defendants’ submission that this sub-paragraph is embarrassing. Neither the basis for the need nor the content of “adequate consumer information” is adequately identified. Paragraph 2.16(C)(l) will be struck out.

86 Paragraph 2.16(C)(m) pleads the activity of advertising, promoting and/or marketing of cigarettes to persons under the age of 18 or “such other relevant legal age limit” and/or failing to take adequate steps to ensure that in advertising, promoting, and/or marketing the cigarettes to persons over that age they did not also advertise, promote and/or market to persons under that age “despite the representation and/or representations set out above”.

87 Paragraph 2.16(C)(n) pleads a like allegation to that contained in (m) with respect to the advertising, promotion and/or marketing of cigarettes to non-smokers. The defendants complain that the representation or representations referred to in sub-paragraphs (m) and (n) is, or are, not specified. The plaintiff submits that it is apparent from reading paragraph 2.16(C) as a whole that the reference is to the representation or representations contained in sub-paragraphs (a) to (h). Even if that be accepted, the purpose of the inclusion of the references to the representations that are pleaded in sub-paragraphs (a) – (h) is not clear in either case.

88 The plaintiff pleads a case that by advertising, marketing and promoting cigarettes representing that cigarettes enhance the life and enjoyment of life of the consumer the defendants engaged in conduct is misleading or deceptive, or likely to mislead or deceive (2.16(A) and 2.19(A)). To the extent that she seeks to plead some additional matter by reference to the activity of advertising, promoting and/or marketing the cigarettes to young persons and non-smokers, I take the allegation to be that the defendants failed to take “any adequate steps” to ensure that in advertising, promoting and marketing cigarettes to existing smokers they did not also advertise, promote and market cigarettes to young persons and to non-smokers. What might constitute adequate steps to ensure that a cigarette advertisement did not operate on the mind of a non-smoker? Sub-paragraphs (m) and (n) are both unclear. In each instance the assertion of the failure to take “any adequate steps” does not identify what it is that the plaintiff alleges the defendants failed to do. Nor is it clear how it is contended that the activity alleged is misleading or deceptive other than in the respects pleaded in paragraphs 2.16(A) and 2.19(A). Sub-paragraphs (m) and (n) will be struck out.

89 Paragraph 2.16(C)(o) pleads the following as an activity in which the defendants, or one or more of them, are said to have engaged:

“not genuinely and conscientiously investigating the likelihood of contracting smoking-related disease and/or suppressing or distorting the investigation of that likelihood, despite the representations or assurances set out above.”

The defendants object that the description of the activity in sub-paragraph (o) is embarrassing. I agree. It is not possible to determine what conduct the plaintiff alleges. Paragraph 2.16(C)(o) will be struck out.

90 Paragraph 2.16(D) pleads conduct involving lobbying the governments of the States and Territories against what are described as tobacco control measures. For present purposes I assume the allegations of political lobbying to be justiciable.

91 The defendants challenge the pleading of engaging in conduct “directly or indirectly” without identifying what constitutes indirect conduct. The plaintiff responds to this objection with the same response as that set out at [80] above. I propose to strike out the words “directly or indirectly” for the same reasons as those given at [80] above. The defendants object to the reference to “conduct involving lobbying” on the basis that it suggests that the plaintiff’s allegation may extend to something in addition to lobbying. For similar reasons they object to the words “including making recommendations or representations to”. The reference to “the various States and Territories of Australia and the Commonwealth Government” is challenged as embarrassing for its lack of precision. The plaintiff submits that no conduct is relied upon in addition to the conduct of “lobbying or causing to be lobbied” and “making recommendations or representations”. She says that the allegation is one intended to refer to the governments of each State and Territory of Australia. I propose to address the objections made to paragraph 2.16(D) by striking out the words “conduct involving”, “including”, and “various”.

92 In addition to the criticisms set out above, in written submissions the Philip Morris defendants complain of the lack of particulars of the lobbying and of the “knowledge” that “actions” are “effective” pleaded in paragraph 2.16(D). They note that the pleading does not allege who had the knowledge. It is not clear what the words “known to be effective” add to the assertion of actions “likely to be effective”. Any action known to be effective presumably must satisfy the less demanding test of being likely to be effective. The words “known to be effective” will be struck out.

93 Generally it is contended by the defendants that the particulars given of the allegation in paragraph 2.16(D) are inadequate. I consider that this complaint can be addressed by the supply of further and better particulars in due course.

94 The plaintiff claims in paragraph 2.16(E) that the defendants remained silent about the knowledge referred to in paragraphs 2.11 and 2.12. Paragraph 2.11 in turn refers to the knowledge of matters set out in paragraphs 2.8 and 2.10. These refer to knowledge of the alleged causal link between smoking and specified diseases and smoking and addiction to nicotine. Paragraph 2.12 also deals with the defendants’ knowledge of the alleged causal link between smoking cigarettes and smoking related disease or the increased likelihood of contracting smoking related disease. Particulars of paragraphs 2.11 and 2.12 refer to the defendants’ knowledge or constructive knowledge of studies said to be in the public domain. The plaintiff pleads a case that includes an allegation that the defendants, or one or more of them, remained silent about matters of which they ought to have had knowledge, those matters being in the public domain. I have already dealt with the question of constructive knowledge. I now turn to the defendants’ submission that for silence to amount to conduct that is misleading or deceptive it must be deliberate.

95 The defendants referred me to the judgment of Finkelstein J in Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd [1998] FCA 693; (1997) 155 ALR 714 at 722:

“It is clear that a failure to provide information can be conduct which is misleading or deceptive. For the purposes of s 52(1) ‘engaging in conduct’ is defined in s 4(2)(a) as a reference to doing or refusing to do any act and by s 4(2)(c) a reference to refraining (otherwise than inadvertently) from doing that act.

However, when the complaint is that s 52(1) has been infringed by conduct that involves either refusing or refraining from doing an act before that conduct is actionable it must have been deliberately engaged in. Bowen CJ in Rhone - Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 77 said this followed from the use of the words ‘refuse’ and ‘refrain’ in s 4(2). This conclusion is reinforced by the fact that by s 4(2)(c) conduct includes the refraining from doing an act provided it is ‘otherwise than inadvertently’: see also Edgar v Farrow Mortgage Services Pty Ltd (in liq) (1992) ATPR 46-096 at 53,375; Zaknic Pty Ltd v Svelte Corp Pty Ltd (1996) ATPR 46-159 at 53,362; Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31 at 42; Diversified Mineral Resources NL v CRA Exploration Pty Ltd [1995] FCA 1049; (1995) ATPR 41-381 at 40,284.

Accordingly, to determine whether Berrigan has contravened s 52(1), which must be established before it can be said that Mr Kocks has been involved in a contravention of the Act, two questions arise for consideration. The first is whether the failure by Berrigan to inform Costa Vraca that it had used 2,4-D ester in its spraying rig was misleading or deceptive conduct. The second question is whether that conduct was deliberate.”

96 In his written submissions Mr Francey sought to deal with the challenge to the pleading of silence in paragraph 2.16(E) in this way:

“The plaintiff does not accept that conduct by silence must be deliberate; it is sufficient that the circumstances give rise to a reasonable expectation that if some relevant fact exists it would be disclosed. In any event, in circumstances in which the defendants knew or ought to have known of the matters set out and particularised in SOC 2.11-2.12, combined with the nature of the Australian Conspiracy and International Conspiracy, as set out and particularised in SOC 2.3 – 2.6, the conclusion is inescapable that the defendants intentionally concealed the knowledge in SOC 2.11 and 2.12.” (WS 3.57)

97 This submission does not assist in clarifying how the plaintiff supports the pleading of “remaining silent”. The defendants’ contend that “remaining silent” is susceptible of being an allegation of an inadvertent failure to disclose. It seems to me to be an ambiguous formulation. To the extent that the pleading of “remaining silent” in paragraph 2.16(E) is an assertion of deliberate conduct, as distinct from an inadvertent failure to disclose, it adds nothing to the pleading of intentional concealment. As I read Mr Francey’s submission this is the plaintiff’s case. I do not accept that an inadvertent silence is capable of amounting to misleading or deceptive conduct for the purposes of s 52 of the TPA. To the extent that the plaintiff’s claim is brought pursuant to s 52 the inclusion of the words “remained silent” are either redundant or irrelevant. Mr Francey did not submit that inadvertent silence is relevant to the alternative case that the plaintiff makes based upon the prohibition of unconscionable conduct under the TPA and the FTA equivalent provisions. No facts are pleaded to support such a case. In paragraph 2.16(E) the words “remained silent about and/ or” shall be struck out.

98 Paragraph 2.16(F) is pleaded in these terms:

“The Defendants, or one or more of them, took steps to maximise the effect of the conduct pleaded in paragraphs 2.16(A) to 2.16(E) and to maximise the opportunities and occasions on which, and the likelihood that, persons including the plaintiff and other persons, including persons under the age of 18 years, would be induced or persuaded to commence and/or to continue and/or to recommence and/or not to cease or quit, to smoke the cigarettes.

PARTICULARS

(a) Arranging the placement of cigarette vending machines in order to, amongst other things, make cigarettes more readily available to young people;

(b) Arranging the handing out of free and/or sample cigarettes at hotels, shopping centres, shopping malls, sporting, events and private functions;

(c) Advertising and/or promoting the use of the cigarettes as frequently and pervasively as possible, including by way of sponsorship and promotion of sporting events, sporting organisations, cultural events, cultural organisations and other activities associated with a healthy lifestyle and/or sophistication.

(d) Further particulars will be Provided following discovery.


99 In written submissions the Philip Morris defendants complained that paragraph 2.16(F) is obscure. In their submission the conduct particularised is not obviously misleading. This left unclear the precise allegation that is made against them. They submit that they are not able to plead to it. I consider that there is substance to this complaint. The plaintiff elsewhere alleges conduct by way of advertising and/or promoting cigarettes and particularises sponsorship and promotion of sporting and cultural events. To the extent that the plaintiff alleges that the defendants engaged in conduct to maximise the opportunities and occasions on which, and the likelihood that, persons including persons under 18 years would smoke by advertising cigarettes frequently and pervasively is an allegation of some conduct other than that pleaded in paragraph 2.16(A) the allegation is not clear. Equally the relevance of the arrangement of cigarette vending machines to the allegation of conduct is not clear. Paragraph 2.16(F) will be struck out.

100 Paragraph 2.17 is pleaded in these terms:

“Persons, including the plaintiff and other persons, were influenced by the defendants’ conduct:

(a) Directly in that they:

(i) saw and/or

(ii) heard and/or

(iii) were aware of

the defendants’ conduct; and/or

(b) indirectly, in that they were influenced by others who saw and/or heard and/or were aware of the defendants’ conduct and/or were influenced by others who were so influenced (“the influence of the defendants’ conduct”).”

101 The defendants submit that the inclusion of paragraph 2.17 illustrates that the present pleading does not deal with the criticism that Sackville J made of the Nixon pleading at paragraph [158] which I have extracted at paragraph [44] above.

102 Paragraph 2.17 is an allegation of very great breadth. I am conscious of the force of Sackville J’s observation concerning the like allegation in the Nixon claim. The Nixon proceedings were a group proceeding and his Honour’s comments were addressed to the question of the ability to particularise the case made by each group member in support of the claim for relief advanced on behalf of group members. These proceedings are not representative proceedings brought on behalf of the plaintiff and other persons. As I understand the way the plaintiff puts her case the references to “other persons” are intended to address the circumstance that her claim invites consideration of the alleged effect of the defendants’ contravening conduct on consumers of cigarettes in Australia (and on potential consumers of cigarettes in Australia). In Mr Francey’s submission the absence of any means of identifying the “other persons” would not prevent the plaintiff leading epidemiological or sample evidence of the harm caused to consumers of cigarettes by smoking related disease.

103 Mr Francey relied in support of this latter submission on passages in the judgment of Wilcox J in TCCI. His Honour there gave consideration to the strength of the case that the applicants pleaded in the context of the respondents’ application for security for costs. At paragraph [77] his Honour observed:

“For present purposes, I am prepared to assume that epidemiological evidence would enable TCCI to establish that many (if not most) of the people described in Schedule B to the draft Amended Application (or its later revision) are likely eventually to exhibit symptoms of one or more of the “smoking related diseases” identified in the statement of claim and that, in a significant proportion of cases, they are likely to succumb to a smoking related disease.”

104 It is the plaintiff’s contention that the power conferred on the Court by the TPA and the equivalent provisions of the FTA is of sufficient breadth to allow of the making of orders of the nature of those contemplated in paragraphs 3.9, 3.11 and 3.12. This is controversial. The defendants invited me to deal with their objections to the pleading without embarking on a consideration of the issues raised by the relief that the plaintiff seeks. I approach the matter for present purposes upon an acceptance that the Court has the power to make broad remedial orders of the sort that are contemplated in Part 3 of the statement of claim. In the absence of hearing submissions from the parties, I am prepared to accept that it may be possible for the plaintiff to lead evidence of an epidemiological or sample nature on the question of the extent of the harm occasioned to consumers of cigarettes in Australia as the result of smoking related disease. I consider it premature to strike out the references to “other persons” without hearing the parties on the question of the power of the Court to grant certain of the relief that is sought.

105 Paragraph 2.19 of the statement of claim pleads by reference to the conduct alleged in paragraph 2.16 that “in so far as such conduct constituted a representation as to a future matter the plaintiff relies on s 51A of the TPA or the equivalent provision of the FTA.” Section 51A(2) of the TPA provides, in relation to representations made by a corporation with respect to any future matter, that the corporation shall be deemed not to have had reasonable grounds for making the representation unless it adduces evidence to the contrary.

106 The pleading does not identify what features of the conduct particularised in the five elements set out in 2.16(A) to (E) involve representations as to a future matter or matters. Mr Francey submits that it is not necessary for the plaintiff to do so. It is his contention that it is sufficient to make clear in the statement of claim that the provisions of s 51A are to be relied upon. The identification of the representations as to future matters may be done by way of particulars in due course. In this way it is submitted the defendants will be put on notice of those matters in respect of which it is incumbent upon them to adduce evidence to the contrary if they seek to avoid the operation of the deeming provision.

107 In his written submissions Mr Francey relied upon the decision of French J in State of Western Australia v Bond Corporation Holdings Ltd & Ors [1990] FCA 522; (1991) ATPR 41-081 at 52,279:

“In my opinion a party invoking the application of s 51A to a representation as to a future matter should make clear that is (sic: it is) doing so in that way the respondent will know that, if the representation was made, it has the burden of showing, and must plead, that it had reasonable grounds for making it. The duty of the applicant to make clear that it invokes s 51A is discharged if it pleads that the respondent did not have reasonable grounds for making the representation and that it was thereby misleading or deceptive. Alternatively, the applicant can plead the representation and say simply that it was misleading by virtue of s 51A. This approach is probably logically more consistent with the structure of the section.”

108 I do not read the judgment in State of Western Australia v Bond as support for Mr Francey’s contention that the present pleading is adequate with respect representations as to future matters. The representations the subject of the invocation of s 51A are not identified. The defendants are not on notice of the case made against them with respect to representations as to future matters. The balance of paragraph 2.19 after the words “or the FTA” will be struck out.

109 The defendants also complain that the plaintiff should be required to identify the provisions of the FTA on which she relies in paragraph 2.19. Assuming for present purposes that it is open to the plaintiff to plead the provisions of State and Territory Fair Trading legislation in addition to the Fair Trading Act 1987 (NSW), I consider the pleading is adequate. Schedule 5 identifies the equivalent provisions of the State and Territory Fair Trading legislation.

110 Each of paragraphs 2.19(A) to (F) commences with the word “specifically”. In written submissions the Philip Morris defendants queried the significance of the incorporation of this modifier. It adds nothing to the balance of the paragraph. It is embarrassing and will be struck out wherever occurring in paragraphs 2.19(A) to (F).

111 The defendants complain generally that paragraphs 2.19(A) to (F) fail to identify the representation or representations relied upon. With respect to the conduct pleaded in paragraphs 2.16(A) to (E) that I have declined to strike out I reject the contention that the corresponding paragraphs in 2.19(A) to (E) should be struck out for lack of identification of the representation or representations relied upon. I consider that the pleading is adequate. The concern that the defendants express may be addressed by the supply of further and better particulars in due course.

112 The defendants also object to the words “by reason of the matters pleaded herein” as embarrassing in each of paragraphs 2.19(A) to (E). The Wills defendants observe that the statement of claim is 106 pages long and that it refers to conduct taking place over 40 years. In these circumstances they submit that it is necessary for the plaintiff to identify the matters to which she refers with greater precision. The plaintiff responds by submitting that a fair reading of the statement of claim, paying particular regard to Section “F” Smoking and Disease and Section “G” Smoking and Addiction adequately informs the defendants of the matters to which she refers. While it would have been preferable for the plaintiff to plead in paragraph 2.19(A) “by reason of the matters pleaded in Section “F” Smoking and Disease and Section “G” Smoking and Addiction herein”, I consider that the meaning is sufficiently clear.

113 A number of the paragraphs in 2.19(C) to (F) depend upon allegations of conduct pleaded in paragraph 2.16(C) to (F) which I have directed be struck out. For the same reasons paragraphs 2.19(C)(b), (j), (k), (l), (m), (n) and (o) and 2.19(F) will be struck out.

114 Paragraph 2.19(E) pleads that the defendants were under a duty or obligation to disclose the knowledge referred to in paragraphs 2.11 and 2.12 and that they should not have remained silent about and /or concealed the knowledge referred to in those paragraphs. I have struck out the reference to remaining silent in paragraph 2.16(E). For the same reason the words “remained silent about and/or” will be struck out of paragraph 2.19(E). The defendants complain that no facts are pleaded to support the asserted duty or obligation to disclose. It seems to me that the facts pleaded as giving rise to the asserted duty or obligation are the “matters pleaded herein” which direct attention to paragraphs 2.8, 2.9 and 2.10 and that the matter concerns public health. Whether these facts, if established, give rise to a duty or obligation to disclose the knowledge referred to in paragraphs 2.11 and 2.12 is not a matter to which submissions were directed in support of the present application.

115 The plaintiff pleads in paragraph 2.20 an alternative case in unconscionability. The defendants submit that the inclusion of the words “in all the circumstances” in paragraph 2.20 is embarrassing. In the particulars the plaintiff pleads that the circumstances referred to “include” those set out in paragraphs 1.1 to 2.19. Additional circumstances are particularised in paragraph 2.20(b) namely that the defendants engaged in such conduct in disregard of, or with inadequate regard for, persons suffering under a disadvantage and/or disability including; persons under the age of 18 years, indigenous persons, persons who are deaf, blind and/or illiterate, and/or persons who have English as a second language. The defendants contend that the relevance of the matters pleaded in (b) is not made clear. In this respect the defendants note that the plaintiff does not plead that she suffers one or more of the identified disabilities. Assuming for present purposes that it is open to the plaintiff to plead a case of unconscionable conduct that does not depend upon her relationship with the defendants, the objection remains that the particulars set out in 2.20(b) allege matters that do not appear to be particulars of any fact pleaded in paragraphs 1 to 2.19 of the statement of claim.

116 In oral submissions and in his response to the revised Schedule to the Wills submissions (at [192 – 198]) Mr Francey contended that the pleading of an alternative case of unconscionable conduct does not assert any conduct other than the conduct that the plaintiff relies on as being misleading or deceptive. This makes the significance of the further circumstances identified in the particulars in paragraph 2.20(b) quite unclear. Paragraph 2.20 does not plead any fact that makes the inclusion of this particular relevant. Particular (b) of paragraph 2.20 will be struck out. I will strike out the word “include” in particular (a).

117 Section “O” of the statement of claim is titled Effect of the Contravening Conduct. It is to be observed that the despite the inclusion of some definitions in the Note at the beginning of the document, the expression the “contravening conduct” is not defined other than to limit it to conduct occurring within Australia. The defendants complain, with some justification, of the failure to use consistent terms when dealing with the conduct upon which the plaintiff relies. In paragraph 2.16 the conduct (promoting the benefits of smoking and denying or minimising the risks associated with it) is defined as “the defendants’ conduct”. In written submissions Mr Francey says that “the contravening conduct” is a reference to “the conduct constituting a contravention of the prohibitions of misleading or deceptive or unconscionable conduct”. In paragraph 2.20 the plaintiff eschews the use of either formulation and pleads that “the conduct referred to in paragraph 2.16 and 2.19 constituted conduct” that was unconscionable within the meaning of the TPA. As I understand the pleading, paragraph 2.19 picks up the conduct referred to in paragraph 2.16 and sets out the respects in which that conduct is said to have been misleading or deceptive. The inconsistent references to “conduct” serve to make a lengthy pleading somewhat confusing. However, I reject this objection to paragraph 2.21. I consider that it is sufficiently clear that the reference to the contravening conduct is a reference to the conduct that is identified in paragraph 2.16, being conduct that was misleading or deceptive or unconscionable by reason of the matters pleaded in paragraphs 2.19 and 2.20.

118 Objection is taken to paragraph 2.22. The defendants contend that the references to “members of the general public” and “members of parliaments and governments” are embarrassing in that it is not clear who the relevant “members” are. As I understand paragraph 2.22(a) the plaintiff pleads that persons answering the description of being a member of the general public had an inaccurate or distorted belief, impression or understanding of the matters set out in subparagraphs (i) – (v). In their written submissions the Philip Morris defendants contend that at “as a practical matter, the belief of ‘members of the general public’ and of ‘other persons’ are unlikely ever to be able to be proved. They ask how can it ever be proved that such beliefs (if they were held) were caused by some part of the conduct, or the influence of the conduct, that the plaintiff pleads?

119 Generally, the defendants complain that paragraph 2.22 is pleaded at a high level of generality such that they are not able to test the assertions that are made. As far as the allegations in paragraph 2.22(b) are concerned, the defendants point to the very large number of persons falling within the class of being members of parliament and governments in various States and Territories and the Commonwealth over the period of the conduct alleged. In written submissions the Philip Morris defendants contended that proof of the belief of members of parliament for the purposes of paragraph 2.22(b) was a practical impossibility. I am not disposed to strike out paragraph 2.22 upon the basis that it is most unlikely that the plaintiff will be able to prove the matters that she pleads.

120 Paragraph 2.23 pleads further effects of the “contravening conduct” in sub-paragraphs (a) – (g). A number of objections are taken by the defendants to each of these sub-paragraphs contending that they are embarrassing in their failure to identify with greater particularity matters such as the “restrictions” and the “lobbying” referred to in sub-paragraph (a), the “requirements” and the “lobbying” for the purposes of sub-paragraph (b) and so forth. In written submissions the Philip Morris defendants observed:

“The substance of paragraph 2.23 is to invite the Court to evaluate the effectiveness and likely effect of (unidentified) restrictions, requirements, advertising campaigns and programs if they had been implemented at an earlier time upon a finding that they would so have been implemented at an earlier time if certain other events had not occurred. The exercise is practically impossible and speculative based, as it must be, upon theories and predictions.”

121 While I acknowledge the force of the above observation, I consider it premature to strike out the whole of paragraph 2.23. It will be necessary for the plaintiff to provide further and better particulars of the allegations that she makes in sub-paragraphs (a), (b), (c) and (g). In sub-paragraphs (d), (e) and (f) the plaintiff pleads that as a result of the contravening conduct:

“(d) Tobacco control programs have been substantially less comprehensive than required for optimal effectiveness;

(e) the cost-effectiveness of tobacco control programs has been reduced;

(f) the expenditure on tobacco control has declined relative to expenditure on other drug problems”.

122 These three subparagraphs introduce concepts so vaguely defined as to be practically without meaning. What the plaintiff means by “tobacco control programs” is not clear and, even if this could be ascertained, the pleading that such programs have been “substantially less comprehensive” than is required for “optimal effectiveness” is unacceptably vague. Each of paragraph 2.23(d), (e) and (f) will be struck out.

123 Section Q of the statement of claim is titled “Involvement in the Contravening Conduct”. It is appropriate to set out the terms of Paragraphs 2.26 – 2.30 that plead the defendants accessorial liability in a number of ways:

“2.26 Further, or in the alternative:

(a) the defendants, or one or more of them, knew or ought to have known that the other defendants were engaged in the conduct;

(b) the defendants, or one or more of them, knew or ought to have known that the conduct of the other defendants was unconscionable, misleading or deceptive, or likely to mislead or deceive in the manner alleged above;

(c) the defendants, or one or more them, knew or ought to have known that its own conduct, aided and/or abetted and/or would aid and/or abet, and such conduct did in fact aid and/or abet, the conduct of the other defendants referred to in paragraph 2.16.

2.27 By reason of the matters pleaded herein, and by reason of the matters pleaded in the preceding paragraph, the defendants, or one or more of them, aided and/or abetted the TPA contravention and/or contraventions of one or other or more than one or other of the defendants.

2.28 Further, in the alternative, by reason of the matters pleaded herein, the defendants, or one or more of them, counselled and/or procured the TPA contravention and/or contraventions by one or other or more than one or other of the defendants.

2.29 Further, or in the alternative, by reason of the matters pleaded herein, the defendants or one or more of them, induced the TPA contravention and/or contraventions by one or other or more than one or other of the defendants.

2.30 Further, or in the alternative, by reason of the matters pleaded herein, the defendants, or one or more of them, were and/or was directly or indirectly, knowingly concerned in, or party to the TPA contravention and/or contraventions by one or other or more than one or other of the defendants.”


124 In these paragraphs the plaintiff baldly asserts liability as against each defendant for the conduct of the other defendants by reciting the terms of s 75B(1)(a) – (c) of the TPA. No material facts are pleaded in support of the allegations. The allegations are preceded by the assertion in paragraph 2.26 of liability upon the basis of constructive knowledge. For the reasons earlier given, the assertions of constructive knowledge are misconceived.

125 The references to “the defendants, or one or more of them” in paragraphs 2.26 – 2.33 are embarrassing. It is not clear whether the reference is a reference to each of the defendants or to any of them or a combination of them.

126 Paragraph 2.26 is attended by other difficulties. In sub-paragraph (c) reference is made to the defendants knowledge “that its own conduct aided and/or abetted” the conduct of the other defendants referred to in paragraph 2.16. No facts are pleaded that identify the conduct of individual defendants. It is not clear what the reference to “its own conduct” in paragraph 2.26(c) refers to.

127 In order to be liable under s 75B(a) of the TPA as an aider and abettor or counsellor or procurer it is necessary to establish intentional participation in the contravention of the Act: Yorke at 667. To my mind paragraph 2.26(c) does not overcome the difficulty that Sackville J addressed in Nixon at [152] – [154]. It is not sufficient to plead the conclusion that the defendant, or one or more of them, knew that its own conduct, either aided and/or abetted or would aid and/or abet and that it did so. It is necessary for a fact or facts to be pleaded that identify some act or acts on the part of a defendant said to constitute participation in the contravention of the Act by another defendant or other defendants.

128 Paragraph 2.28 asserts that the defendants, or one or more of them, counselled and/or procured the TPA contravention and/or contraventions by one or other or more than one or other of the defendants. Again, no material facts are pleaded in support of this assertion.

129 No material facts are pleaded in support of the allegations in paragraph 2.29 or paragraph 2.30 of inducing the undefined TPA contravention and/or contraventions or of knowing involvement in the undefined TPA contravention and/or contraventions.

130 In paragraph 2.31 the plaintiff pleads that the defendants, or one or more of them, conspired with one or other or more than one or other of the defendants to effect “the TPA contravention and/or contraventions by one or other or more than one or other or more than one or other of the defendants.” In paragraph 2.32 the plaintiff pleads that in furtherance of the conspiracy alleged in paragraph 2.31 the defendants, or one or more of them, did certain overt acts. The overt acts relevantly include the conduct set out in paragraph 2.3, 2.4 and 2.5 and the conduct in paragraph 2.16.

131 The defendants contend that the pleading is confusing in that the relationship between the conspiracy allegations made in paragraphs 2.3, 2.4 and 2.5 to that alleged in 2.31 is not clear. I agree. The plaintiff’s case, as Mr Francey explained it in the course of oral submissions, at least with respect to the first six defendants, is that each is liable for the conduct described in paragraph 2.16 by reason of the agreement pleaded in paragraph 2.3. In paragraph 2.31 the plaintiff pleads that “the defendants, or one or more of them conspired with one or other or more than one or other of the defendants”. This is an embarrassing pleading. No facts are pleaded to enable each defendant to know whether it is put against it that it conspired with any other defendant or defendants. In paragraph 2.32(a) the international conspiracy pleaded in 2.4 is identified as an overt act of the conspiracy alleged in paragraph 2.31. As I have earlier indicated, no basis is identified for attributing liability to the defendants for the acts of the overseas companies.

132 Paragraph 2.33 includes the embarrassing formulation “the defendants or one or more of them”. It does not plead any material facts but rather a rolled up conclusion. To the extent that it seeks to attribute liability to the defendants pursuant to s 75B of the TPA it alleges conduct from 1 October 1974, some two years and nine months prior to the date on which the section came into operation.

133 Paragraphs 2.26 to 2.33 will be struck out.

134 Part 3 of the statement of claim is titled, Relief. It contains a number of preliminary allegations in paragraphs 3.1 to 3.7. These are rhetorical, argumentative assertions that have a tendency to cause prejudice, embarrassment and delay in the proceedings. They will be struck out.

135 It was the defendants’ submission that the statement of claim was as a whole so hopeless that it should be struck out in its entirety. They sought to be heard on the question of whether leave to deliver a further amended statement of claim should be given. I do not consider the statement of claim to be so manifestly untenable as to make it an appropriate exercise of discretion to strike it out as a whole. Attached to these reasons is a Schedule setting-out the parts of the statement of claim that I will order be struck out. The effect of that order will be to leave the pleading in a state in which it requires amendment at least in order to define with greater precision the periods upon which the plaintiff relies and which were previously pleaded as “the relevant period” and “at all relevant times”. While I would have thought leave to amend to cure deficiencies of this sort might ordinarily be granted as a matter of course, having regard to the way the matter was argued it is appropriate that I hear further from the parties before consideration of the grant of leave to amend is given.

ITA’s notice of motion

136 By notice of motion filed on 7 August 2002 ITA claimed an order dismissing the proceedings against it pursuant to Pt 13 r 5 of the SCR. Subrule (1) provides:

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings -

(a) no reasonable cause of action is disclosed;

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of the process of the Court,

the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.


137 In written submissions ITA accepted that the power to summarily dismiss proceedings pursuant to Pt 13 r 5 of the SCR is one to be exercised with exceptional caution: General Steele Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129 per Barwick CJ. It acknowledges that it is subject to a heavy burden to demonstrate that the plaintiff’s claim is so futile that it should not be permitted to go to trial.

138 The court may receive evidence on the hearing of an application for summary dismissal: Pt 13 r 5(2). In support of its motion ITA relied upon three affidavits sworn by the plaintiff on 9 May, 22 August and 15 September 2002, together with the affidavit of Paul Andrew Reidy sworn 12 August 2002, a notice to admit facts served on 6 September 2002 together with the plaintiff’s response thereto dated 16 September 2002, Exhibits 45 and 46 to the affidavit of Ian Peter Scott O’Donahoo sworn 20 September 2002 and a number of documents produced under subpoena that were tendered as a bundle, Ex “A”.

139 ITA’s application for summary dismissal was argued upon the basis that the following facts were not in issue.

140 ITA was incorporated on 18 June 1999. It did not market any tobacco products prior to 31 August 1999.

141 The plaintiff commenced smoking cigarettes in 1972 at the age of ten years. She was aware generally by 1977 that smoking was dangerous. At that time she was smoking about thirty Winfield Red cigarettes per day. She considered that she was then addicted to smoking. She was diagnosed with emphysema in 1995. In 1996 she commenced reducing her smoking.

142 In 1999 the plaintiff was told that she needed a lung transplant in order to save her life.

143 By May 1999 the plaintiff was aware of the health risks associated with cigarette smoking. She was a speaker at “The Other Drug Summit” on 20 May 1999 on the topic of “Concerns of smokers and ex-smokers – a personal perspective”. Other speakers on that day addressed the adverse health effects of smoking in speeches entitled “Cancer and Smoking” and “Heart Disease and Smoking”.

144 In April 1999 the plaintiff joined, or sought to join, a class action proceeding in the Federal Court that made virtually identical claims to those made in the present proceedings. It was after the High Court refused special leave in the Federal Court proceedings that the plaintiff commenced the present proceedings.

145 As at May 2002 the plaintiff was occasionally smoking cigarettes including Horizon cigarettes. ITA markets Horizon cigarettes.

146 In response to a notice to admit facts the plaintiff admitted the following matters:

(a) that she was aware prior to June 1999 that smoking cigarettes causes health problems,

(b) that she was aware by June 1999 of the risks of lung cancer from smoking,

(c) that she was aware by June 1999 of the risk of smoking being addictive,

(d) that cigarettes purchased by her from 6 September 1999 have been in packs with warnings about the health hazards of smoking on them,

(e) that since 6 September 1999 she has not been aware of cigarettes marketed, distributed and sold by ITA being advertised for sale on television or in newspapers or magazines sold to the public,

(f) that since 6 September 1999 she has not been aware of cigarettes marketed, distributed and sold by ITA being promoted through bill boards or any other form or outdoor advertising,

(g) that since 6 September 1999 she has not been aware of ITA sponsoring any public events,

(h) that since 6 September 1999 she has not been aware of the cigarettes marketed, distributed and sold by ITA promoted through consumer competitions;

(e) has not been induced to purchase and smoke cigarettes on the basis of point of sale marketing and tobacco shop displays by ITA;

(f) has not been induced to purchase and smoke cigarettes through ITA’s promotions.”

147 In its written submissions ITA contended that in order for the plaintiff to make out a cause of action for damages against it in contravention of s 52 of the TPA it would be necessary for the plaintiff to establish the following elements:

“(i) That ITA has engaged in an act or conduct (which may be in the form of a representation);

(ii) That is misleading or deceptive or likely to mislead or deceive;

(iii) That the plaintiff has suffered loss and damage ‘by’ the misleading or deceptive conduct (s 82 of the TPA) – this expresses the notions of reliance and causation and is understood as picking up the common law practical or common sense concept of causation as discussed by the High Court in March v Stramare [1991] HCA 12; (1991) 171 CLR 506, Bennett v Minister of Community Welfare [1992] HCA 27; (1992) 176 CLR 408, Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525. Where there are a number of causes, the contravening conduct must have materially contributed to the loss or injury suffered: see Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 at 480 [61] per Gaudron J at 493 [106] per McHugh J.”

148 With respect to the plaintiff’s claim against ITA for unconscionable conduct contrary to the TPA (and the FTA equivalent provisions) ITA submits that the Court would apply the common law test for unconscionability as stated in Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 per Deane J at 474:

“Unconscionable conduct exists in circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or ‘uncontentious’ that he procure, or accept, the weaker party’s assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable.”

149 ITA laid emphasis on the circumstance that with respect to a claim to recover for loss and damage brought about as the result of unconscionable conduct it is necessary for the plaintiff to prove that the loss or damage was occasioned “by” the unconscionable conduct: see s 82 of the TPA. Even if the conduct upon which the plaintiff relies is relevantly misleading or deceptive or unconscionable, in ITA’s submission there exists no possibility that she would be able to prove that any loss or damage suffered by her was causally related to its conduct. As a matter of common sense, any loss or damage suffered by the plaintiff in its submission must have occurred prior to its incorporation.

150 The plaintiff does not plead that any particular damage was suffered after June 1999 that was causally unrelated to her emphysema or that smoking cigarettes after 1999 exacerbated her condition. If such an allegation were made, or could have possibly be made, it was submitted that it would be necessary for the plaintiff to prove that it was the smoking of cigarettes distributed by ITA that was the cause of the loss and that in distributing the cigarettes ITA engaged in conduct that was either misleading and/or deceptive or unconscionable. Given the past smoking history of the plaintiff it is submitted that this is so inherently unlikely as to be able to be disregarded.

151 In ITA’s submission if the Court were satisfied that it had engaged in misleading or deceptive conduct it could not find that she relied on any misleading or deceptive conduct of ITA.

152 ITA submits that having regard to the matters set out above, the plaintiff cannot establish that she has suffered loss or damage by reason of any contravention by it.

153 ITA points to the plaintiff’s written submissions at paragraph [7.5] in which it is said:

“Even if it is accepted that the Plaintiff personally has no claim for compensation in respect of past loss or damages attributable to conduct of ITA, that does not detract from ITA having a liability as being involved in conduct which occasioned that loss or damage or in respect of future loss or damage, quite apart from claims in respect of other persons and remedial injunctive relief”.

154 ITA notes that the plaintiff submits at paragraph [7.2] of her written submissions that she still occasionally smokes cigarettes manufactured and/or distributed by ITA and on that account alone may suffer loss or damage in the future which is compensable by ITA under TPA s 87 and equivalent provisions of the FTA. In this respect ITA submits that there are no particulars of the alleged future loss or damage and that the same have been requested and none supplied. When regard is had to the facts set out above, it is contended that it could not seriously be maintained that future loss or damage will be suffered by the plaintiff which ITA has materially contributed to: I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 at [62].

155 There was an issue between the parties concerning the availability of relief of the character of that sought in paragraph 3.12 of the statement of claim. The plaintiff seeks orders under s 87(1) of the TPA and/or the equivalent provisions of the FTA to compensate her and “other persons” in whole or in part for loss or damage suffered by them or in order to prevent or reduce any loss or damage that is likely to be suffered by them as the result of the contravening conduct. Mr Foster SC, who appeared with Mr Pike on behalf of ITA, submitted that s 87(1) of the TPA does not extend to the making of orders to compensate persons who are not parties to the proceedings. While such a limitation does not appear, in terms, in s 72 of the Fair Trading Act 1987 (NSW), Mr Foster drew my attention to the Civil Liability Amendment (Personal Responsibility) Act 2002 which amended s 72 of the FTA by inserting subsection (1A). That subsection provides:

“(1A) A reference in this section to loss or damage does not, if the loss or damage arises from a contravention of Part V (section 43 excepted) include a reference to:

(a) the death of a person, or

(b) personal injury to a person (including any pre-natal injury, any impairment of the person’s physical or mental condition and any disease).”

Mr Foster acknowledged that it may be that the plaintiff possessed an accrued right such that the introduction of s 72(1A) into the Fair Trading Act 1987 (NSW) does not affect her claim. However, to the extent that the claim is made for an order that a sum of money be paid sufficient to compensate “other persons” with respect to loss or damage suffered by them as the result of the contravening conduct (being personal injury as defined by s 72(1A)) Mr Foster submitted that the amendment would have effect.

156 The provisions of the Civil Liability Amendment (Personal Responsibility) Act 2002 came into operation on various dates. Schedule 4.3 provides a commencement date of 6 December 2002 with respect to the amendment to the Fair Trading Act 1987(NSW).

157 Mr Francey submitted that it is open to the Court to make the orders sought pursuant to s 72 of the Fair Trading Act 1987 (NSW) including to compensate persons other than the plaintiff for loss or damage suffered by them being personal injury as defined. In his submission such persons were possessed of an accrued right and accordingly s 30 of the Interpretation Act operates such that the amendment effected by the Civil Liability Amendment (Personal Responsibility) Act 2002 to the Fair Trading Act does not operate to affect such a right.

158 The Court’s jurisdiction to grant the relief that the plaintiff seeks in paragraph 3.12 of her claim is put in issue by other of the defendants, however, by agreement I was invited to deal only with the pleading summons in so far as the first six defendants were concerned. I do not find it necessary to determine the question in order to deal with ITA’s motion.

159 ITA’s submissions focussed on the plaintiff’s claim for compensation arising out of the circumstances that are pleaded in paragraph 2.24 of the statement of claim. Her case is not confined to her claim for compensation arising out of the matters set out therein. Nor does it depend upon the jurisdiction of the Court to make an order providing compensation to other persons pursuant to s 72 of the Fair Trading Act 1987 (NSW) or otherwise. The plaintiff contends that ITA has contravened the provisions of s 52, s 51AA and/or s 51AB of the TPA and the FTA equivalent provisions. She seeks declaratory and injunctive relief extending beyond the making of an order compensating her or other persons in respect of loss or damage suffered by them for personal injury.

160 Mr Foster sought to deal with this circumstance by contending that the Court would not lend its aid by way of declaratory or injunctive relief to a plaintiff who had not been misled even if, contrary to its submissions, its conduct might be characterised as misleading or deceptive.

161 Mr Foster submitted that it was uncontroversial that ITA had first distributed cigarettes at a time when the marketing of tobacco products was the subject of a regulated regime under Commonwealth and State legislation. ITA had only marketed cigarettes in packets on which health warnings were displayed. To the extent that the plaintiff pleads at paragraph 2.16(A) that ITA engaged in conduct related to the promotion of smoking it is common ground that it has not advertised cigarettes on television, in cinemas, in newspaper or magazine advertisements, in radio broadcasts, or on bill boards or hoardings at sporting events. Any promotional material at retail points of sale has conformed to the regulations that require the display of health warnings. In Mr Foster’s submission the plaintiff pleads no facts to raise her claim against it above a claim involving the lawful sale of cigarettes. She does not plead a case that the lawful sale of cigarettes in conformity with the regulated regime is misleading and/or deceptive or unconscionable conduct.

162 Mr Francey submitted that the plaintiff’s claim against ITA is that since the date of its incorporation it ITA has engaged in conduct denying or minimising the risks associated with smoking for the purpose of inducing and encouraging consumers including the plaintiff and other persons to commence or to recommence smoking (T 291.35). When pressed on whether it was the plaintiff’s contention that the lawful sale of tobacco products accompanied by health warnings amounts to misleading or deceptive conduct or unconscionable conduct for the purposes of the TPA, Mr Francey responded that her claim was in respect of the marketing of mild or light cigarettes. He referred to Schedule B(4) that sets out a number of brands of cigarettes marketed by ITA, including brands described as being “ultra lights”, “super light slims”, “menthol light slims”, “ultra mild”, “extra mild”, “mild menthol”, “micro mild”, “mild”, “special mild”, “super mild” and “menthol mild”.

163 It is the plaintiff’s claim that the distribution and marketing of cigarettes described as being “mild” or “light” is misleading and/or deceptive and/or unconscionable contrary to the provisions of the TPA. The claim is pleaded in paragraph 2.16(B). The plaintiff seeks to make a case that marketing cigarettes as “mild” or “light” is misleading or deceptive notwithstanding that the cigarette packets contain health warnings in conformity with the regulated regime. The reason for this as I understand her case is that a description such as “mild” carries with it a connotation that the cigarette so described is more healthy to smoke or safer to smoke than it is to smoke a cigarette that is not “mild”. This aspect of her claim is taken up in paragraph 2.19(B).

164 The plaintiff claims both declaratory and injunctive relief against ITA. Gaudron J gave consideration to the question of whether a declaration that a defendant has contravened s 52 of the TPA (and s 42 of the FTA) is an appropriate form of relief in Truth About Motorways. Her Honour noted that there may be cases where a bare declaration that some legal requirement has been contravened will serve to redress the harm bought about by the contravention. She went on to observe at [52]:

“But a declaration cannot be made if it ‘will produce no foreseeable consequences for the parties’ (Gardner v Dairy Industry Authority (NSW) (1977) 52 ALJR 180 at 188, per Mason J (with whom Jacobs and Murphy JJ agreed). See also at 189, per Aickin J. And see Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 at 582, per Mason CJ, Dawson, Toohey and Gaudron JJ; Friends of the Earth Inc v Laidlaw Environmental Services (TOC) Inc (unreported, Supreme Court of the United States, 12 January 2000). That is not simply a matter of discretion. Rather, a declaration that produces no foreseeable consequences is so divorced from the administration of the law as not to involve a matter for the purposes of Ch III of the Constitution. And as it is not a matter for those purposes, it cannot engage the judicial power of the Commonwealth. (See Ainsworth v Criminal Justice Commission at 582.”

165 Hely J in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] FCA 918 dealt with a submission that the Court would not in the exercise of discretion grant the applicant the declaration that it sought in the context of a summary dismissal application. His Honour observed at [13] and following:

“[13] If contravention of Part V is assumed, whether relief should be granted in the form of an order for corrective advertising, or in the form of a declaration as to past contravention of the Act, involves discretionary considerations, although it may be, in the case of a declaration, that it cannot be made if it will produce no foreseeable consequence for the parties: see Truth About Motorways at [52] per Gaudron J.

[14] The time for the exercise of that discretion is at the trial, the light of findings made upon the evidence that is adduced. The issue under Order 20 rule 2 is not how I would exercise the discretion to grant or withhold relief on such materials as are before me, which cannot be assumed to be the same as the evidence led at the trial. Rather, the issue is whether the claims for relief are clearly untenable and cannot possibly succeed, no matter what evidence is adduced at the trial, within the confines of the case as pleaded.”


166 The plaintiff pleads a case that the distribution, advertising, marketing and promotion of cigarettes described as “menthol”, “mild”, and “light” representing these to be healthy, or healthier than other cigarettes and/or safe to smoke, or safer to smoke than other cigarettes is both misleading or deceptive or likely to mislead or deceive contrary to s 52 of the TPA and that the same conduct is unconscionable contrary to s 51AB. I am not of the view that the claim is so obviously untenable that it cannot possibly succeed. She claims relief including declaratory and broad injunctive relief that goes beyond orders compensating her or other persons for loss and damage. I do not consider that it is appropriate on an application for summary dismissal to determine that in the exercise of discretion the Court would not grant declaratory or injunctive relief.

167 I do not consider that this is an appropriate case in which to dismiss the plaintiff’s claim against ITA pursuant to Pt 13 r 5 of the SCR.

ORDERS

1. Strike out those parts of the statement of claim that are set out in the Schedule that is annexed to these reasons.

2. Dismiss the seventh defendant’s motion for summary dismissal of the proceedings against it.

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Myriam Cauvin v Philip Morris Limited (ACN 004 694 428)

Schedule

The following are struck out of the amended statement of claim:

Note (d)

The words “at all relevant times” wherever appearing

Note (e)

The words “the relevant period” wherever appearing

Note (g) (v)

Note (i)

Note (h)

Paragraphs 1.5 – 1.27 inclusive

Paragraph 2.2

Paragraphs 2.34 – 2.41 inclusive

“Companies represented by the defendants” in paragraphs 3.8, 3.9(c),

The balance of paragraph 3.10 following the words “contravening conduct”

The words “and the companies represented by the defendants in that conduct” in paragraph 3.11

The words “and companies represtented by the defendants” in paragraph 3.11(a), (h) and (i)

The words “and companies represented by the defendants” in paragraph 3.12(c)(ii) and (iii)

Schedules 1 – 4 inclusive

The heading “The Australian Conspiracy”

The words “during the relevant period and particularly” in paragraph 2.3

Paragraphs 2.4, 2.5 and 2.6

The words “or one or more of them” in paragraph 2.11

The words “(b) ought to have known” in paragraph 2.11

The words ”or one or more of them” and “or ought to have known” wherever appearing in the particulars to paragraph 2.11

The words “or one or more of them” in paragraph 2.12

Paragraph 2.12(b)

The words “or one or more of them” and “or ought to have known” wherever appearing in the particulars to paragraph 2.12

Paragraph 2.16(C)(b)

The words “directly or indirectly” and “of the following kind” in paragraph 2.16(C)

Paragraph 2.16(C)(j)

Paragraph 2.16(C)(k)

Paragraph 2.16(C)(l)

Paragraph 2.16(C)(m)

Paragraph 2.16(C)(n)

Paragraph 2.16(C)(o)

The words “conduct involving”, “including” and “various” and “known to be effective” in paragraph 2.16(D)

The words “remain silent about and/or” in paragraph 2.16(E)

Paragraph 2.16(F)

The references to statements attributable to the defendants prior to January 1975 in Schedule “C”

The balance of paragraph 2.19 following the words “or the FTA”

The word “specifically” wherever occurring in paragraph 2.19(A) – (E)

Paragraph 2.19(C)(b), (j), (k), (l), (m), (n) and (o)

The words “remained silent about and/or” in paragraph 2.19(E)

Paragraph 2.19(F)

The word “include” in particular (a) of paragraphs 2.20

Particular (b) of paragraph 2.20

Paragraph 2.23(d), (e) and (f)

Paragraphs 2.26 – 2.33

Paragraphs 3.1 – 3.7 inclusive

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LAST UPDATED: 01/08/2003