BASF Australia Ltd v Bray & Ors

[2004] HCATrans 206

[2004] HCATrans 206

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M241 of 2003

B e t w e e n -

BASF AUSTRALIA LTD

Applicant

and

TRUDY BRAY

First Respondent

F. HOFFMANN-LA ROCHE LTD, ROCHE PRODUCTS PTY LTD, ROCHE VITAMINS AUSTRALIA PTY LTD, ROCHE VITAMINS ASIA PACIFIC PTE LTD, AVENTIS SA, AVENTIS ANIMAL NUTRITION PTY LTD, AVENTIS ANIMAL NUTRITION SA, AVENTIS ANIMAL NUTRITION ASIA PACIFIC PTE LTD, BASF AKTIENGESELLSCHAFT AND BASF EAST ASIA REGIONAL HEADQUARTERS LIMITED

Second Respondents

Office of the Registry
  Melbourne  No M243 of 2003

B e t w e e n -

ROCHE PRODUCTS PTY LTD AND ROCHE VITAMINS AUSTRALIA PTY LTD

Applicants

and

TRUDY BRAY

First Respondent

F. HOFFMANN-LA ROCHE LTD, ROCHE VITAMINS ASIA PACIFIC PTE LTD, AVENTIS SA, AVENTIS ANIMAL NUTRITION PTY LTD, AVENTIS ANIMAL NUTRITION SA, AVENTIS ANIMAL NUTRITION ASIA PACIFIC PTE LTD, BASF AKTIENGESELLSCHAFT, BASF AUSTRALIA LTD AND BASF EAST ASIA REGIONAL HEADQUARTERS LIMITED

Second Respondents

Office of the Registry
  Melbourne  No M245 of 2003

B e t w e e n -

AVENTIS ANIMAL NUTRITION PTY LTD

Applicant

and

TRUDY BRAY

First Respondent

F. HOFFMANN-LA ROCHE LTD, ROCHE PRODUCTS PTY LTD, ROCHE VITAMINS AUSTRALIA PTY LTD, ROCHE VITAMINS ASIA PACIFIC PTE LTD, AVENTIS SA, AVENTIS ANIMAL NUTRITION SA, AVENTIS ANIMAL NUTRITION ASIA PACIFIC PTE LTD, BASF AKTIENGESELLSCHAFT, BASF AUSTRALIA LTD AND BASF EAST ASIA REGIONAL HEADQUARTERS LIMITED

Second Respondents

Applications for special leave to appeal

GLEESON CJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 18 JUNE 2004, AT 10.26 AM

Copyright in the High Court of Australia

MR A.C. ARCHIBALD, QC:   May it please the Court, I appear with my learned friend, MR P.J. ALLAWAY, for the applicant BASF.  (instructed by Blake Dawson Waldron) 

MR C.M. CALEO:   If the Court pleases, I appear for the Roche corporations in the second application, M243.  (instructed by Clayton Utz) 

MR P.J. BRERETON:   May it please the Court, I appear for Aventis Animal Nutrition Pty Ltd, the third applicant.  (instructed by Baker & McKenzie) 

MR S.J. GAGELER, SC:   If the Court pleases, I appear with MR L.W.L. ARMSTRONG for the first respondent in today’s applications.  (instructed by Maurice Blackburn Cashman) 

GLEESON CJ:   Mr Caleo and Mr Brereton, you have made arrangements with Mr Archibald for division of your 20 minutes between you, have you? 

MR CALEO:   Yes, your Honour. 

MR BRERETON:   Yes, your Honour. 

GLEESON CJ:   Thank you.  There is a certificate from the Deputy Registrar that she has been informed by Blake Dawson Waldron, solicitors for two BASF companies named as some of the second respondents, that those respondents will submit to any order of the Court save as to costs.  She has been informed by Clayton Utz, solicitors for Hoffmann‑La Roche and Roche Vitamins, named as some of the second respondents, that they submit to any order of the Court save as to costs, and she has been informed by Baker & McKenzie, solicitors for three Aventis companies named as some of the second respondents, that those respondents will submit to any order of the Court save as to costs.  Yes, Mr Archibald. 

MR ARCHIBALD:   May it please the Court.  In the Full Court, Justice Carr observed that the appeal raised important matters of public law and that those matters entailed circumstances where the law was not clearly settled. 

GLEESON CJ:   Mr Archibald, the statement of claim that was dealt with by the Full Court has been the subject of further amendment, has it not?

MR ARCHIBALD:   Yes, but not in a way affecting at all the points that ‑ ‑ ‑

GLEESON CJ:   But is it proposed that we would deal with a pleading that is now defunct?

MR ARCHIBALD:   The Full Court dealt with the points raised, cognisant of the circumstance and the likelihood that amendments would be made, but as Justice Finkelstein observed at page 118 of the application book, it was unlikely that the changes would substantially affect the matters which were in issue.  

GLEESON CJ:   Well, that may be all right within the Federal Court, but there would be something a little curious, would there not, about us dealing with a statement of claim that has since been amended?  That is not the current pleading. 

HAYNE J:   What orders would we make?

MR ARCHIBALD:   The orders that the Court would make would require that the proceeding not be competent to continue as a representative proceeding, because the vice identified concerns the constitution of the group, and that vice assists in the subsequent amended statement of claim and amended application.

GLEESON CJ:   How do we know that?  Would somebody show us and say, this is the current pleading?

MR ARCHIBALD:   There has not been an endeavour on the part of the respondent to the application to bring forward material to demonstrate to the Court that the point upon which the Full Court determined the matter has now abated in any way by reason of any amendment that may have occurred.

GLEESON CJ:   But what has not only abated but actually disappeared is the pleading the subject of the argument.

MR ARCHIBALD:   The vice which we identify concerns not the particular articulation of matters in the statement of claim, but the competence of commencement of the proceeding.  Section 33C stipulates criteria which are to be satisfied in order that the proceeding may be commenced.

HAYNE J:   Can I just track it through the papers, Mr Archibald.  Is the relevant initiating process in the Full Court that at page 56, 57, and that is a motion for leave?

MR ARCHIBALD:   Yes, if the Court pleases.

HAYNE J:   That is seeking leave to appeal from – it is ramificated, I assume, in the case of all of the other applicants, but that is typical ‑ ‑ ‑

MR ARCHIBALD:   Yes, with semantic changes.

HAYNE J:   Yes.  That then takes you back, does it, to the order that appears at page 11?  That order that was the subject of application for leave?

MR ARCHIBALD:   Yes.

HAYNE J:   Now, what I do not think we have are the motions that are referred to in paragraph 2.  What, if any, of the relief sought in those motions was, in effect, raised in the Full Court and would be alive in this Court if leave to appeal were to be granted as you seek?

MR ARCHIBALD:   Both points, because that which was attacked was the competence of the proceeding as a representative proceeding, satisfying the criteria of Part IVA.

HAYNE J:   Well, I think we would need to be shown, would we not, where that appears in the notice of motion, unless it be common ground among the parties?  Would we not need to know that the original notice of motion raised, as a question discrete from the striking out of a statement of claim, a prayer for relief, presumably something that is along the lines of an order that the proceeding no longer go forward as a group proceeding?

MR ARCHIBALD:   It would have been desirable, no doubt, that those materials be before the Court, but the reasoning of the Full Court, in our submission ‑ ‑ ‑

HAYNE J:   Deal against orders, not reasons – that is what is worrying me.

GLEESON CJ:   Well, let me draw your attention to a paragraph in the reasoning.  Look at page 115 and paragraph 212, in particular, the second last sentence of that paragraph.

MR ARCHIBALD:   Yes, but the reasoning of the court demonstrates – as the reasoning of Justice Merkel, the primary judge, demonstrates – that the amendments that were contemplated as capable of yielding conformity with section 33C would be amendments which needed to address the vices that had been identified.  One of those vices necessarily must have been the vice that not all group members had claims against all respondents.  No doubt amendments of the kind that would eliminate that vice might then yield conformity with requirements of section 33C, but it is not suggested, as we would understand it, by the respondents that any amendments that have been made address and deal with that vice. 

The alternative would be to return to the Federal Court, make the like application in relation to the current amended statement of claim, seek leave to appeal from that decision to the Full Court, suffer no doubt the same fate as we met in the Full Court, and then, again, apply for leave here, against no doubt the same conceptual possibility that amendments could be made which might address the vice.

GLEESON CJ:   That may be the inescapable consequence of the fact that this issue is brought forward as a pleading point, and we would then, if we granted special leave, have put before the High Court a pleading point about a pleading that does not exist any longer.

MR ARCHIBALD:   But the alternative is that we could never escape from the consequences of a Gordian knot.  We would have a point there, but we could never agitate it because it might always be said, “Well, there is a step that could be adopted that might overcome it”.

GLEESON CJ:   What did Justice Branson have in mind as a possible amendment to the statement of claim that might bring it into conformity with section 33C?

MR ARCHIBALD:   It is a little unclear, but possibly her Honour’s contemplation that it might be possible, within the framework of one proceeding, to identify discrete groups or classes – in other words, to divide the class or the group into sub‑groups or sub‑classes, each of which groups might be seen to satisfy section 33C.  Her Honour ‑ ‑ ‑

HAYNE J:   Is that what has happened?

MR ARCHIBALD:   No.  What remains is a monolithic class, still containing the essential vice that not all of the group members of the class are capable of having claims against all respondents, primarily for the reason that some of the respondents were not in existence for the totality of the period to which the claims of the group are directed.  Therefore, of necessity, some of the group members are incapable of having claims against some of the respondents, or their activities would be confined to a period during which those respondents did not exist, could not have supplied vitamins during that period, could not have been parties to a cartel, and could not have implemented a cartel.  And that clearly persists in the amended form of claim.

HAYNE J:   Do you say that the amended form of claim would suffice according to the test propounded by the Full Court?

MR ARCHIBALD:   No.

HAYNE J:   Why should you not agitate that in the Federal Court?

MR ARCHIBALD:   Because we suffer at present an adverse decision on identical grounds, and if the Full Court or if the primary judge were to address the question, the answer would be the same, but, again, there would no doubt be the corollary, appended to the primary judge’s reasoning, that some form of amendment might deal with the problem.  The like conclusion, one must expect, would be adopted in the Full Court. 
We would come back here and the same point would be made against us. 

HAYNE J:   There has to come a point where a group of plaintiffs has a last chance, I would assume. 

MR ARCHIBALD:   There is no reason, in our submission, to expect that the step that was contemplated or identified as able to be taken will be taken by the applicant in the proceeding.  Between the pleading and the application addressed by the Full Court and the final form of amendment that has been adopted, there were three or four other iterations of possible amendments.  The final form does not eliminate the vice, and there is no reason, in our submission, to conclude on any basis that the current form would be replaced by some other form that would deal with the problem.  We would end up in limbo, unable to have the point addressed because of the theoretical potentiality for an amendment to be made that might address the problem.

GLEESON CJ:   Your argument, as I understand it, is that it is impossible for Ms Bray to amend her statement of claim so as to conform with section 33C(1), because neither she nor any other people can possibly be entitled to damages against all the respondents.

MR ARCHIBALD:   Yes.  That chance has been available, a step has been taken, but not that step, and thus the point of the claim.

GLEESON CJ:   But the whole argument turns on the distinction between a right to damages and a right to injunctive or declaratory relief.

MR ARCHIBALD:   There are two points.  One is, what is constituted by having a claim, and what your Honour the Chief Justice has just observed attends centrally that point.  The second point is the Philip Morris point.  Is it a requirement that each group member have a claim, properly understood, against each respondent?  But the former point bears upon the latter, if ‑ ‑ ‑

GLEESON CJ:   But if the nature of your complaint, if I can use that neutral expression, is that all the respondents have entered into a combination, if I can use that neutral expression, as distinct from the claim that a cigarette smoker might have, that she has been caused lung cancer by smoking ten cigarettes for the whole of her life – that affects the matter, does it not?

MR ARCHIBALD:   It bears upon the matter, but, first of all, a plurality of cartels is alleged.  Secondly, the period which is addressed by the relief which is sought by the group members spans the years 1992 to 1999, and two of the respondents were not in existence until 1995.  So long as the period addressed by the proceedings includes the 1992 to 1995 years, the impossibility of group members having claims against all respondents persists.  That is the feature that is evident in the amended pleading.

So we say that the matters that are raised are embedded in the proceeding itself.  We say that the matters raised are of importance; there is a diversity of view between the members of the Full Court.  The reasons of the Full Court compound the unsettled nature of the tension to these issues in the Federal Court.  Justice Branson concluded in relation to the Philip Morris case that it should be followed unless and until this Court concluded that a different construction should attend section 33C. 

The issue is of a nature likely to arise in a number of other group proceedings in the Federal Court.  Indeed, it is evident that the problem has already arisen subsequently to the decision of the Full Court, but we have included in our list of authorities reference to Justice Tamberlin’s decision in Johnson v HIH, which is a group proceeding where there are multiple respondents.  His Honour concluded that he ought to follow Philip Morris, notwithstanding that two members of the Full Court in this case concluded that Philip Morris would not be followed.

The proper characterisation of “claim” and the concept of having a claim is central to the core features of the criteria which are laid out in the legislation as being requisites for the commencement of a representative proceeding.  Those matters will continue to be beset by doubt and difficulty in other litigation, as well as the central problem that has arisen in this litigation, and they are, in our submission, apt for determination by this Court.  Otherwise, we rely upon the matters articulated in our outline.  If the Court pleases.

GLEESON CJ:   Thank you.  Yes, Mr Caleo.

MR CALEO:   If the Court pleases, while the notices of motion which initiated the dispute between the parties are not in the court book, your Honours will see in two passages in Justice Merkel’s reasons for

decision statements which indicate the fundamental character of the particular attack made by the respondents upon the application.  Can I draw the Court’s attention to page 14 of the application book.  This appears in the reasons for decision of Justice Merkel.  His Honour states in paragraph 6:

The main issue raised by the motions was whether the representative proceeding was properly constituted in accordance with Pt IVA of the FCA.  The Australian subsidiaries contended that the proceeding was not constituted in accordance with the requirements of ss 33C and 33H of the FCA –

and it is 33C which remains in dispute.  Then at page 31, after his Honour had dealt with a number of what one might call properly pleading disputes, his Honour then moved to this more fundamental matter.  At paragraph 30, his Honour stated in the second sentence:

I need not take those matters further as I am satisfied that the defects in the statement of claim are such that it is appropriate to strike it out, rather than only to strike out particular paragraphs of it.  However, the Australian subsidiaries contend that the statement of claim contains fundamental, rather than technical, defects that should lead me to not permit the proceeding to continue as a representative proceeding under Part IVA. 

It is to that matter, and, in particular, section 33C(1)(a), that his Honour then turned.  That remains the only matter that is agitated upon these applications for special leave.  In my submission, it is a matter that goes not to the question of whether the pleading has done so or not, but whether the applicant in the proceeding is capable of constituting the group in a way which will satisfy the requirements as laid down by the Full Court in the Philip Morris Case. 

Your Honours, otherwise I rely upon the matters raised in oral submissions by my learned friend, Mr Archibald.  There is relevantly no distinction between the application brought by his client and that brought by my client.

GLEESON CJ:   Thank you.  Yes, Mr Brereton.

MR BRERETON:   What I would seek to do, your Honours, is to address one matter in relation to paragraph 212 of Justice Branson’s decision.  Whilst we would generally support the conclusions of her Honour, we do take issue with the conclusion in paragraph 212, and that is the specific matter we deal with in special leave question No 4, which appears at page 209 of the application book.

GLEESON CJ:   Yes, thank you, Mr Brereton.  Yes, Mr Gageler.

MR GAGELER:   Your Honours, the judgment was interlocutory.  The present applicants did not seek a stay, and a juggernaut at first instance has moved on.  There is now a fourth amended application.  There is in that fourth amended application a narrowing of the class, and there is in that fourth amended application a substitution of the parties, the result of which is that the first respondent, Ms Bray, is not only no longer a party to the proceedings in the Federal Court, she is no longer a member of the class in those proceedings in the Federal Court.

If your Honours were to grant special leave, your Honours of course would be dealing with an appeal in the strict sense, and your Honours could only look at the material as it was before the Federal Court at the time it made its determination.  That is now in a very practical sense and in the legal sense, as it concerns my client, irrelevant.  That is, in circumstances where if there is anything in the special leave point, then it goes to part of the constitution of the proceedings and it is available to be taken in respect of the proceedings as currently constituted, either in further interlocutory application or, perhaps more appropriately, given the evolution of this matter, in an appeal from a final judgment. 

To the extent that there is lingering disagreement amongst Federal Court judges, that is something that can be dealt with definitively, so far as the Federal Court is concerned, in relation to a properly constituted subsequent appeal, and, if necessary, by constituting a Bench of five judges.  That is, I would say, if there is anything in the point.  In our submission, there is not.  The proposition ‑ ‑ ‑

HAYNE J:   Their Honours in the Full Court did not follow Philip Morris, Mr Gageler? 

MR GAGELER:   Their Honours in the Full Court did not follow Philip Morris.

HAYNE J:   There is therefore a dispute within the Federal Court about the operation of the group proceedings provisions, is there?

MR GAGELER:   Their Honours did not follow Philip Morris on a point that was not argued in Philip Morris.  Their Honours had the benefit of the full argument.  Justice Merkel at first instance said that there was no substance in the point, having had the benefit of full argument.  Two of the judges in the Full Court said Philip Morris was clearly wrong, and the third member of the Full Court, Justice Branson, could not bring herself to say it was right, simply that it was not clearly wrong, and therefore felt constrained to follow it. 

Your Honours, there is nothing in the point, because it involves a gloss on the language of section 33C.  There are two glosses involved, and if there is any fundamental point of principle underlying the case, it is a principle that has already been dealt with by this Court in Wong v Silkfield.  The principle is, you do not put glosses on the language of section 33C.  The two glosses involved, your Honours – and my learned friends need both glosses to get up in this case – one is to read “claims” in section 33C as excluding claims to injunctive or interlocutory relief under section 80 or section 163A of the Trade Practices Act, on the basis of some supposed distinction between public rights or public claims – or claims to relief in the nature of public declarations or injunctions – and private claims. 

Now, one just simply does not get that out of the language of section 33C.  One cannot get it, in our submission, out of the policy underlying Part IVA of the Act.  That is one point.  The second point they need is the Philip Morris point, and the Philip Morris point is to say, well, it is necessary, to have properly constituted proceedings under section 33C where you have multiple defendants, that each member of the class have a claim against each defendant.  The problem with that, in our submission, is that section 33C simply does not speak to the position of multiple defendants.  Section 33C is concerned with seven or more persons having claims against some other single person, and that is all it is addressed to. 

One goes to section 33ZG to find the rules about joining parties, that is, the rules about having multiple defendants in the one action.  The ordinary rules are in the present case the rules under Order 9 of the Federal Court Rules, and, in our submission, are all that is necessary.  This we see as the point that was made by Justice Finkelstein in paragraph 248 of his judgment.  All that is necessary, where you have multiple defendants, to fall within section 33C(1)(a) is that in relation to each defendant, there are seven or more persons who have the claim against that defendant.  It is not necessary to show that they are the same seven or more persons that have claims against each defendant.  That is the fundamental problem with Philip Morris.  It sees section 33C as having something to say about a topic upon which it is silent.  If the Court pleases.

GLEESON CJ:   Yes, Mr Archibald.

MR ARCHIBALD:   The change of applicants effected by the amendments does not intrude upon the points we seek to raise, for the points address not the identity of the representative applicant, but the constitution of the class and the way in which the constitution of the class vitiates the entitlement to commence the representative proceeding.

GLEESON CJ:   Will you be seeking an order for costs against Ms Bray if you succeed in your appeal?

MR ARCHIBALD:   I will get instructions.  I expect I would have instructions not to.

GLEESON CJ:   It would be prudent to get instructions.  She is no longer a party to the proceedings.

MR ARCHIBALD:   Yes.  The narrowing of the class was not suggested by our friend to eliminate the point of which we make complaint, so there does not seem to be any controversy between the parties in that regard.  In relation to the suggested two glosses, the basis upon which the conclusion should be reached that a group member must have an individual claim is carefully and, in our submission, cogently analysed by Justice Branson in her Honour’s reasons at paragraph 196 and following.  In our submission, the analysis shows there is no gloss; it is an elucidation of what is necessarily entailed in the provisions of section 33C.  In relation to Philip Morris, Justice Sackville’s analysis, particularly at paragraphs 126 and 127, again discloses, in our submission, clearly why the conclusion that his Honour reached in a proper one in the circumstances.

HAYNE J:   Can I just understand what lies behind the substance of the point you seek to agitate.  Is the consequence of it that you say there should be a series of separate group proceedings in which each proceeding is constituted when a group, each of whom has a claim against each defendant ‑ ‑ ‑

MR ARCHIBALD:   We do not say what there should be, your Honour.  We say that what there is is incompetent and cannot proceed.

HAYNE J:   I understand that.  I am just wondering about the consequence that would follow were your contentions to be right, Mr Archibald.  Is the consequence that which I have identified?

MR ARCHIBALD:   It is possible that a representative applicant may adopt a course of that kind.  Of course ‑ ‑ ‑

HAYNE J:   There would be a multiplicity of actions which prudent management of court time might suggest should be heard together.

MR ARCHIBALD:   Well, there are complicated issues.  First, there is the question as to whether, having regard to the responsibilities that a representative party has, it can jettison the elements of the group that it purports to represent for reasons which attend the interests of other members of that group.  There is also, of course, here a series of questions

as to what limitation issues might arise.  So there is a variety of consequences.  Whether there are any and what solutions is another matter. 

HAYNE J:   You would say all this is strangled in the twists and turns of the proceedings ‑ ‑ ‑

MR ARCHIBALD:   We simply submit that section 33C must be observed and has not been observed here.  If the Court pleases.

GLEESON CJ:   We are of the view that having regard to the procedural history of the matter to date and its present status, this is not a suitable vehicle to agitate the issues sought to be raised by the applicants.  The applications are dismissed with costs. 

AT 10.59 AM THE MATTERS WERE CONCLUDED