Lindsey v Philip Morris Limited

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FEDERAL COURT OF AUSTRALIA

Lindsey v Philip Morris Limited [2004] FCA 9

TRADE PRACTICES – Whether, in the circumstances, a failure to warn could constitute misleading or deceptive conduct – warnings about health risks required by law - conduct before the Trade Practices Act came into force - damages for lung disease and other conditions claimed – causation not pleaded – negligence – promotion merely puffery

PRACTICE AND PROCEDURE – application for summary judgment – no reasonable cause of action disclosed – whether frivolous or vexatious or an abuse of process of the Court

Trade Practices Act 1974 (Cth) ss 52 and 82
Federal Court of Australia Act 1976 (Cth) s 56
Federal Court Rules 1979 (Cth) O 20 r 2

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 applied
Bell Wholesale Co Ltd v Gates Export Corporation (No 2) (1984) 2 FCR 1 referred to
Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431; (1990) 12 ATPR 40, 994 referred to
Jodast Pty Ltd v A & J Blattner Pty Ltd (1991) 104 ALR 248 referred to
Dey v Victorian Railways Commissioners (1949) 78 CLR 62 referred to
Webster v Lampard (1993) 177 CLR 598 referred to
McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409 applied
Pridmore v Magenta Nominees Pty Ltd (1999) 161 ALR 458 considered
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 referred to
Stenhouse v Coleman (1944) 69 CLR 457 referred to
Gerhardy v Brown (1985) 159 CLR 70 referred to
Holland v Jones (1917) 23 CLR 149 referred to
Commonwealth Shipping Representative v P & O Branch Service [1923] AC 191 referred to
All States Frozen Foods Pty Ltd v Commissioner of Taxation (1990) 21 FCR 457 referred to
Australian Oil Refining Pty Ltd v Bourne (1980) 28 ALR 529 referred to
General Newspapers Pty Ltd v Telstra Corporation (1993) 45 FCR 164 applied
Pappas v Soulac (1983) 50 ALR 231 applied
Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd (1998) 155 ALR 714 considered
Rosenberg v Percival (2001) 205 CLR 434 referred to
San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 referred to
Cauvin v Philip Morris Limited [2003] NSWSC 1225 distinguished
Attorney-General for the State of Victoria v Lindsey (unreported, Supreme Court of Victoria, Kellam J, 16 July 1998) referred to

Re Sjostrom-Clemens-Lindsey [2003] VSC 94 referred to
Sjostrom-Clemens-Lindsey v Attorney General for the State of Victoria [2003] VSC 132 referred to
Attorney-General v Lindsey [2003] VSC 176 referred to

J D Heydon, Cross on Evidence (6th edition, Butterworths, Sydney, 2000)

DAVID JAMES LINDSEY (NOW KNOWN AS DAVID JAMES SJOSTROM-CLEMENS-LINDSEY) v PHILIP MORRIS LIMITED (ACN 004 694 428)
V 408 of 2003

KENNY J
21 JANUARY 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 408 OF 2003

BETWEEN:

DAVID JAMES LINDSEY (NOW KNOWN AS DAVID JAMES SJOSTROM-CLEMENS-LINDSEY)
APPLICANT

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Details
Case
[2004] FCA 9
Decision Date

CaseChat Overview and Summary

In Lindsey v Philip Morris Limited, the plaintiff, Mr Lindsey, brought a claim against Philip Morris, alleging that they failed to warn him about the health risks associated with smoking their tobacco products, and that their promotion of these products was misleading and deceptive under the Trade Practices Act 1974 (TPA). The court was required to decide whether the claim should be dismissed as frivolous or vexatious under Order 20, Rule 2 of the Federal Court Rules.

The court considered the statutory requirement for cigarette packets to carry health warnings from 1973 onwards, and noted that such warnings were indeed present on the packets distributed by Philip Morris. Given this, the court found that it would not be open to find that Philip Morris failed to warn potential smokers of the health risks, as required warnings were already in place. The court concluded that Mr Lindsey's claim was not supported by the evidence and was, therefore, frivolous. Accordingly, the court dismissed the proceeding and ordered Mr Lindsey to pay Philip Morris' costs.

This decision underscores the importance of ensuring that claims brought before the court are supported by adequate evidence and legal basis. The court's dismissal of Mr Lindsey's claim as frivolous highlights the principle that the court's resources should not be wasted on baseless or unsubstantiated claims.

Orders

Orders of the court

1. The motion for security for costs, notice of which was filed on 18 August 2003, be adjourned sine die.

2. There be no order as to the costs of the motion for security for costs.

3. Pursuant to O 20, r 2 of the Federal Court Rules, the proceeding be dismissed.

4. The applicant pay the respondent’s costs of the proceeding, including the costs of the motion for summary judgment, notice of which was filed 18 August 2003.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Mr Lindsey’s claim must, so it seems to me, fail at the outset. First, it would not be open to a court to find that Philip Morris did the thing of which he complains. That is, it would not be open to a court to find that Philip Morris failed to warn potential smokers that smoking the cigarettes manufactured by it was hazardous to health. It is a notorious fact, of which judicial notice may be taken, that from 1973 all cigarette packets that Philip Morris manufactured and distributed in Australia carried a health warning in conformity with State and Territory legislation. Regarding judicial notice, see Stenhouse v Coleman (1944) 69 CLR 457 at 469 per Dixon J; Gerhardy v Brown (1985) 159 CLR 70 at 141-142 per Brennan J; Holland v Jones (1917) 23 CLR 149 at 153 per Isaacs J; Commonwealth Shipping Representative v P & O Branch Service [1923] AC 191 at 212 per Lord Sumner (which was approved in All States Frozen Foods Pty Ltd v Commissioner of Taxation (1990) 21 FCR 457 at 465-466 per Bowen CJ, Lockhart and Gummow JJ). See further J D Heydon, Cross on Evidence, (6th edition, Butterworths, Sydney, 2000) at [3005]-[3015]; and Australian Oil Refining Pty Ltd v Bourne (1980) 28 ALR 529 at 532-533 per Stephen, Mason, Aickin and Wilson JJ. Between 1973 and 1987, State and Territory legislation required cigarette packets displayed for sale to persons such as Mr Lindsey to show the following warning:“WARNING – SMOKING IS A HEALTH HAZARD.” In Victoria, this requirement was imposed by the Cigarette Package Labelling Regulations 1972 (Vic) (made under the Health Act 1958 (Vic) and effective from 1 January 1973 to 31 July 1984) and the Health (Tobacco Packages) Regulations 1984 (Vic) (made under the Health Act 1958 (Vic) and effective from 1 August 1984 to 1 September 1986). See also Cigarette Containers (Labelling) Ordinance 1972 (ACT) (effective from 1 January 1973 to 31 August 1987); Cigarettes (Labelling) Regulations 1973 (NSW) (made under the Cigarettes (Labelling) Act 1972 (NSW) and effective from 1 July 1973 to 30 June 1987); Cigarette Containers (Labelling) Ordinance 1972 (NT) (effective from 1 January 1973 to 14 June 1987); Therapeutic Goods and Other Drugs Regulations 1982 (Qld) (made under the Health Act 1937-1981 (Qld) and effective from 1 July 1982 to 30 June 1987); Cigarettes (Labelling) Regulations 1973 (SA) (made under the Cigarettes (Labelling) Act 1971-1972 (SA) and effective from 1 July 1973 to 30 June 1987); Cigarettes (Labelling) Regulations 1973 (Tas) (made under the Cigarettes (Labelling) Act 1972 (Tas) and effective from 1 July 1973 to 17 August 1987); and Cigarettes (Labelling) Regulations 1972 (WA) (effective from 1 January 1973 to 30 June 1986). From 1987 to 1994, Commonwealth, State and Territory legislation required cigarette packets offered for sale to display one of the following health warnings:“SMOKING CAUSES LUNG CANCERHealth Authority Warning”“SMOKING CAUSES HEART DISEASEHealth Authority Warning”“SMOKING DAMAGES YOUR LUNGSHealth Authority Warning”“SMOKING REDUCES YOUR FITNESSHealth Authority Warning”

Decision

Reasons for decision

KENNY J
For reasons that are plain enough, I deal first with the application for summary judgment.the summary judgment application By its motion, Philip Morris seeks orders that:1.Pursuant to order 20, rules 2(1)(a), (b) and (c) of the Federal Court Rules or the Court’s implied powers, the proceeding be dismissed or permanently stayed on the grounds that no reasonable cause of action is disclosed and that it is frivolous or vexatious or an abuse of the process of the Court.2.The Applicant pay the Respondent’s costs of this motion.3.Such further or other orders as the Court thinks fit. Order 20 r 2 of the Rules states:(1)Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding -(a)no reasonable cause of action is disclosed;(b)the proceeding is frivolous or vexatious; or(c)the proceeding is an abuse of the process of the Court,the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding.(2)The Court may receive evidence on the hearing of an application for an order under sub-rule (1). At the hearing of its application for the summary judgment, Philip Morris relied on two affidavits of its solicitor, Ian Peter Scott O’Donahoo, sworn on 15 August 2003 and 26 September 2003 respectively. Mr O’Donahoo has also sworn another affidavit on 15 August 2003 in support of the respondent’s security for costs application. Mr Lindsey relied on his own affidavits sworn on 25 August 2003 and 8 September 2003. He also sought leave to rely on four documents headed “Evidence: General” (one document dated 11 August 2003 and another dated 25 August 2003, and two documents dated 8 September 2003) and the material that accompanied them. Both parties relied on written submissions, which they augmented at the hearing of the motions.the case as pleaded By his application and amended statement of claim, Mr Lindsey seeks to invoke what he terms the “jurisdictional authority [of this Court] to hear and determine any matter which arises out of or under PART V of the [TPA]”. He apparently seeks to allege that Philip Morris has contravened s 52 of the TPA in connection with the promotion of its “Imported Tobacco Product through the Media and Television, at all relevant and material times since 1972 or 1973.” Paragraph 5 of his amended statement of claim states:5.CHRONOLOGY OF CIRCUMSTANCE,(i)That after the Respondents [sic] promotion of it’s [sic] Imported Tobacco Product through the Media and Television, at all relevant and material times since 1972 or 1973 the Applicant became a consumer and longstanding smoker of the tobacco product known and identified as MARLBORO (filter cigarettes) up till [sic] late 1987.(ii)That after the Respondents [sic] promotion through retail outlets of it’s [sic] locally made Tobacco Product the Applicant since late 1987 and up till [sic] July 1999 was a consumer and longstanding smoker of LONGBEACH MILD.(iii)That resultant of the Applicants [sic] longstanding smoking of the Respondents [sic] Imported Tobacco Product identified as MARLBORO (filter cigarettes) combined with longstanding smoking of the Respondents [sic] locally made Tobacco Product identified as LONGBEACH MILD the Applicant in or about June 2000 was stricken down with a breathing disorder.

Ratio Decidendi

Legal Principle Established

Established by: KENNY J

Mr Lindsey alleges that, in 1972 or 1973, Philip Morris was “fully aware and knowledgeable of the foreseeable health risks associated with [his] longstanding smoking of it’s [sic] Imported Tobacco Product known as Marlboro (filter cigarettes) and did with hold [sic] from [him] such knowledge”. His further (verbatim) pleading is that:FURTHER and on the alternative the Applicant also asserts and alleges that the outer packaging of the Respondents Imported Tobacco Product as well as it’s locally made Tobacco Product prior to the 1990’s DID NOT HAVE inscribed upon them distinguishable well defined bold lettering warning the Applicant of the foreseeable health risks associated with the longstanding smoking of the Respondents Imported Tobacco Product as well as it’s locally made Tobacco Product, despite the fact the Respondent was fully knowledgeable and aware of the foreseeable health risks and dangers prior too 1972 or 1973 when the Applicant first started smoking the Respondents Tobacco Products.BY reason of the aforesaid matters as outlined …, the Respondent by not revealing to the Applicant the foreseeable health risks associated with the longstanding smoking of it’s Imported Tobacco Product in 1972 or 1973 and again in late 1987 regarding its locally made Tobacco Product the Respondent did wilfully contribute to the Applicants smoking related Lung Disease and Secondary Problems.FURTHER and alternatively for completeness the Respondent by not advising the Applicant before commencing to smoke it’s Imported Tobacco Product in 1972 or 1973 was an act of deceptiveness committed by the Respondent towards the Applicant as the Applicant not knowing any different at the age of about 14 years was mislead into believing it was safe to do so by the Respondents promotion of it’s Imported Tobacco Product.BY reason of the aforesaid matter … the Respondent in 1972 or 1973 did engage in conduct in Trade and Commerce which was misleading deceptive did mislead and deceived, (Section 52(1), PART V, Trade Practices Act of 1974.BY reason of the aforesaid matters the Applicant did has been and still is suffering damage.consideration of summary judgment application The Court will only dismiss or stay a proceeding under O 20 r 2 in a very clear case. In General Steel, at 128-129, Barwick CJ accepted that “the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion”. The standard of satisfaction required for summary judgment is that stated in General Steel at 129-130: see also Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J and Webster v Lampard (1993) 177 CLR 598 at 602-603 per Mason CJ, Deane and Dawson JJ. Upon examination of Mr Lindsey’s claim, I am persuaded, for the reasons set out below, that it is appropriate to terminate the proceeding before trial.