Butler, Arthur & Ors Kraft Foods Ltd

[1997] FCA 69

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY  No VG 393 of 1996
GENERAL DIVISION

B E T W E E N:
  ARTHUR BUTLER and OTHERS  Applicants

A N D:
  KRAFT FOODS LIMITED and ANOTHER                 Respondents

COURT:         NORTHROP J
PLACE:         MELBOURNE
DATE: 7 FEBRUARY 1997

REASONS FOR JUDGMENT

The issue raised in the matter before the court is of importance in that it has reference to representative proceedings brought under the provisions of Part IVA of the Federal Court of Australia Act 1976. The particular matter before the court, relates to a procedural aspect of proceedings commenced by Arthur Butler for himself and as representing the persons referred to in the affidavit of Hayden Stevens against Kraft Foods Limited and General Foods Pty Ltd.

The claim arises out of allegations that the respondents were the manufacturers of
peanut butter sold under a large number of different brand names, which was in fact contaminated with the result that persons who consumed the contaminated peanut butter suffered injury and are entitled to damages for that injury on various grounds.

The matter was commenced by application, dated 9 July 1996 and was accompanied by a statement of claim which made it clear that the applicant sued for himself and as representing all other persons who as at the date of the filing of the application, had purchased the peanut butter products which were the subject of the contamination alleged in later paragraphs and thereby suffered loss and damage.  These persons were described as the represented persons.  That would relate to all persons who were within the group and had not opted out.  The statement of claim makes it clear that particulars of the acquisition by each of the applicant and the represented persons, which covers the whole of the group as described, would be provided prior to trial. 

In due course the matter came before the court when the applicant was represented and the respondents were represented by counsel. During the course of discussions before Olney J, questions arose as to the form of the advertisement to be published. Later the question arose as to whether particulars should be given in relation to each of the represented persons before a defence was filed.  The matter initially was raised, as I understand it, by the court, but Counsel then appearing for the then applicant agreed it was appropriate to do so.  One may say it was almost on the basis that it was necessary to have some clear idea of the persons who had claimed to have consumed and/or purchased the peanut butter which was contaminated and as a result of consumption had suffered loss or damage.
           This formed an essential part of the claim made against the respondents. It was necessary for the respondents to know at some stage before trial at least, of the extent possibly of the damages or injuries suffered, the causation as to whether the person claiming the injuries had in fact consumed contaminated peanut butter, or whether any injury suffered might have arisen from some other cause, as well as other facts as to when the purchase occurred and matters of that kind. The question of when the peanut butter was purchased may be of importance, having regard to the fact that it is not known yet, but it may well be that all batches of peanut butter produced by the respondents during that particular period, were not contaminated.  The question of contamination has not yet been decided.  In any event an order was made by Jenkinson J with the consent of the parties that particulars be given to a request by the respondents in relation to all these aspects.  The request for particulars was made before the order was made on 16 August 1996.  The request was delivered on 22 July 1996 and the order made on 16 August 1996.

In response to the request, the solicitors for the applicant made reference to the further particulars being sought and referred to a questionnaire, "which our existing clients have already completed".  It stated that that questionnaire was substantially similar in form to the particulars being sought by the respondents, but there was no suggestion made that there would be any objection to the giving of those particulars.  A reading of the whole of that letter suggests to me that the writer of it was aware of the fact that the request applied to all persons who could come within the group affected and who had indicated their intention to remain within the group.  It was on 16 August when the matter came before Olney J, that the question arose as to whether these should be given before defence was filed.
           It was on 16 July that the directions were given by Olney J. The request was served on 22 July and the letter from the solicitors for the applicant is dated 25 July.  On 16 August the matter came before Jenkinson J, who ordered that the applicant file and serve the response to the particulars before 3 September 1996.  There was no suggestion at that time that the particulars should not be given.  It was clear that these particulars were to be supplied before the defence was filed.  Those particulars were not supplied and the matter came before the court as presently constituted towards the end of last year.  After submissions the court made a series of orders, in substance referring the matter to a Registrar for clarification of issues.

The procedural problem was not resolved. The matter is back before the court, the orders now being sought are:

1. that unless the applicant comply within 21 days with paragraph 1 of the order of the court made 16 August 1996 by filing and serving a response to the respondent's request for further and better particulars, dated 22 July 1996 on behalf of all the represented group members, currently registered with the applicants solicitors, the proceeding be stayed;

1. alternatively, the orders made by the court on 16 August 1996 be vacated and in lieu thereof, order that within 21 days the applicant file and serve a response to the respondents request for further and better particulars dated 22 July 1996 on behalf of all represented group members currently registered with the applicants solicitors.

There have been no submissions made that the applicant is unable to comply with the requirement to give those particulars.  In substance, what has been argued, having regard to the provisions of the Federal Court Act, is that this is a case where those particulars should not be given.  It is apparent that mediation has taken place between the parties and I accept that mediation will continue. One may make the comment that in cases of this kind, if mediation can result in a resolution of the problems, it is far better for all concerned than bringing the matter before the court for trial.  This would result in extensive legal costs being involved and possibly great delay in the resolution of the matter.

What is at issue between the parties, essentially, is whether the question of liability, which on one view is whether the peanut butter was in fact contaminated, and if so which batches were in fact contaminated, should be determined as a separate issue before questions of the amount of any compensation to be paid if in fact a case is made out.  The claim is for damages and the question of the causation resulting in damages forms part of the cause of action.  The applicant is claiming that having regard to the provisions of the Federal Court Act, the question of liability should be determined first and until that is determined it is impossible to discuss questions of amount and persons affected.  The respondents claim that it is necessary for them to know details with respect to those who are presently within the group, knowing when they acquired the peanut butter in order to determine which batch it came from, what injury was suffered, whether the injuries are extensive and to have some idea of determining the nature of the amount involved: All these factors are necessary in the mediation process.

In my opinion, having regard to the form of the statement of claim, this is a case where it is appropriate to require the particulars to be given before defence. These particulars extend to all members of the group and on whose behalf the claim is being made.  At the close of the submissions by the counsel for the respondent I summarised the submissions. I see no reason for departing from that summary and they form part of the reasons now being given.  They include the history of the matter, the action taken by the then counsel for the applicant, the actions taken by the solicitors for the applicant and the fact that this is a rather unusual type of case in that liability depends on a number of nebulous factors which cannot be determined until the particulars have been given as to the persons involved in acquiring or consuming peanut butter and when and the result of the injuries suffered.

I propose to make the orders sought or one of them.  I take into account the fact that although the applicant is not seeking formally to vacate the orders made by Jenkinson J on 16 August 1996, I am treating the submissions as covering such a claim.  But in view of the history of the matter that order should not be vacated for the reasons advanced by counsel for the applicant.  Having made the orders which I have indicated I would hope that when those particulars have been given the parties will be in a position to pursue their mediation to a successful conclusion.

I think it is undesirable in a case of this kind to make an order in the form of proposed order 1 with the automatic staying of the proceeding.  I propose to make an order in the proposed form 2, but to allow eight weeks for the giving of those particulars.

I order that on or before 11 April 1997 the applicant file and serve a response to the respondent's request for further and better particulars dated 22 July 1996 on behalf of
all represented group members currently registered with the applicant's solicitors.

I propose to make no order for discovery at this stage.  I would like to see the pleadings, including the defence, before orders are made to limit, if necessary, the area of discovery.

I reserve costs. 

I should also indicate that it would be of assistance if the parties could at least continue with mediation during this intervening period.  They should not use the delay as an excuse to do nothing in that regard.

I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment of the Honourable Justice R M Northrop.

Associate:

Date:

ATTACHMENT

Counsel for the applicant:  Mr S Kaye QC with P Anastassiou
Solicitors for the applicant:  Minter Ellison

Counsel for the respondent:  Mr J T Rush QC
Solicitors for the respondent  Slater & Gordon

Date of hearing:         7 February 1997