Neville Albert Marston v Statewide Independent Wholesalers Ltd; Ekaton Corporation Pty Ltd v Shahin Enterprises Pty Ltd; William Edwin Hall v British American Tobacco Australia Services Ltd; - [2003] NSWSC 816

No judgment structure available for this case.

CITATION: Neville Albert Marston & Anor v Statewide Independent Wholesalers Ltd; Ekaton Corporation Pty Ltd v Shahin Enterprises Pty Ltd; William Edwin Hall & Anor v British American Tobacco Australia Services Ltd; Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd, Joanne Margaret Gow & 2 Ors v Stuart Alexander & Co Pty Ltd, Garry George Adams & Anor v Philip Morris Limited, Arrilla Pty Ltd v ACN 001 259 301 Pty Ltd formerly Australian Independent Wholesalers Pty Ltd; Dale Leslie Berney v Australian Liquor Marketers Pty Ltd; Whelan & Hawking Pty Ltd v IGA Distribution (Vic) Pty Ltd; Sydney Richard Veitch Murray & Anor v Queensland Independent Wholesalers Ltd; William Edwin Hall & Anor v British American Tobacco Australia Ltd; Paul Ashley Neindorf & Anor v IGA Distribution (SA) Ltd; Barry George Williamson & Anor v Composite Buyers Ltd; Joanne Margaret Gow & 4 Ors v IGA Distribution Pty Ltd; William Edwin Hall & Anor v Statewide Tobacco Services Ltd; Gary Leslie Grey & Anor v Philip Morris Limited [2003] NSWSC 816 revised - 25/09/2003

HEARING DATE(S): 03/09/03, 04/09/03, 05/09/03

JUDGMENT DATE:
11 September 2003

JURISDICTION:
Equity Division
Commercial List

JUDGMENT OF: Einstein J

DECISION: Litigation funding arrangement proposed by opt-in procedure held to be against public policy and to constitute an abuse of the Court's process. Application for directions permitting plaintiffs to send 'Opt In' notices to target retailers sought to be represented rejected. Short minutes of order to be brought in.

CATCHWORDS: Practice and procedure - Abuse of process - Maintenance and champerty - Approach to be taken to litigation funding - Third party funder with no interest in outcome other than repayment and profit from the litigation - Special factors disclose abuse of courts process - Representative proceedings - General principles-Whether persons whom plaintiffs purport to represent have the "same interest" in the proceedings - Power to substitute another plaintiff in the place of a named plaintiff who had given up rights of action by settling with tobacco wholesalers before commencing proceedings purporting to be representative proceedings - Discovery - Discovery for the purpose of ascertaining the identities of those falling within class sought to be represented - Power of Supreme Court to order discovery for this purpose - Plaintiff tobacco retailers suing defendant tobacco wholesalers in actions for moneys had and received to recover amounts paid from 1 July 1997 to 5 August 1997 following the decision of the High Court of Australia in Roxborough v Rothmans of Pall Mall Ltd (2001) 208 CLR 516 - Principle of law established in Roxborough - Proceedings purporting to be representative proceedings commenced on the day prior to being statute barred - Attempt by funder to obtain Court directions permitting service upon target opt-in group of notices inviting participation in proceedings upon the non-negotiable basis that funder to receive 33 1/3 percent on amounts recovered from retailers-Members of proposed target opt-in group unable to commence their own proceedings by reason of expiry of limitations period - Funder with monopoly over the means of access to recovery held to be trafficking in the retailers litigation

LEGISLATION CITED: Business Franchise Licences (Tobacco) Act 1987 (NSW)
Business Franchise (Tobacco) Act 1974 (Vic)
Business Franchise (Tobacco) Act 1975 (WA)
Business Franchise (Tobacco and Petroleum Products) Act 1984 (ACT)
Corporations Act 2001 (Cth)
Credit Act 1984 (NSW)
Criminal Law Consolidation Act 1935 (SA)
Criminal Law Act 1967 (UK)
Criminal Code Act 1899 (Qld)
Freedom of Information Act 1989 (NSW)
Limitations of Actions (Recovery of Imposts) Act 1963 Legal Practitioners Act 1995 (Qld)
Legal Profession Act 1987 (NSW)
Limitation of Actions Act 1974 (Qld)
Maintenance and Champerty Abolition Act 1993 (NSW)
Maintenance, Champerty and Barratry Abolition Act 1993 (NSW)
Supreme Court of Judicature (Consolidation) Act 1925 (UK)
Supreme Court Act 1970 (NSW)
Tobacco Business Franchise Licences Act 1980 (Tas)
Tobacco Products (Licensing) Act 1988 (Qld)
Tobacco Products Regulation Act 1997 (SA)
Wrongs Act 1958 (Vic)

CASES CITED: A Firm of Solicitors, Re [1992] 1 All ER 353
AG Australia Holdings Limited v Burton [2002] NSWSC 170
Baltic Shipping Co v Dillon (1993) 176 CLR 344
Bank of America National Trust Association v Taylor [1992] 1 Lloyd's Rep 484
Benning v WIT Capital Group Inc (1 November 2001, Supreme Court of Delaware,
Veasey CJ, Berger and Steele JJ)
Buxton & Lysaught Pty Ltd v Buxton [1977] 1 NSWLR 285
Cameron v National Mutual Life Association of Australasia Limited (No.2) [1992] 1 Qd R 133
Cardale v Watkins (1820) 5 Madd 18
Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398
Cauvin v Philip Morris Ltd [2002] NSWSC 528
Clyne v New South Wales Bar Association (1960) 104 CLR 186
Condliffe v Hislop [1996] 1 WLR 753
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Denist v Freethy (1890) 24 QB 519
DJE Constructions Pty Ltd v Maddocks [1982] 1 NSWLR 5
Duke of Bedford v Ellis [1901] AC 1
Eisen v Carlisle & Jacquelin 417 US 155 (1973)
Eisen v Carlisle & Jacquelin 52 FRD 253 (1971)
Elfic Ltd v Macks (2001) 181 ALR 1
Faryab v Smyth [1998] EWCA 3503
Fauteck v Montgomery Ward & Co Inc 91 FRD 393 (1980),
Firmstones Pty Ltd v Davies [2003] FCA 113
Freehill Hollingdale & Page v Bandwill Pty Ltd [2000] WASCA 150
Giannarelli v Wraith (1988) 165 CLR 543
Giles v Thompson [1994] 1 AC 142
Grovewood Holdings plc v James Capel & Co Ltd [1995] Ch 80
Ha v New South Wales (1997) 189 CLR 465
Halliday v High Performance Personnel Pty Ltd (in liq) (Sacs Group Pty Ltd) (1993) 67 ALJR 678
Heimann v Commonwealth (1935) 54 CLR 126
Hill v Archbol [1968] 1 QB 686
Hooper v Kirella Pty Ltd (1999) 96 FCR 1
Irish Shipping Ltd v Commercial Union Assurance Co Plc [1991] 2 QB 206
James Nelson & Sons Ltd v Nelson Line (Liverpool) Ltd [1906] 2 KB 217
J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [1984] 2 Qd R 413
Kamm v California City Development Company 509 F 2d 205 (1975)
Latec Finance Pty Ltd v Jury [1960] 77 WN (NSW) 674
McFarlane v EE Caledonia Ltd (No 2) [1995] 1 WLR 366
McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623
Magic Menu Systems Pty Limited v AFA Facilitation Pty Limited (1997) 72 FCR 261
Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357
Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021
Martell v Consett Iron Co Ltd [1955] Ch 363
Moon v Atherton [1972] 2 QB 435
Movitor Pty Ltd, Re (1996) 64 FCR 380
Murphy v Bar Association of New South Wales (2001) 49 ATR 48
Muschinski v Dodds (1985) 160 CLR 583
National Australia Bank Ltd v Idoport Pty Ltd [2000] NSWCA 8
New South Wales Bar Association v Cummins (2001) 52 NSWLR 279
New South Wales Bar Association v Somosi (2001) 48 ATR 562
Newton v Merrill Lynch, Pierce, Fenner & Smith 259 F 3d 154 (2001)
Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133
Oppenheimer Fund Inc v Sanders 437 US 340 (1978)
Orr v Diaper (1876) 4 Ch D 92
Price v Rhondda Urban District Council [1923] WN 228
R (Factortame Ltd) v Secretary of State for Environment, Transport and the Regions (No 2) [2002] 4 All ER 97
Roberts v National Detroit Corp 87 FRD 30 (1980)
Rondel v Worsley [1969] 1 AC 191
Roux v Australian Broadcasting Commission [1992] 2 VR 577
Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516
Sayers v Merck SmithKline Beecham plc [2002] 1 WLR 2274
Shaw v Real Estate Board of Greater Vancouver (1973) 36 D L R (3d) 250
Smits v Roach (2002) 55 NSWLR 166
Thai Trading Co (a firm) v Taylor [1998] QB 781
Tosich Constructions Pty Ltd; Ex parte Wily, Re (1997) 143 ALR 18
Trendtex Trading Corporation v Credit Suisse [1982] AC 679
Trendtex Trading Corporation v Credit Suisse [1980] QB 629
Trepca Mines Limited (No 2), Re [1963] 1 Ch 199
Stocznia Gdanska SA v Latreefers Inc (No 2) [2000] All ER (D) 148
Wayne County Produce Co v Duffy-Mott Co Inc 155 NE 669 (1927)
Weldon v Neal (1887) 19 QBD 394
Wild v Simpson [1919] 2 KB 544
William Felton & Co Pty Limited, Re (1998) 145 FLR 211
Wong v Silkfield Pty Ltd (1999) 199 CLR 255
Yaffee v Powers 454 F 2d 1362 (1972)

PARTIES :
Neville Albert Marston, Ekaton Corporation Pty Ltd, William Edwin Hall, Fostif Pty Ltd , Joanne Margaret Gow, Garry George Adams, Arrilla Pty Ltd, Dale Leslie Berney, Whelan & Hawking Pty Ltd, Sydney Richard Veitch Murray, William Edwin Hall, Paul Ashley Neindorf, Barry George Williamson, Joanne Margaret Gow, William Edwin Hall, Gary Leslie Grey (Plaintiffs)
IGA Distribution Pty Ltd (Defendant 50014/03)
Statewide Independent Wholesalers Ltd (Defendant 50069/03)
Shahin Enterprises Pty Ltd (Defendant 50070/03)
British American Tobacco Australia Services Ltd (Defendant 50071/03)
Campbells Cash and Carry Pty Ltd (Defendant 50072/03)
Stuart Alexander & Co Pty Ltd (Defendant 50073/03)
Philip Morris Limited (Defendant 50074/03)
ACN 001 259 301 Pty Ltd (Defendant 50076/03)
Australian Liquor Marketers Pty Ltd (Defendant 50077/03)
IGA Distribution (Vic) Pty Ltd (Defendant 50078/03)
Queensland Independent Wholesalers Ltd (Defendant 50079/03)
British American Tobacco Australia Ltd (Defendant 50080/03)
IGA Distribution (SA) Ltd (Defendant 50081/03)
Composite Buyers Ltd (Defendant 50082/03)
IGA Distribution Pty Ltd (Defendant 50083/03)
Statewide Tobacco Services Ltd (Defendant 50084/03)
Philip Morris Limited (Defendant 50103/03)

FILE NUMBER(S): SC 50069/03; 50070/03; 50071/03; 50072/03; 50073/03; 50074/03; 50076/03; 50077/03; 50078/03; 50079/03; 50080/03; 50081/03; 50082/03; 50083/03; 50084/03; 50103/03

COUNSEL: Mr S Gageler SC, Mr M Leeming, Mr R Dick (Plaintiffs)
Mr I Jackman SC, Mr S Goodman (Defendants - British American Tobacco Australia Services Limited 50071/03, British American Tobacco Australia Limited 50080/03, ACN 001 259 301 Pty Ltd, 50076/03))
Mr N Hutley SC, Ms R Pepper (Defendant - Stuart Alexander & Co Pty Ltd, 50073/03)
Mr M Abbott QC, Mr J Clarke (Defendant - Shahin Enterprises Pty Ltd, 50070/03)
Mr H Insall SC (Defendants - Campbells Cash & Carry Pty Ltd (50072), Australian Liquor Marketers Pty Limited (50077), IGA Distribution (Vic) Pty Limited (50078), Composite Buyers Limited (50082) Queensland Independent Wholesalers Ltd (50079/03, IGA Distribution (SA) Limited (50081/03), IGA Distribution Pty Ltd (50083/03))
Ms Grace Monaco (sol) (Statewide Independent Wholesalers Ltd (50069/03))
Mr R MacFarlan QC, Mr J Hmelnitsky (Philip Morris Limited (50074/03) (50103/03), Statewide Tobacco Services Ltd (50084/03))

SOLICITORS: Robert Richards & Associates (Plaintiffs)
Clayton Utz (Defendants - British American Tobacco Services Limited 50071/03, British American Tobacco Australia Limited 50080/03)
Cridlands Lawyers (Defendant - Stuart Alexander & Co Pty Limited, 50073/03)
Isles Selley Lawyers (Defendant - Shahin Enterprises Pty Ltd, 50070/03)
Freehills (Defendants - Campbells Cash & Carry Pty Ltd (50072), Australian Liquor Marketers Pty Limited (50077), IGA Distribution (Vic) Pty Limited (50078), Composite Buyers Limited (50082), Queensland Independent Wholesalers Ltd (50079/03, IGA Distribution (SA) Limited (50081/03), IGA Distribution Pty Ltd (50083/03))
Moray & Agnew (Statewide Independent Wholesalers Ltd (50069/03))
Allens Arthur Robinson (Philip Morris Limited (50074/03) (50103/03), Statewide Tobacco Services Ltd (50084/03))
Speed and Stracey (ACN 001 259 301 Pty Ltd, 50076/03)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

Einstein J

Thursday 11 September 2003

50069/03 Neville Albert Marston & Anor v Statewide Independent Wholesalers Ltd
50070/03 Ekaton Corporation Pty Ltd v Shahin Enterprises Pty Ltd
50071/03 William Edwin Hall & Anor v British American Tobacco Australia Services Ltd
50072/03 Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd
50073/03 Joanne Margaret Gow & 2 Ors v Stuart Alexander & Co Pty Ltd
50074/03 Garry George Adams & Anor v Phillip Morris Limited
50076/03 Arrilla Pty Ltd v ACN 001 259 301 Pty Ltd formerly Australian Independent Wholesalers Pty Ltd
50077/03 Dale Leslie Berney v Australian Liquor Marketers Pty Ltd
50078/03 Whelan & Hawking Pty Ltd v IGA Distribution (Vic) Pty Ltd
50079/03 Sydney Richard Veitch Murray & Anor v Queensland Independent Wholesalers Ltd
50080/03 William Edwin Hall & Anor v British American Tobacco Australia Ltd
50081/03 Paul Ashley Neindorf & Anor v IGA Distribution (SA) Ltd
50082/03 Barry George Williamson & Anor v Composite Buyers Ltd
50083/03 Joanne Margaret Gow v IGA Distribution Pty Ltd
50084/03 William Edwin Hall & Anor v Statewide Tobacco Services Ltd
50103/03 Gary Leslie Grey & Anor v Philip Morris

JUDGMENT

The Proceedings

1 The decision of the High Court in Roxborough v Rothmans of Pall Mall Ltd (2001) 208 CLR 516 has given rise to two tranches of further litigation. The first tranche which commenced and settled in 2002 is detailed below.

2 The current tranche of proceedings purport to be representative proceedings. That characterisation is in high issue.

3 A further issue concerns whether the proceedings are champertous or otherwise contrary to public policy. In opening the proceedings Mr Gageler SC appearing for the plaintiffs put the matter as follows:

The resolution of that issue turns on the approach to be taken as a matter of contemporary public policy generally and in the circumstances of these particular proceedings to a phenomenon that goes under the label of litigation funding, that is, where a third party in return for a stake in the outcome of proceedings shoulders the burden of litigation in terms of its management and meeting its costs, including the costs of the parties who are sued.

The Notices of Motion

4 There are currently before the court a number of notices of motion by the defendants as applicants being heard at the same time, not all of which are in precisely the same terms, but by and large seeking similar relief, namely orders:

· that the proceedings:

- not continue as proceedings pursuant to Part 8 rule 13 by the plaintiffs listed in Schedule 1 of the summons on behalf of a class of persons described in paragraph C.2 of the summons [the application is for the court to "otherwise order" pursuant to Part 8 rule 13]; or

· pursuant to Part 13 rule 5 or alternatively Part 15 rule 26 for the dismissal of the proceedings or alternatively a stay of the proceedings as an abuse of the process of the court and or as contrary to public policy.

5 Also before the court are notices of motion by which the plaintiffs seek:

· an order, pursuant to Part 23 rule 3 of the Supreme Court Rules and/or pursuant to the inherent jurisdiction of the Court, that the defendant within a nominate period provide verified discovery of and make available for inspection, documents which, to paraphrase the relevant schedule, disclose or record the names and addresses of represented retailers to whom the relevant defendant had sold tobacco products during the relevant period and other similar information required by the plaintiff to prove its case inter alia in terms of damages;

· in the alternative, an order pursuant to Part 24 rule 5 of the Rules and/or pursuant to the inherent jurisdiction of the Supreme Court, that the defendant within a nominate period serve on the plaintiffs a verified statement in accordance with Part 24 rule 6 in answer to interrogatories which essentially seek similar information;

· directions that:

(1) within a nominate period following compliance by the defendant with the orders for discovery or the answering of interrogatories, the plaintiffs send to the each of the represented retailers then known to the plaintiffs, an Opt-In Notice and a particular letter [these documents are appended to this judgment as Appendix “A”];

· directions permitting the plaintiffs to then move for an order pursuant to Part 8 rule 13 of the Supreme Court Rules that the proceedings continue as representative proceedings in respect of the represented retailers named in such affidavit who will have signed the Opt-In Notice.

[It is convenient to refer to such persons as “the target opt-in group”.]

6 Almost at the end of the hearing of the motions the plaintiffs announced a number of proposed alterations to the procedure which they now sought to adopt. These will be referred to below but principally involved a proposal that none of the target opt-in group would actually become named plaintiffs: rather they would simply continue to be the represented class even after opting in. [“the late procedural change”]

7 The motions raise a number of important questions both of substance as well as procedure including:

· a claim that the procedure contemplated for the continuance of the proceedings as representative proceedings would involve the courts imprimatur to a regime of champertous arrangements, the proposition being that the court would not allow this as a matter of public policy;

· whether the proceedings constitute an abuse of process;

· should the proceedings be continued as representative proceedings,

· questions as to:

- whether the defendants should by court process as by discovery or otherwise, be ordered to inform the representative plaintiffs of the identities of the represented plaintiffs; and

The general background

8 Detailed written submissions have been received from the parties to the motions. Whilst the stances taken by the parties on the material issues are of course diametrically opposed, the general background both in relation to the proceedings and in terms of the factual and legal background seem to have been clearly and fairly outlined by the plaintiff. The efficient course in commencing is to simply adopt the plaintiffs statement of that background:

“Background in terms of the proceedings

These proceedings are cognate with other litigation brought in this Court, the Federal Court and the High Court seeking the recovery of State and Territory taxes, styled as licence fees, on tobacco paid by retailers to wholesalers pursuant to legislation which the High Court held, in Ha v New South Wales (1997) 189 CLR 465, to be unconstitutional.

In the Roxborough litigation, in the Federal Court and the High Court, seven retailers recovered the licence fees they had paid to wholesalers. The wholesalers had not refunded the fees, nor had they passed them onto the State and Territory governments. Instead, they achieved windfall profits.

Subsequent to Roxborough, the major retailers of tobacco independently achieved compromises with their wholesalers to recover the fees they had paid, involving the repayment of substantial amounts of money. In connection with the compromise by Franklins with BATAS and Philip Morris, see per Hely J in Firmstones Pty Ltd v Davies [2003] FCA 113 at [51]-[53].

In further proceedings commenced in 2002, many thousands of (mostly) smaller retailers applied to recover the licence fees from the major wholesalers, British American Tobacco and Philip Morris. Those proceedings were organised and funded by two companies, the listed company Insolvency Management Fund Ltd (“IMF”), and Firmstones Pty Ltd (“Firmstones”).

Those proceedings were settled prior to judgment. In the case of the proceedings organised by IMF, IMF announced to the stock exchange that British American Tobacco had agreed to pay 105% of the amount claimed in respect of the 9,500 retailers for whom it acted, of which IMF retained 30%. The other settlements were also substantial.

There are three differences between the present proceedings and the proceedings heard in 2002. The first is that additional wholesalers have been sued. The second is that the limitation period for bringing such proceedings has now expired. The third is that the proceedings are claimed to be representative proceedings on behalf of a class of retailers the identities
of all of whose members are not known to the representative plaintiffs.”

Detailed factual and legal background

Each of the representative plaintiffs is a tobacco retailer located in an Australian State or in the Australian Capital Territory.

Each of the defendants is a tobacco wholesaler.

Each plaintiff sues each defendant in an action for moneys had and received to recover amounts paid by the plaintiff to the defendant during the period from 1 July 1997 to 5 August 1997, relying on the decision of the High Court in Roxborough v Rothmans of Pall Mall Ltd (2001) 208 CLR 516.

Legislative scheme

Until 5 August 1997 there existed in each Australian State and in the Australian Capital Territory a legislative scheme the effect of which was to impose a tax on the wholesale sale of tobacco products.

In an attempt to avoid the operation of section 90 of the Constitution (which made invalid any excise imposed by the States and Territories), that tax was imposed in the form of a “licence fee”. The tax was imposed by each State and Territory pursuant to the licensing legislation and was payable to the relevant revenue authority. See generally Ha v New South Wales (1997) 189 CLR 465. The legislation was the Business Franchise Licences (Tobacco) Act 1987 (NSW) (“NSW Act”); Tobacco Products (Licensing) Act 1988 (Qld) (“Qld Act”); Business Franchise (Tobacco) Act 1974 (Vic) (“Vic Act”); Business Franchise (Tobacco) Act 1975 (WA) (“WA Act”); Tobacco Products Regulation Act 1997 (SA) (“SA Act”); Business Franchise (Tobacco & Petroleum Products) Act 1984 (ACT) (“ACT Act”) and Tobacco Business Franchise Licences Act 1980 (Tas) (“Tas Act”).

· prohibit the sale of tobacco without a licence [Save that under the Qld Act there was no requirement to be licensed where tobacco was purchased from a licensee or had previously been purchased by another person from a licensee];

· provide for the grant on application of:

· require those licences to be renewed monthly on or before the 27th day of each month;

· provide for the “fees” to be paid for renewal of a wholesaler’s licence to be a fixed amount together with an ad valorem amount of 100% of the wholesale list price of tobacco products sold by the wholesaler (or members of its group) during the previous calendar month;

· provide for the “fees” to be paid for renewal of a retailer’s licence to be a fixed amount together with an ad valorem amount of 100% of the wholesale list price of tobacco products sold by the retailer (or members of its group) during the previous calendar month but disregarding any such tobacco products purchased from another licensee; and

· require each licensed wholesaler to issue an invoice for each wholesale sale showing:

- the amount of licence fee applicable to the tobacco products sold.

· separately identified and added to the invoiced price of tobacco products sold at wholesale by a licensed wholesaler to a licensed retailer;

· paid by the licensed retailer to the licensed wholesaler; and

· subsequently paid by the licensed wholesaler to the relevant revenue authority as “licence fee” on or before the 27th day of the month following the calendar month in which the wholesale sale occurred.

In States other than New South Wales, provided a retailer bought tobacco products from a licenced wholesaler, the retailer would not face the prospect of having to pay the same amount again as “licence fee” upon the renewal of its own retailer’s licence. This was by virtue of the requirement, in calculating the ad valorem amount of the licence fee for a retailer’s licence, to disregard tobacco product purchased from a licensee.

In New South Wales and the Australian Capital Territory, the same requirement existed but it was subject to the qualification that tobacco products purchased from a licensee could only be disregarded if the licensee had actually paid or subjected itself to liability to pay licence fee in respect of those products. See NSW Act, s41(3), ACT Act, s28(13).

Ha v New South Wales

On 5 August 1997 the High Court held the ad valorem component of the licence fee to be invalid as contrary to section 90 of the Constitution in Ha v New South Wales.

· each plaintiff was a licensed retailer; and

· each defendant was either a licensed wholesaler or a member of a group covered by a group wholesaler’s licence;

· each plaintiff purchased tobacco products from each defendant pursuant to an invoice which separately identified:

- in respect of certain defendants, the amount of licence fee referable to the sale; and

· each plaintiff paid the amount so identified including in every case a severable and separately identifiable amount referable to the tobacco licence fee to the defendant who had issued the invoice.

Were it not for the decision of the High Court on 5 August 1997, in the normal course the defendants (or a member of their group) could have been expected to have paid to the relevant State or Territory revenue authority upon renewal of their applicable wholesaler’s licence or group wholesalers’ licence:

· on or before 27 August 1997 the amounts identified as being for licence fee on invoices for sales of tobacco products occurring during the calendar month of July 1997;

· on or before 27 September 1997 the amounts identified as being for licence fee on invoices for sales of tobacco products occurring during the first five days of August 1997.

In the result, following the decision of the High Court on 5 August 1997, each defendant (or the group of which it was a member) simply kept the amounts in para 19(c) that had been paid to them.

The figures obtained by Firmstones pursuant to requests under the Freedom of InformationAct , are revealing. In New South Wales alone, amounts in excess of $90,000,000 would have been expected to have been remitted to the Office of State Revenue in each of July and August 1997. Yet only some $77,000,000 was remitted in July, and $18,000,000 in August 1997. The difference was retained by the wholesalers.

Roxborough

In Roxborough a group of seven retailers all located in New South Wales recovered from a tobacco wholesaler - one of the present defendants - in an action for moneys had and received, amounts identified in invoices as licence fee paid by those retailers to the wholesaler/defendant during the period from 1 July 1997 to 5 August 1997.

The action for money had and received was held to be available on the ground that money had been paid for a consideration that had failed.

Cauvin v Philip Morris Ltd

“… the High Court held that because the amount of the invalid tax was separately stated in each sales invoice rendered by a wholesaler to a retailer, it was a separate and severable part of the purchase price for the products sold. The Court held that the consideration in respect of that part of the purchase price had failed because the legislation under which it was payable was invalid. Accordingly, so the Court held, the law imposed on the wholesalers an obligation to make restitution to the retailers of the amounts of tax which the retailers had paid for purchases from 1 July to 5 August 1997.”

Roxborough

“[11] There was a standard form of invoice issued by the [wholesaler] to the [retailers]. It specified, in relation to each type of product sold, the wholesale price per 1000 cigarettes, being the price specified in the third column of the price list which, after adjustment for discounts, (which no doubt reflected the bargaining strength of a particular retailer), went to make up an "invoice sale subtotal". It specified separately the amount of the "tobacco licence fee". The combined amount of the invoice sale subtotal and the tobacco licence fee was then shown at the foot of the invoice as "net total". The net total was the amount payable by the retailer. …

[12] The part of the net total paid to the [wholesaler] by reference to the tax was thus shown separately from the wholesale price of the products sold. The nature of the tax, and the method by which it was imposed and collected, explain why that was done. The tax was an ad valorem tax on goods. The value of the goods had to be distinct from the tax. The tax was to be passed on to the retailer, and was to form part of the cost to the retailer of the goods. But in the documents which formed part of the ordinary course of dealing between the [retailers] and the [wholesaler], and by reference to which their contractual rights and liabilities are to be determined, the parties distinguished between wholesale price, tax, and net total cost to the retailer.

[13] The amounts paid by the [retailers] to the [wholesaler] in respect of the tax represented a distinct part of the consideration for the tobacco products purchased by the appellants. They were treated by both parties to each relevant contract as separate from the wholesale price of the goods sold, that price constituting the value by reference to which the amount of the tax was determined. And the tax, being a tax on goods, was of such a nature that it was not intended to be borne ultimately by either the [retailers] or the [wholesaler]. The tax increased the exchange value of the tobacco products in the hands of the retailers, but the initial value by reference to which the Minister's determination as to the basis of the tax operated was a wholesale price exclusive of the tax component. While the wholesale price, exclusive of the tax, was arrived at by the operation of forces of supply and demand in the market for tobacco products, and reflected the negotiated agreement of the parties, the tax was imposed externally by government.

…

[16] Failure of consideration is not limited to non-performance of a contractual obligation, although it may include that. The authorities referred to by Deane J, in his discussion of the common law count for money had and received in Muschinski v Dodds [(1985) 160 CLR 583 at 619-620], show that the concept embraces payment for a purpose which has failed as, for example, where a condition has not been fulfilled, or a contemplated state of affairs has disappeared [See Birks, An Introduction to the Law of Restitution, 1985, p 223]. Deane J, referring to "the general equitable notions which find expression in the common law count", gave as an example "a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it" [(1985) 160 CLR 583 at 619-620]. In the case of money paid pursuant to a contract, it would involve too narrow a view of those "general equitable notions" to limit failure of consideration to failure of contractual performance. In the present case, the amount of the net total wholesale cost referable to the tax was, from one point of view, part of the money sum each [retailer] was obliged to pay to obtain delivery of the tobacco products. But there was more to it than that. The tax was a government imposition, in the form of a fee payable under a licensing scheme. The nature of the scheme was such that the licensed wholesaler, or, if not the wholesaler, then the licensed retailer, would pay the amount referable to particular tobacco products. The [wholesaler], anticipating liability for the fee, required the [retailers], when purchasing products by wholesale, to pay an amount equal to the fee. The [retailers], in turn, had an interest in the [wholesaler] paying the fee to the revenue authorities, for they were thereby relieved of a corresponding liability. There was a purpose involved in the making of the requirement that the appellants pay the amounts described as "tobacco licence fee", and in the compliance with that requirement. To describe those amounts as nothing more than an agreed part of the price (or, to use the language of the parties, cost) of the goods, is to ignore an important aspect of the facts.

[17] In a contract for the sale of goods, the total amount which the buyer is required to pay to the seller may be expressed as one indivisible sum, even though it is possible to identify components which were taken into account by the parties in arriving at a final agreed figure. The final figure itself may have been the result of negotiation, making it impossible to relate a cost component to any particular part of that figure. Or there may be other factors which prevent even a notional apportionment. But there are cases, of which the present is an example, where it is possible, both to identify that part of the final agreed sum which is attributable to a cost component, and to conclude that an alteration in circumstances, perhaps involving a failure to incur an expense, has resulted in a failure of a severable part of the consideration. Here, the buyers, the retailers, were required to bear, as a component of the total cost to them of the tobacco products, a part of the licence fees which the seller, the wholesaler, was expected to incur at a future time, and which was referable to the products being sold. It was in the common interests of the parties that the fees, when so incurred, would be paid to the revenue authorities by the seller, and it was the common intention of the parties (and the revenue authorities) that the cost of the goods would include the fees. In the events that happened, the anticipated licence fees were not incurred by the seller. The state of affairs, which was within the contemplation of the parties as the basis of their dealings, concerning tax liability, altered. And it did so in circumstances which permitted, and required, severance of part of the total amount paid for the goods.

Wayne County Produce Co v Duffy-Mott Co Inc

"This is not a case where the item of the tax is absorbed in a total or composite price to be paid at all events ... This is a case where the promise of the buyer is to pay a stated price, and to put the seller in funds for the payment of a tax besides. In such a case the failure of the tax reduces to an equivalent extent the obligation of the promise."

[19] The same idea may be expressed by saying that, in the present case, the failure of the tax involved the failure of a severable part of the consideration for which the net total amounts shown on the invoices were paid.”

“[104] In the present case, there has been no failure in the performance by Rothmans of any promise it made. No question of repudiation by it of its contractual obligations arises. The question is that stated by Deane J in Muschinski set out earlier in these reasons. Is it unconscionable for Rothmans to enjoy the payments in respect of the tobacco licence fee, in circumstances in which it was not specifically intended or specially provided that Rothmans should so enjoy them? The answer should be in the affirmative. Here, "failure of consideration" identifies the failure to sustain itself of the state of affairs contemplated as a basis for the payments the appellants seek to recover [footnote omitted].”

The plaintiffs submission as to the principle of law established in Roxborough and its application

9 The plaintiffs’ submission is as follows:

The principle of law for which Roxborough stands is that an action for money had and received for failure of consideration lies in circumstances where the “consideration” for a particular payment has fallen away. The “consideration” is the mutually contemplated reason for the payment. It need not be contractual “consideration” in the sense of involving some promise on the part of the person to whom it is paid to use it in a particular way. It is sufficient that the mutually contemplated reason for the payment was that the payee would use the money paid in that way. If the amount paid is not used in the way mutually contemplated as the reason for the payment, it is not necessary to found recovery that there be found to have been a promise on the part of the person to so use it.

In applying that principle to the facts, the High Court in Roxborough found that the “consideration” for the payment by the tobacco retailers to the tobacco wholesaler of the amounts identified in the invoices as being in respect of licence fee was, to adopt the language of Cardozo J in Wayne County Produce “to put the seller in funds for the payment of tax”. That finding was based on the separate identification in each invoice of an amount in respect of licence fee looked at against the background of the legislative scheme.

Roxborough

inter alia

· determinations as to the calculation of value by the relevant Ministers pursuant to the legislation;

· the manufacturer’s and defendants’ published price lists; and

· the wholesale price list published during the relevant period in the “Australian Retail Tobacconist” (see Roxborough at [8], [9], [12] - [13]).”

Limitation Period

10 A question arises as to the date by which any proceedings became statute barred by the ordinary six-year limitation period. The plaintiffs contend that the six-year period began to run on 5 August 1997 upon the declaration by the High Court in Ha v The State of New South Wales on 5 August 1997 which would produce a cut-off date of 4 August 2003. As has already been pointed out, the amounts the subject of the proceedings in Roxborough were those which had been paid by the retailers to the wholesalers between 1 July 1997 and 5 August 1997.

11 Mr Macfarlan submitted that the likely cut off day was six years from 1 July 1997, namely 30 June 2003 which was the date when the several sets of proceedings now before the court were commenced. His submission was grounded upon the proposition that the legislation had always been unconstitutional and that the date of the High Court declaration played no particular part as a determinant of the commencement date of the causes of action.

12 The question does not require to be answered presently although it must be said that it seems to me likely that the position taken by Mr Macfarlan is the correct position. The two positions are only some 35 days apart.

Additional facts

13 The affidavits of Mr Adrian Firmstone include details giving adjectival information as to how it has come about that the instant proceedings have been commenced. Firmstone Pty Ltd has no involvement in tobacco retailing but apparently became aware of an opportunity arising from the prospects of success in proceedings such as this at some stage in 2002. It conducted a marketing exercise details of which are in evidence.

14 The affidavits disclose the following matters:

· that Mr Firmstone is the sole director of Firmstones Pty Ltd which trades as Firmstone and Feil Consultants [under cross-examination of Mr Firmstone the defendants established that he is ultimately the sole beneficial shareholder in Firmstones Pty Ltd];

· that Firmstone & Feil provide advice and assistance in relation to indirect tax matters, including with respect to the recovery for tobacco retailers of amounts referable to state tobacco licence fees paid by tobacco retailers to tobacco wholesalers;

· that Firmstone & Feil has an arrangement with Horwath GST Pty Ltd [“Horwath”] to pursue state tobacco licence fee refunds on behalf of tobacco retailers who purchased tobacco products during the Relevant Period. This arrangement commenced in or about March 2002;

· that Horwath is responsible for procuring tobacco retailers as clients such as by advertising and direct solicitation, and attending to all administrative matters such as maintenance of appropriate databases, communications with clients (including mailouts) and responding to client queries;

· that Firmstone & Feil is responsible for overall project management as well as strategic and technical issues, appointment of legal representatives, funding any legal proceedings and all dealings with tobacco suppliers and government organisations;

· that each party is to fund the costs incurred in their respective capacities, unless otherwise agreed;

· that Firmstone’s fee will be 331/3% of any tobacco licence fee refunds received by the plaintiffs, unless otherwise agreed;

· that Horwath maintains a client computer database which contains information relating to each of Firmstone’s client tobacco retailers and sets out particulars including;

· client identification number allocated by Horwath;

· contact name;

· donor name;

· donor type;

· business name;

· current address and contact details;

· 1997 business name;

· 1997 business address;

· type of business;

· suppliers from whom they purchased tobacco;

· customer number allocated by the supplier;

· purchases or estimated purchases of tobacco per supplier;

· tobacco licence fee refund claim amount per supplier;

· assessment of claim made by supplier;

· amounts recovered and paid to each client; and

· the status of a claim made to a supplier.

· that Firmstone and Feil has retained Robert Richards and Associates as solicitors for this project and is prepared to act in relation to the representative proceedings for the represented retailers who sign an “Opt-in” Notice and agree to the terms and conditions set out below:

(a) Firmstone & Feil will pay all costs associated with the representative proceedings, including the cost of any appeals;

(b) Firmstone & Feil will meet all costs orders made against the plaintiffs (including the represented retailers) in the representative proceedings;

(c) Firmstone & Feil will receive 33 1/3 % of any amounts recovered by the plaintiffs (including the represented retailers) from the defendants;

· that the subject terms and conditions are set out in the package of materials which it is proposed to send to the represented retailers following discovery by the defendants of documents disclosing the names, addresses and details of the tobacco sale transactions during the relevant period engaged in by the represented retailers;

· that the subject terms and conditions are similar to the terms and conditions of a company (Licence Fee Recovery Services Pty Ltd, known as Feesback) that acted to recover state tobacco licence fees in competition with Firmstone & Feil.

15 In the same affidavit Mr Firmstone deposes as follows:

“Firmstone & Feil presently has been retained by approximately 2100 persons or entities who fall within the class of represented retailers as defined in the representative proceedings on the terms and conditions referred to in paragraph 9 [Allowed as statement of subjective belief]. These tobacco retailers were identified through enquiries and advertising conducted by Horwath. However, based on my involvement in the recovery of amounts referable to state licence fees from tobacco wholesalers, I believe that there is a considerable number of additional persons and entities who comprise the class of represented retailers in the representative proceedings and who presently have not been given notice of the proceedings. Information and documents which disclose the names and addresses of the additional members of the class are in the possession of the defendants. In order to give all represented retailers an opportunity to elect whether to remain in the proceedings and to continue to be represented it is proposed, subject to approval by the Court, to apply for discovery from the defendants of documents which:

16 Mr Firmstone also deposes as follows:

“Firmstone & Feil, in conjunction with Horwath, will, together with the plaintiff’s solicitor in this matter, Robert Richards & Associates, be performing the tasks set out in (a) to (i) below in connection with the representative proceedings. Certain of the tasks referred to below have already been commenced:

(a) identifying the unnamed retailers represented by the plaintiffs in the representative proceedings. The principal method which the plaintiffs wish to use in order to identify the unnamed represented retailers is through discovery from the defendant as this information is in the possession of the defendant and not the plaintiff or Firmstone and Feil;

(b) subject to the directions of the Court, writing to both those retailers now known to Firmstone and Feil and who are our clients as well as to those unnamed retailers who we succeed in identifying in the future advising them that they are represented plaintiffs in the proceedings and asking them whether they wish to continue to be represented plaintiffs by signing the “Opt-in” notice in the form contained in annexure A;

(c) responding to questions raised by the represented plaintiffs in relation to the proceedings and the “Opt-in” Notice;

(d) receiving “Opt-in” Notices from the represented plaintiffs, checking that the Notices have been correctly completed, and arranging any necessary amendments to the Notices;

(e) collating the properly completed Notices, compiling a list by matter of those represented plaintiffs who have opted to continue to be represented by the plaintiffs in the proceedings and forwarding those lists and the completed “Opt-in” Notices to the Court and to the solicitors for the relevant defendants in each of the proceedings;

(f) communicating progress in relation to the relevant proceedings to the represented plaintiffs as occasion warrants;

(g) assisting in the retrieval and collation of the documentary evidence in the proceedings. In this regard, based on my experience in similar proceedings to recover amounts referable to tobacco licence fees, I consider that the plaintiffs’ case will be largely documentary and that the bulk of the pre-trial preparation will be concerned with collating and presenting the documentary material relating to payment by the plaintiffs of amounts referable to tobacco licence fees paid to the defendants and demonstrating that the circumstances of such payments were analogous or identical to those which existed in Roxborough ;

(h) communicating with members of the administrative and legal team assembled by Firmstone and Feil to conduct the proceedings; and

17 Mr Firmstone also deposes as follows:

“The Firmstone & Feil (“F&F”) Settlements

5. “On or about end September 2002, F&F, on behalf of The Shell Company of Australia Limited (“Shell”) and approximately 900 tobacco retailers, entered into an agreement with BATA to settle their tobacco licence fee refund claims and Deeds of Settlement and Release have subsequently been executed. The terms of the settlement are confidential.

6. On or about end September 2002, F&F, on behalf of approximately 900 tobacco retailers, entered into an agreement with PML to settle their tobacco licence fee refund claims and Deeds of Settlement and Release have subsequently been executed. The terms of settlement are confidential.

7. On or about mid October 2002, F&F on behalf of The Shell Company entered into an agreement with PML to settle certain of Shell’s franchisees’ tobacco licence fee refund claims and a Deed of Settlement and Release has subsequently been executed. The terms of the settlement are confidential.

Other Settlements

9. On or about November 2001, I was informed by Mr Romano Nenna, then General Manager, Taxation, of Coles Myer Ltd (“Coles”), that Coles had settled its claims against BATA and PML for tobacco licence fee refunds.

10. On or about June 2002, I was informed by Mr Michael Scott, Indirect Taxation Manager of Woolworths Limited, that Woolworths settled its claims against BATA and PML for tobacco licence fee refunds.

11. I am aware from my own knowledge that Franklins settled its tobacco licence fee refund claims against BATA and PML.

The Scope of Potential Refunds

12. From my reading of material in the public domain over the last 12 months, I believe that the aggregate of amounts collected by wholesalers of tobacco products and not remitted to the relevant State Revenue Office is in the range of $230 million to $250 million. For example, annexed hereto and marked D and E are two ALP News Statements dated 16 September 2002 and 23 September 2003 respectively in which the National ALP reports that an estimated $250 million is involved. In addition, in Cauvin v Philip Morris Limited [2002] NSWSC736, Windeyer J’s judgment at paragraph 12 records that the plaintiff’s statement of claim alleges a sum comprising of approximately $230 million is involved.

Engagement of Robert Richards & Associates

on the usual basis

18 Mr Firmstone also gave detailed evidence in his affidavit of 29 August 2003 of settlements achieved in retailers sets of proceedings in the past. In short Insolvency Management Fund Ltd [IMF] had reported that:

- its 7,500 retailer clients had settled their claims against Phillip Morris Ltd;

- its 1,000 retailers clients had settled their claims against British American Tobacco Australia on the basis of payments to be received of 105 percent of the claim of each retailer which would obtain 75 percent after IMF's Feil 30 percent;

19 During the cross-examination of Mr Firmstone he gave evidence as to the precise steps which had been taken in terms of such sparse contacts as had occurred with those persons who had already been retained by Firmstone. Typical of the materials sent to such persons are the documents in Exhibit PM1 which are annexed to this judgment as Appendix “B”.

20 It became clear during the course of this cross-examination [which took place prior to the late procedural change] that although there was a possible exposure to costs on the part of the persons who became named plaintiffs and although that exposure was to be indemnified by Firmstone, Mr Firmstone had not himself taken any steps to contact those persons to ensure that this risk had been communicated to them. His evidence was simply that he had advised Mr Proud, a Firmstone and Feil employee, to advise those persons of what was involved. Nor had he taken any steps to ensure that such persons invited to become named plaintiffs were aware of the prospect that they may have to give evidence in Court. Nor did he specifically instruct Mr Proud to that effect. He gave the following evidence:

“Q. In general terms, what you communicate, or you have your firm communicate, to people who wish to be represented by your firm is that they haven't got anything to lose. That's the substance of it, isn't it?
A. The letter says "no cost", correct

Q. Well, the question is asked in the letter "What have you got to lose?"
A. Yes" [Transcript 48]…

21 Mr Proud gave evidence of his telephone conversations seeking to ascertain whether particular persons were prepared to become the lead plaintiffs. Those persons were informed generally as follows:

all of our clients will be plaintiffs

Eventually all of our clients will be named as parties to the summons

22 Mr Firmstone gave evidence as to the reason why the present sets of proceedings were only commenced on arguably the last day of the limitation period. The reason was that Firmstone had hoped to settle prior to that. However the representative proceedings only came into Mr Firmstone’s mind when the clock started to run out and when it was clear that they were not going to settle the various proceedings. He denied that it was his intention to wait before commencing the proceedings until the end of the limitation period so those retailers who wished to pursue a claim for recovery could only do so through his firm. His more precise evidence was that it had not been his intention initially to bring about that result but that it had occurred to him at some stage in the process, that is to say at least by May or June 2003. He had brought about the proceedings for the purpose of stopping the clock for Limitations Act purposes. [Transcript 51]

23 Firmstone have agreed with Horwath GST to a 50/50 split of the 331/3% fee on what is recovered for retailers. Firmstone's proposal is to also receive 331/3% of the interest component forming part of any judgment.

24 It is common ground that the evidence before the court established that notwithstanding an aggressive marketing campaign a very large number is thought by Firmstone to comprise the target opt-in group who have not to date indicated any interest in participating in any way in the proceedings.

Retainer issues

25 There are a number of real concerns as it seems to me in terms of the retainer of Robert Richards & Associates in relation to these proceedings. The two relevant retainer letters are dated 6 April 2001 and 27 November 2002 [Exhibit PM 2/volume 5 of Exhibit PX page 1420]. Each of these letters is annexed to this judgment as Appendix “C”.

26 The earlier letter from the solicitors to Firmstone refers to a meeting with Mr Firmstone of 4 April 2001 and to an understanding by Mr Richards that Firmstone acted for a number of clients who were then in dispute with the Taxation Office in respect of various sales tax matters. Those matters are identified. The letter then advises that Mr Firmstone had asked Mr Richards to assume responsibility for the carriage of those matters and that Mr Richards had agreed to assume that responsibility and had filed relevant notices of change of solicitor. The letter then includes the sentence:

your client

27 The letter goes on to state Mr Richards understanding that Mr Firmstone and his staff would provide assistance to Mr Richards in respect of the matters and that in particular:

· you will be responsible for the day-to-day carriage of the matters. However you make copies of all documents (in respect of the matters) between yourself and your clients available to Mr Richards. You will inform me of all material oral communications between yourself and your clients;

· you will liase with your clients. I will not directly liase with your clients;

· you will provide sufficient staff to support any court hearings including attendance at court to assist Counsel and to liase with witnesses.

28 The letter advises that:

29 The letter of 27 November 2002 refers to the earlier letter and to the fact that Robert Richards and Associates since the date of the earlier letter had provided Firmstone with services in respect of other matters which because of their urgency were not subject to any written agreement. The letter confirmed that "you have engaged me on either your own behalf, on behalf of Firmstone's Pty Ltd or on behalf of your clients on-going (sic) basis in respect of other matters”. There is a confirmation that any such future matters undertaken by Robert Richards would be undertaken on the same terms as those detailed in the earlier letter.

30 During the course of his cross-examination Mr Firmstone was taken to the statement in the letter of 6 April 2001 from Robert Richards & associates: "You will liaise with your clients. I will not directly liaise with your clients". His evidence was that he did not intend any such arrangement in relation to these sets of proceedings; that this had related to other matters and was not part of his current arrangements with Mr Richards.

31 However the evidence before the court as to the retainer arrangement is documentary and the fact that his recollection as he gave evidence in the witness box, was that he did not intend that to be and that it was not the current arrangement in relation to these sets of proceedings is far from satisfactory proof as to the present position. Significantly: (1) his affidavit evidence in referring to his conversation with Mr Richards of mid-September 2002 had set out the relevant portion of this conversation in which the request and acceptance was for Mr Richards firm to be the project's solicitor "on the/our usual basis" and (2) he failed to give any evidence as to what was the arrangement, if any, said to be in place in relation to these sets of proceedings. Nor did Mr Richards give evidence about this matter. In my view the court is entitled on such a significant matter to infer that the all important documentary retainer letters prove the terms of the retainer. Such a matter could not be left at large.

32 One of the problems which it seems to me inheres in this arrangement, is the agreement/undertaking by the solicitors that they would not directly liase with "your clients" [here this can only be regarded as a reference to the plaintiffs and the target opt-in group in relation to the present proceedings]. There is some ambiguity as to who are the clients of Robert Richards, the earlier letter referring to Firmstone as "acting for your client" and as having engaged Robert Richards as principal and not as agent "for your clients" and yet later in the same letter referring to an understanding that Firmstone had notified "your clients" as to Robert's Richards involvement in the matters and that they had agreed to Robert Richards "representing them". Quite probably this amounts to Robert Richards being retained both by Firmstone and by the plaintiffs and the target opt -in group in relation to the present proceedings. It seems that there were two groups of clients in mind when the retainer letter was drafted and sent.

33 In any event and insofar as the retainer letters concern Robert's Richards being retained to act on behalf of the plaintiffs and the target opt-in group, to my mind it is an extraordinary proposition that in this particular situation a firm of solicitors accepts a retainer upon the basis that they will not directly liase with their clients. Problems which come to mind in relation to such an arrangement would include the following:

· Where a conflict-of-interest may arise as between interests of Firmstone and the interests of the plaintiffs or the target opt-in group it would seem inimical to the interests of the plaintiffs or the target opt-in group for the solicitor acting for both groups of parties to permit Firmstone alone to liase with the plaintiffs or the target opt-in group. Such a conflict-of-interest may conceivably arise for various reasons including, for example, an occasion when an offer may be made by a group of relevant defendants to settle proceedings on the basis of payment in kind rather than payment in cash. Whilst it is all very well to suggest that Firmstone would not be disadvantaged in that form of settlement and would take its share of the proceeds by way of 331/3% of the value of the payment in kind, all sorts of problems relating to how that value would be ascertained could obviously arise. Likewise when the questions of the actual mode of running the proceedings would arise, it would be in the interests of Firmstone to keep the expenditure on legal fees to a minimum whereas the interests of the plaintiffs and the target opt-in group may very well be to prepare the case comprehensively even though such expenditure on legal fees may be involved. This particular type of issue would likely concern whether each of the individual plaintiffs and the target opt-in group was to give evidence presumably by statement. I reject Mr Gageler’s submission that the interests of Firmstone on the one hand and of the plaintiffs on the target opt-in group on the other hand are “exactly the same” or “coincident”.

· The well-known obligations of solicitors in relation to communicating to and dealing with their clients to ensure that the discovery processes are understood and complied with may very well be impeded where the solicitors have undertaken not to directly liase with the clients for or on behalf of whom they act.

34 It is not possible to generalise in relation to circumstances in which solicitors may make arrangements to deal with clients through agents, with integrity and probity and consistently with their professional obligations, including obligations to the Court. The court is here concerned with a very specific set of circumstances which throw up the particular problems already referred, to bearing in mind the significance of a firm of solicitors giving proper consideration to possible conflicts of interest which can sometimes arise where those arrangements are concerned.

35 The direct significance of these concerns go to a proper understanding of all parameters of the commercial transaction engaged in by Firmstone in terms of its promotion of these proceedings. Mr Firmstone under cross-examination agreed with the proposition that it was an accurate description of his involvement in the proceedings that they constituted a speculative investment by him in other persons litigation. [Transcript 72.45]

Representative Proceedings

36 It is convenient to examine the earlier and then the more recent history in terms of the recognition of representative proceedings. Here again the Court has been much assisted by the submissions received from all parties many of which are simply adopted in what follows.

· Representative proceedings have been recognised by the law for more than 8 centuries. Professor Yeazell, whose works were cited with approval by McHugh J in Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398 at 428 and 429, wrote in From Medieval Group Litigation to the Modern Class Action (1987), p38:

“About 1199, Martin, the rector of Barkway, sued the parishioners of Nuthamstead, a Hertfortshire village, in a suit involving his entitlement to certain offerings and theirs to daily services of mass [citation omitted]. He sued them neither as a corporation nor as individuals; the suit instead spoke of “the parishioners” as a group, with a few giving testimony apparently on behalf of all.”

· In the succeeding centuries, representative proceedings came to be recognised in chancery. With the enactment of Judicature legislation, the Rules of Procedure of the new Supreme Court of Judicature, which reflected Chancery practice, were extended to proceedings at common law and in equity. See Carnie at 415, where Toohey and Gaudron JJ observed that Pt 8 r 13 is the direct descendant of those English rules.

· The more recent history is summarised by Lord Macnaghten in Duke of Bedford v Ellis [1901] AC 1 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."

· Parker’s Practice in Equity (1930) stated (at 43):

“The general rule of the Court of Chancery, apart from statutory modifications, was that all persons interested in the subject of a suit should be made parties. One or more plaintiffs, however, if belonging to a large class having a common interest in the relief sought, might sue on his or their own behalf and on behalf of the rest of the class, and one or more of a large class having a common interest in resisting a plaintiff’s claim might be made the only defendant or defendants as representing the other members of the class, if in either case the class was so numerous as to render the joinder of all of its members impracticable or inconvenient. [citations omitted]. This practice is still in existence. The statement of claim should allege, in effect, that the suit is brought by or against (as the case may be) one or more persons as representing a class of persons too numerous to be joined individually.” [citations omitted]

· In Carnie at 429, McHugh J said, of the cases in the eighteenth and nineteenth centuries, that:

“In many cases, the Court allowed persons with the same or common interest to be joined in a representative action only because the defendant insisted that the suit was bad for want of parties and it was inconvenient to make all interested persons parties to the action. In some cases the represented parties had consented to and encouraged the plaintiff to bring the action as a representative action. But in other cases the Court allowed the plaintiff to represent persons with similar interests whether or not they consented or even knew of the action.”

· Throughout their history, what was recognised was that:

(a) proceedings could be commenced as representative proceedings (either by representative plaintiffs or against representative defendants); and

Threshold Issues

37 Amongst the plethora of submissions addressed to the Court by the several defendants it can be seen that there are certain threshold issues which go to the heart of:

· whether the proceedings should be stayed as an abuse of process or dealt with by the court making an "otherwise order" under Part 8 rule 13 (1); and/or

· whether or not the proceedings may be properly described as representative proceedings or permitted to proceed as representative proceedings within the meaning of Part 8 rule 13 (1).

38 Convenience dictates that these matters be addressed immediately.

Champerty/Abuse of process

39 While champerty and maintenance are no longer crimes or civil wrongs (s 4 of the Maintenance, Champerty and Barratry Abolition Act 1993 (NSW) [“the New South Wales Abolition Act”]), the common law rule that a contract which is so characterised is contrary to public policy or otherwise illegal endures (see s 6 of that Act which expressly saves the application of "any other law as to the cases in which a contract is to be treated as contrary to public policy or as otherwise illegal"). Thus various statutory exceptions exist. See, for example, statutory powers of disposal given to a receiver to dispose of a company’s cause of action under the Corporations Act 2001 (Cth): s 420(2)(b) and (g) of that Act.

40 Provisions similar to section 6 of the New South Wales Abolition Act are contained in section 32(2) of the Wrongs Act 1958 (Vic.) and section 11(3) of the Criminal Law Consolidation Act 1935 (S.A.).

41 The tort has not been abolished in Queensland (see Elfic Ltd v Macks (2001) 181 ALR 1), Western Australia, Tasmania or the Australian Capital Territory.

42 The relevant provisions in New South Wales, Victoria and South Australia mirror legislation in the United Kingdom to the same effect: sections 16 and 17 of the Criminal Law Act 1967. In Trendtex Trading Corporation v Credit Suisse [1982] AC 679 at 695, Lord Wilberforce said of those provisions:

43 The position in Australia is the same: Magic Menu Systems Pty Limited v AFA Facilitation Pty Limited (1997) 72 FCR 261 at 267-268; Re William Felton & Co. Pty Limited (1998) 145 FLR 211. The preservation of this principle of illegality necessarily involves the preservation of the public policy underlying that principle: Roux v Australian Broadcasting Commission [1992] 2 VR 577 at 605.9; Smits v Roach (2002) 55 NSWLR 166 at 188.5; Re: Movitor (1996) 64 FCR 380E.

44 Plainly enough the Court has jurisdiction to stay or dismiss proceedings where the proceedings constitute an abuse of process by reason of their champertous nature or because they savour of maintenance: Smits v Roach (2002) 55 NSWLR 166 at 181-188; Elfic Ltd v Macks (2001) 181 ALR 1 at 12 [special leave was refused by the High Court on 19 March 2002: (2002) 23(6) Leg Rep SL4]; Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261 at 267-268; Re Tosich Constructions Pty Ltd; Ex parte Wily (1997) 143 ALR 18 at 31; Faryab v Smyth [1998] EWCA 3503; Stocznia Gdanska SA v Latreefers Inc (No 2) [2000] All ER (D) 148 and R (Factortame Ltd) v Secretary of State for Environment [2002] 4 All ER 97.

45 Maintenance consists of "improperly stirring up litigation and strife by giving aid to one party to bring or defend a claim without just cause or excuse”: Re Trepca Mines Limited (No 2) [1963] 1 Ch 199 at 219.

46 Champerty is a particular kind of maintenance, namely maintenance of an action in consideration of a promise to give the maintainer a share of the proceeds or subject matter of the action: Trendtex v Credit Suisse [1982] AC 679 at 694 per Wilberforce LJ quoting Halsbury's Laws of England. Champerty is "one species of maintenance for which the common law rarely admits of any just cause or excuse": Re Trepca Mines Limited (No 2) [1963] 1 Ch 199 at 219.

47 The Full Court in Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261 at 267-268 put the matter as follows:

"Maintenance, which consisted of the assistance or encouragement of a party to an action in which the maintainor had no interest, was regarded by the English law, from an early time, as a crime punishable by fine or imprisonment. It later became recognised as a civil wrong. (See generally Blackstone's Commentaries (5th ed), Book IV, p 134.)

Champerty was a species of maintenance, on terms that the maintainor and the plaintiff would share in the outcome of the action. It was especially feared because the champertor's financial stake in the litigation provided a strong temptation to suborn witnesses and pursue worthless claims (see Barratry, Maintenance and Champerty , New South Wales Law Reform Commission Discussion Paper 36, May 1994). These concerns have been reiterated in Re Trepca Mines Ltd (No 2) [1963] Ch 199, Trendtex Trading Corporation v Credit Suisse [1980] 1 QB 629 at 653 and in more recent cases, to which we shall refer.

It may be said that public policy considerations shaped the attitude of the Courts towards agreements to maintain litigation. The concern early expressed was that the remedial processes of the law might be used as tool of oppression, as indeed they were by powerful nobles and officers (NSWLRC Discussion Paper, par 2.9 and see Blackstone , p 134). What maintained actions were thought likely to produce, and which was inimical to the public interest, altered over the course of time and with changing social conditions, as did the recognition of interests which were sufficient to justify interference in another's litigation by supporting it : see Hill v Archbold at 694; Trendtex ; Condliffe v Hislop [1996] 1 WLR 753 at 759; [1996] 1 All ER 431 at 437 and Roux v Australian Broadcasting Commission [1992] 2 VR 577 at 607 . It may now be observed, for example, that concerns expressed earlier this century, as to the potential for the maintenance of actions to give rise to an increase in litigation, might now be considered of lesser importance than the problems which face the ordinary litigant in funding litigation and gaining access to the Courts . In the latter respect, by the time Martell v Consett Iron Co Ltd [1955] Ch 363 came before Danckwerts J, his Honour was able to observe that support of legal proceedings based upon a bona fide common interest, financial or philosophical, must be permitted if the law itself was not to operate as oppressive. The Courts today, in our view, are likely to take an even wider view of what might be acceptable, particularly if procedural safeguards are present or able to be applied .

There does not however seem to have been any detailed discussion or debate as to these matters and, relevant to this appeal, as to whether champerty will now be tolerated, and if so, on what conditions. We do not suggest that practices in the United States of America would necessarily, or even likely, be viewed as desirable. On the other hand, cases in the United Kingdom such as Grovewood Holdings plc v James Capel & Co Ltd [1995] Ch 80 and McFarlane v EE Caledonia Ltd (No 2) [1995] 1 WLR 366 proceed upon the basis that such agreements are prima facie unlawful. In any event, this appeal does not, for reasons to which we later refer, require the resolution of these larger questions.

Both the offence and tort of maintenance, and of champerty, were
abolished in the United Kingdom in 1967, shortly after judgment was delivered in Hill v Archbold and following a report to the Parliament by The Law Commission ( Proposals for Reform of the Law Relating to Maintenance and Champerty ) in 1966. They were abolished in Victoria in 1969, in South Australia in 1992 and in New South Wales in 1995 by the Maintenance and Champerty Abolition Act 1993 (NSW) . The latter legislation was intended to pave the way for the provision of contingency
fees in that State. In Queensland solicitors are now permitted to fix their fees by an agreement which may stipulate for a percentage (s 23 of the Legal Practitioners Act 1995 (Qld) ). Maintenance and champerty however remain torts actionable in Queensland (see J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [1984] 2 Qd R 413), although they were never included as offences in the Criminal Code Act 1899 (Qld) .

It is plainly unsatisfactory that maintenance of litigation remains a civil wrong in some, but not all, states in Australia. Whether there remain valid reasons for the retention of the tort at common law has not been addressed, although it has long been considered obsolete and in Clyne v Bar Association (NSW) (1960) 104 CLR 186, the High Court suggested that it may be necessary to consider whether it ought now be so regarded. Mason CJ, in Halliday v Sacs Group Pty Ltd (1993) 67 ALJR 678 at 680-681 also appears to have assumed that the status of the tort was questionable.

That passage was referred to with approval by the Court of Appeal in Sayers v Merck SmithKline Beecham plc [2003] 3 All ER 631 at [2].

146 The defendants' submissions in relation to discovery generally raised the same matters. The submissions put by Mr Jackman SC who appeared for the British American Tobacco Australia Ltd parties included the following in this respect:

· documents which record the identity of persons who may be in the class described by the plaintiffs in paragraph 2 of their summonses;

· documents which evidence purchases of tobacco by those persons in respect of which those persons may seek to recover part of the purchase price; and

· documents which will assist to determine the potential quantum of a class members' claim.

The defendants do not oppose the application for such discovery insofar as it concerns the plaintiffs (that is Mr and Mrs Hall). The defendants oppose the application insofar as it relates to other persons who may be members of the class.

Insofar as the documents concern other putative class members, the documents are sought for the purpose of enabling Firmstones to contact those persons: Firmstone affidavit sworn 8 August 2002, para 12.

Firmstones then propose to contact those persons and send them an "opt-in" notice inviting those persons to consent to these proceedings being continued on their behalf.. The defendants ought not be required to provide the discovery sought for the following reasons.

Discovery must be relevant to a fact in issue

Part 23 rule 3 of the Supreme Court Rules limits the availability of discovery to documents which could rationally affect the assessment of the probability of the existence of a fact in issue: National Australia Bank v Idoport [2000] NSWCA 8 at [19 ].

Further, as a general rule, discovery can only be ordered as between parties to the action: James Nelson & Sons Ltd v Nelson Line (Liverpool) Ltd [1906] 2 KB 217 and who are formally at issue in the proceedings: Buxton & Lysaght Pty Ltd v Buxton [1977] 1 NSWLR 285 at 287.

The importance of the requirement that discovery be confined to matters which are actually in issue and between parties to a proceeding is reflected in the general rule of practice that a party will not be granted discovery before the close of pleadings other than in an exceptional case: Latec Finance Pty Ltd v Jury [1960] 77 WN (NSW) 674 at 676.

The documents sought cannot rationally affect the probability of the existence of any fact in issue between the named plaintiffs and the defendants. Indeed, the issues in dispute will not be defined until the pleadings and the class have closed; a point made by the plaintiffs in paragraph 33 of their overview written submissions.

The plaintiffs (or perhaps more correctly Firmstones) seek discovery not as to the issues which are in dispute, but for the purpose of determining the parties who will be making a claim. It follows from the "opt-in" procedure proposed by the Firmstones that, until persons have elected to "opt-in" to the proceedings and the class is closed, potential class members are not clients of Firmstone PL (since it is a condition of entry to the class that they agree to become clients of Firmstone PL), and not to be entitled to any benefit of the proceedings. There is no meaningful sense in which they can be said to be parties to the proceedings or to have joined issue with the defendants.

The documents sought have no relevance to the cases of the named plaintiffs. They know who they are. The documents are in fact sought for the purposes of the litigation funder rather than the named plaintiffs. Firmstones is certainly not a party to these proceedings and is therefore not entitled to any discovery.

Whilst exceptions to the general principles described above have developed, these exceptions operate to assist plaintiffs who seek to ascertain the identity of wrongdoers. See, for example, the preliminary discovery procedures in Part 3. There is no reason in principle to extend those principles to assist a plaintiff to identify other potential plaintiffs.

147 There is a particular difficulty in terms of the form of the proposed discovery and interrogatories. This was highlighted on grounds of futility in the submissions of Mr Insall SC appearing for a number of the defendants in the IGA Distribution Group as follows:

The documents sought in the motion are all linked to the term “represented retailers” which is defined in Schedule A to mean the persons defined in paragraph 2 of the Plaintiffs’ contentions in the Summons. That paragraph defines “represented retailers” as those persons who during the relevant period were retailers of tobacco products, purchased tobacco products from the Defendants and “paid to the defendant the amount of licence fee referable to the sales as separately identifiable and severable parts of the consideration payable in respect of each sale”.

It is the Defendants’ position that there are no retailers who purchased tobacco products during the relevant period who did pay to the Defendants “the amount of licence fee referable to the sales as separately identifiable and severable parts of the consideration payable in respect of each sale”. In particular, unlike the position in Rothmans , (where the critical factor was the fact that wholesalers included, as part of the total price payable in relation to each tobacco product, a specific sum payable in respect of licence fees), all but one defendant issued invoices which contain no reference to licence fees at all.

148 These submissions are of substance for the reason that the plaintiffs would not be entitled to require in the form of the proposed discovery or of the proposed questions by way of interrogation, that the defendants effectively be compelled to carry out a task which is imprecise. It would have been necessary to reformulate, if this was possible, the precise description of the documents sought to be identified. That reformulation could not leave it to the defendants to effectively answer a mixed question of fact and law in order to be able to comply with the court’s order.

149 For the reasons given above it is strictly unnecessary for the court to deal with the closely argued question of the court’s jurisdiction to make the orders for discovery or for answers to interrogatories sought by the plaintiffs. However in deference to the careful submissions it is appropriate to address the issue.

150 My own view is that this question requires to be approached in light of the matter commented upon in Carnie [cf Mason CJ, Deane, Dawson JJ at 404] concerning the absence of a detailed legislative prescription by statute or rule of court regulating the incidence of representative action:

151 The purpose of the rule is to facilitate the administration of justice by enabling parties having the same interest to secure a determination in one action rather than in separate actions.

152 If one puts to one side the problems identified above in terms of champerty, abuse of process and the above described problems of form, had the plaintiffs been able to satisfy the court in terms of the "same interest" issue, I would have been of the view that the plaintiffs were entitled to mobilise discovery or interrogatories in terms of a court order that the relevant defendants provide the information necessary to be known to the plaintiffs in order to ascertain the members of the class. As Toohey and Gaudron JJ commented in Carnie [at 422] the situation here is one in which the defendants all have the means of knowing better than anyone else who were the members or likely to have been the members of the relevant class. I do not gainsay the proposition which was indeed conceded by the plaintiffs, that there is no material issue in these proceedings to which it could be suggested that this form of discovery of or orders for interrogatory is could go. However a combination of the following matters:

· the inherent jurisdiction of the Supreme Court;

· the overriding purpose rule; and

· the lack of a detailed legislative prescription by statute or rule of court regulating the incidence of representative action with a consequential need for the court to give such directions as are necessary and appropriate to permit the representative action procedure to be more than an arid procedure;

a proper case

153 The court requires to stand back from each particular application of the rules in order to ensure that the discretions are appropriately exercised in the due administration of justice. Representative proceedings represent a class of their own. And the difficulties sometimes experienced in identifying the members of a class sought to be represented require to be recognised and dealt with, always bearing in mind the real-world situation that when the parties who do have the same interest are so numerous that one can never 'come at justice' if everyone interested was made a party, representative proceedings are by their nature beneficial furthering the interests of justice.

Discretionary considerations

154 The defendants adduced evidence to support the proposition that they would encounter considerable difficulties in being ordered to furnish the discovery sought or to answer the interrogatories proposed. For obvious reasons it is unnecessary for the court to deal with this evidence adduced under cover of the proposition that the court in its discretion should refuse to make the orders sought.

The proposed substitution as representative plaintiffs in the Adams proceedings [50074/03]

155 The Summons in the Adams proceedings names the first and second plaintiffs as Mr and Mrs Adams. At the time when the Summons in the Adams proceedings was filed Philip Morris Limited had already settled with those plaintiffs. Hence a discrete question was said to rise namely whether or not Mr and Mrs Grey may be substituted as the representative plaintiffs in these proceedings 50074/03.

156 The matter was argued in the absence of the parties being aware of the approach the court would take on the ‘same issue’ questions. The holding now being against the plaintiffs, the parties should be given an opportunity to further address on the substitution application. Pending that address, in what follows I approach the issue on the hypothetical basis that the proceedings when commenced, were properly commenced within the meaning of Part 8 Rule 13.

157 The written submissions by the plaintiffs put the matter as follows:

80. Pt 8 r 7 provides that proceedings shall not be defeated by reason of the misjoinder of a party or the non-joinder of any person as a party and that the Court may in any proceedings determine the issues or questions in dispute so far as they affect the rights and interests of the party.

81. Pt 8 r 8 provides for the joinder of persons as parties where the joinder is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated upon. Pt 8 r 9 provides for the Court, on application by any party or of its own motion, to order that a party cease to be a party and to make orders for the further conduct of the proceedings where inter alia the party has ceased to be a proper or necessary party.

82. Pt 8 r 10 provides that the Court may make consequential orders for the addition, removal or re-arrangement of parties and may make orders for the further conduct of the proceedings where inter alia the interest of a party passes by assignment, transmission, devolution or otherwise to another person. The Court may make such orders on application by a party or by a person to whom the interest or liability passes or of its own motion. An amendment made pursuant to an order under Pt 8 r 10 shall, unless the Court otherwise orders, relate back to the date of filing the originating process: (SCR, Pt 8 r 11(4)).

83. Pt 8 r 11(1) provides that without limiting the generality of the powers of the Court under Pt 8 rr 8-10, orders under those rules for the further conduct of the proceedings may include orders relating to inter alia amendment and the substitution of one party for another party or a former party.

84. Pt 8 r 11(2) provides that where the Court orders that a party be substituted for another party or a former party, all things done in the proceedings before the making of the order shall, unless otherwise ordered, have effect in relation to the new party as those things had effect in relation to the old, but entry of appearance by the old party shall not dispense with entry of appearance by the new.

85. Pt 8 r 11(3) provides that where in any proceedings a party is added otherwise than pursuant to an order under Pt 8 r 10 or Pt 20 r 4(3) (see below) the date of commencement of the proceedings so far as concerns him shall be (in the case of a plaintiff) the date on which the amendment adding him as a party is made.

86. Pt 20 of the SCR deals with amendments to inter alia an originating process such as a Commercial List summons. Pt 20 r 1(1) provides that the Court may, at any stage of any proceedings, on application by any party or of its own motion, order that any document in the proceedings be amended, or order that any party have leave to amend any document in the proceedings, in either case in such manner as the Court thinks fit. Part 20 r 1(2) provides that all necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, or of correcting any defect or error in the proceedings, or of avoiding multiplicity of proceedings.

87. In the absence of any contrary order or provision (such as Pt 8 r 11(3) referred to above) an amendment is regarded as taking effect from the date of the original pleading or originating process, rather than from the date the amendment is actually made.

88. Pt 20 r 1(3A) provides that an order may be made, or leave may be granted, under Pt 20 r 1(1) notwithstanding that the effect of the amendment is, or would be, to add or substitute a cause of action arising after the commencement of the proceedings, but in such a case the date of commencement of the proceedings, so far as concerns that cause of action, shall, subject to Pt 20 r 4, be the date on which the amendment is made.

89. Section 81 of the Supreme Court Act provides that irregularities, including a failure to comply at any stage in the course of or in connection with any proceedings with the requirements of the Supreme Court Act or of the Rules shall be treated as an irregularity and shall not nullify the proceedings or steps taken or documents in the proceedings. The Court also has a discretion under s 81(1)(b) to exercise its powers to allow amendments and to make orders dealing with the proceedings generally. Section 81(1)(3) provides that the Court shall not set aside any proceedings or any step taken in any proceedings or inter alia any document in the proceedings on the ground of a procedural irregularity as described in s 81(1) on the application of any party unless the application is made within a reasonable time and before the applicant has taken any fresh step after becoming aware of the irregularity.

Characterisation of procedural step

90. In order to determine which provision or provisions as summarised above apply when replacing the representative plaintiff in the proceedings it is necessary to characterise the procedural step which must be taken in relation to the summons and/or the proceedings generally. This question was considered by the English Court of Appeal in Moon v Atherton [1972] 2 QB 435 where the Court concluded that the necessary step was a formal amendment to the writ which involved inserting in the writ the name of the former unnamed plaintiff on whose behalf representative proceedings had been commenced, in place of the named plaintiff, under the equivalent English Court rule to SCR Part 20 r 1(1).

91. In Moon v Atherton a newly built block of 12 flats was leased in identical terms to the 12 tenants. They agreed to pay one-twelfth of any necessary structural repairs, including the roof. Serious defects developed in the roof. It cost £5,000 to repair it to which each tenant contributed his or her share. A representative action under RSC Order 15 r 12 (which was in substantially identical terms to Pt 8 r 13, SCR) was brought against the architect in the name of one of the tenants on behalf of herself and 10 others, the remaining (12th) tenant being unwilling to join in. Later, the named plaintiff together with nine of the eleven persons represented by her decided to discontinue the action because of the cost of the proceedings. The 11th (unnamed) person represented by the named plaintiff sought leave to be substituted as the person named as plaintiff in the writ by way of amendment to the writ under RSC Order 15 r 5 (the equivalent rule to Pt 20 r 1, SCR); or alternatively to be substituted as a party under RSC Order 15 r 6 (the equivalent rule to Pt 8 r 8, SCR).

Price v Rhondda Urban District Council

What then is to happen when the named plaintiff decides to withdraw? It seems to me that then it is open to any one of those whom she represents to come forward and take the place of the named plaintiff. The case comes within Ord. 15, r. 6, which enables a party to be added whose presence is necessary. It also comes with Ord. 20, r. 5(1), which says:

‘… the court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct’.

In those rules the word ‘party’ is used in the same sense as it is in the definition in section 225 of the Supreme Court of Judicature (Consolidation) Act 1925, which says that:

‘Party’ includes every person served with notice of or attending any proceedings, although not named on the record. So it includes one of the persons represented, even though not named in the writ.

In my opinion those rules enable the court to amend these proceedings by inserting the name of Mrs Art instead of the named plaintiff. This is necessary in order to do justice. If it were not so, the named plaintiff might discontinue, or the defendant might settle with the named plaintiff, and then leave the other unnamed plaintiffs out in the cold. It might be too late for them to issue a new writ because of the statute of limitations. That cannot be right. It seems to me that if, in a representative action, the named party falls out for any reason, that court has ample power to substitute one of the unnamed parties as the plaintiff, and to bring him in as at the date of the issue of the original writ.”

Application of Moon v Atherton to present facts

93. As was the case in Moon v Atherton , the unnamed plaintiffs in the tobacco retailer representative proceedings are bound by the result of the proceedings. The proposed “opt-in notice” to be sent to these persons is designed to allow them to indicate their consent to the representative proceedings being continued because they will be bound by the judgment. There is no equivalent definition of “party” in the SCR or Supreme Court Act to the definition contained in s225 of the Supreme Court of Judicature (Consolidation) Act 1925 referred to by Lord Denning in Moon v Atherton requiring that notice be given to such persons. It follows from principle that the unnamed plaintiffs in the representative proceedings are already “parties” to those proceedings.

94. Based on the reasoning in Moon v Atherton it follows that the Court should grant leave in the Adams proceedings to amend the summons pursuant to SCR, Pt 20 r 1(1) by inserting the name or names of the previously unnamed plaintiffs (Mr and Mrs Grey); or alternatively give leave to substitute the Greys for the named plaintiff pursuant to Part 8 rr 8, 9 and 11. Although Lord Denning in Moon v Atherton referred at one point in his judgment to “adding” a party, the correct analysis based on his reasoning is that the unnamed plaintiff who is already a party (and has commenced the action - see further below) is being substituted for the representative plaintiff.

(a) the amendment to the summons amounts to the substitution of one party for a party or former party (SCR, Part 20 r 1(1) and Part 8 r 11(1)(d));

(b) the amendment dates back to the time of filing of the summons; and

158 The parties for whom Mr Macfarlan appears to put the manner as follows in their written submissions:

1. There is no dispute that at the time the Adams Proceedings were commenced, Mr. and Mrs. Adams had settled their claim and did not have a cause of action against the defendant: Paragraphs 16-20 of the Affidavit of Mr. Proud sworn 11 August 2003.

2. Those proceedings should therefore be dismissed pursuant to Part 13 Rule 5 of the Supreme Court Rules. However, the plaintiffs seek orders substituting the Greys as plaintiffs in the Adams Proceedings.

3. The Court’s power to order substitution of a party is contained in Part 8 Rule 11 of the Rules.

4. Part 8 Rule 11(3) provides that where the Court orders the substitution of a plaintiff, the date of commencement of proceedings (so far is it concerns that plaintiff) is taken to be the date of the order. In other words, a substituted plaintiff is not entitled to thereby defeat a defence under the Limitation Act.

5. The defendant’s defence under the Limitation Act is clear, as it is now more than 6 years since the end of the period from 1 July 1997 to 5 August 1997 during which relevant payments are alleged to have been made (Affidavit of Mr. Firmstone sworn 8 August 2003 (the “ Firmstone Affidavit ”) paragraph 5). The substitution of plaintiffs would therefore be futile and should be refused.

6. The plaintiffs also seek orders pursuant to Part 20 Rule 1, which provides for amendment to pleadings. In certain circumstances, amendments may be made with effect from the date proceedings were commenced (as opposed to the date of amendment), however this is not such a case: Part 20 Rule 4(1).

(a) Where there has been a mistake in the name of a party but where that mistake was not such as to cause reasonable doubt as to the identity of the person intended to be made a party: Rule 4(3);

(b) Where a plaintiff becomes entitled to sue in any capacity: Rule 4(4); and

8. None of those rules applies in this case. If the amendment were to be granted pursuant to Part 20, as sought, the date of the amendment would therefore be governed by the common law rule in Weldon v Neal (1887) 19 QBD 394 and the date of the Grey’s cause of action would therefore be the date of the order. On any view, that proceeding would be time-barred. An amendment to allow it to be pleaded would be futile and should therefore be refused.

Dealing with the issue

159 Clearly the plaintiffs contentions in describing the parties identify the plaintiffs as Mr and Mrs Adams who are said to bring the proceedings on behalf of themselves and all other persons who satisfy certain nominate criteria but excluding persons “who have agreed to release or have released the defendant from the alleged liability to make the subject payment”. Equally clearly Part 8 rule 13 (1) where numerous persons have the same interest in proceedings, permits one or more of them to commence the proceedings as representing all or as representing all except one or more of them.

160 It is not suggested that the proceedings are a nullity so far as the claims by Mr and Mrs Adams are concerned. The proposition is that the defendants have a sound defence to those proceedings insofar as Mr and Mrs Adams claims are concerned. But the more significant issue is as to whether or not the proceedings when commenced, were properly commenced within the meaning of Part 8 rule 13 (1).

161 The plaintiffs first submission is that under Part 8 rule 13 (1) it was only necessary for the plaintiffs to have the same interest as members of the identified class. The proposition is that Mr Adams had that same interest because he had the very same cause of action albeit that there was a complete defence to that cause of action. In my view the submission should be rejected.

162 The plaintiffs’ next submission was that even if the proceedings were not regularly commenced, the irregularity is not one which affects the representative nature of the proceedings. Reliance is placed upon Cameron v National Mutual Life Association of Australasia Limited (No.2) [1992] 1 Qd R 133, a decision of the Full Court of the Queensland Supreme Court. In Cameron a writ commencing representative proceedings was struck out by the Master below on the ground that it did not comply with Order 3 rule 10, the applicable rule authorising representative proceedings in the Queensland Supreme Court. An appeal against the Master’s decision to Dowsett J was dismissed but Dowsett J gave leave to the persons who were in the class for whom the action was commenced at the time of commencement but who were not named as plaintiffs, to elect to be joined as plaintiffs in the action by filing a written consent in the registry. An appeal against the decision of Dowsett J was lodged to the Full Court.

163 McPherson SPJ considered that the critical question raised by the appeal was whether the action was, within the meaning of the Limitation of Actions Act 1974 (Qld), “brought” by the unnamed plaintiffs at the time the writ was issued; and held that the terms of Order 3 rule 10 (which were in a similar form to SCR, Pt 8 r 13) which provided that one or more numerous persons having the same interest in a cause “may sue … on behalf … of all persons so interested”, applied to bringing an action and to doing so “on behalf of all persons … so interested”. McPherson SPJ said, in relation to Order 3 rule 10:

164 By reason of his finding as to the bringing of the action by the unnamed plaintiffs at the time the writ was filed and his conclusion that this was the critical question, McPherson SPJ did not consider it necessary to determine whether the unnamed plaintiffs were also “parties” to the original action. McPherson SPJ referred to the decision of Moon v Atherton and said it was authority for the course taken by Dowsett J. McPherson SPJ dismissed the appeal, holding that the failure of the writ to comply with the Rules was an irregularity which was cured by the order of Dowsett J giving the unnamed plaintiffs leave to be joined as named plaintiffs. McPherson SPJ said:

165 Ryan and Moynihan JJ held that the unnamed plaintiffs were not parties to the proceedings at the time the action was brought. On this question, Ryan J distinguished Moon v Atherton because in that case, unlike in Cameron, the defendant did not apply to strike out the representative action at the initial stage and because the unnamed plaintiffs had not been served with notice of the proceedings. Ryan J dismissed the appeal on the basis that there were “special circumstances” which justified the order of Dowsett J permitting the addition of plaintiffs out of time. These circumstances comprised the awareness of the defendants since the time of issue of the writ that the claims referred to therein were purportedly being made against them on behalf of persons including the unnamed plaintiffs; and that the incorrect use by the plaintiffs of the representative procedure was an irregularity cured by the orders made by Dowsett J. Moynihan J generally disposed of the appeal on the same basis as McPherson SPJ.

166 The approach to construction of the Court Rules and s 10 of the Limitation of Actions Act 1974 (Qld) by McPherson SPJ in Cameron is I accept, persuasive and is applicable to the provisions of SCR, Pt 8 r 13 and the relevant limitations provisions. The relevant statutory limitations provisions uniformly use the expression “action brought” as per s 10 of the Limitation of Actions Act 1974 (Qld). The language used in Pt 8 r 13 which provides that one or more numerous persons having the same interest in proceedings may “commence proceedings as representing all or as representing all except one or more of them”, is substantially similar to the provisions contained in Order 3 rule 10. There is no material difference between the respective expressions used in each set of Rules to describe the capacity in which the representative plaintiff brings the action for the others who have the same interest in the cause or proceeding. Order 3 rule 10 refers to suing “on behalf of” the unnamed plaintiffs. Part 8 rule 13 refers to commencing proceedings “representing” the unnamed plaintiffs.

167 On the assumed basis that the proceedings had been properly commenced within the meaning of Part 8 Rule 13, I would accept as correct the submission by the plaintiffs that based on Cameron, the issue of the summons in the representative proceedings would amount to the bringing of the action for money had and received by the named and unnamed plaintiffs for the purposes of both the applicable statute of limitations provisions and SCR, Part 8 rule 13.

Short Minutes of Order

168 Towards the end of his oral submissions Mr Gageler addressed the possibility that albeit that the court would not sanction the proposed opt-in notice procedure qua the unknown plaintiffs, the court should fashion by case management procedure, a method whereby the named plaintiffs should be permitted to continue the proceedings as representative of the 2100 persons who:

· had already appointed Firmstone as their agent;

· had already agreed to the 33 percent fee.

169 None of the other parties squarely addressed this proposal which flies in the face of the basis upon which the named plaintiffs agreed to be ‘lead’ plaintiffs and could significantly erode their anticipated entitlement to share any exposure to costs with the opt-in group of putative plaintiffs. It may be that one of the matters to be taken into account concerns the precise dates and circumstances when the 2100 persons were approached and appointed Firmstone as their agent and agreed to the 33 percent fee. It is not an altogether simple task to unearth the relevant facts from the evidence presently before the Court, although it seems likely that these persons were approached at some stage after March 2002 when the arrangement with Horwath was apparently entered into. One does not know whether all or only some of them were approached and agreed to participate before the commencement of these proceedings nor as to whether all or only some of them were approached and agreed to participate between the commencement of the proceedings and the hearing of the motions on 3 September 2003.

170 During the cross-examination of Mr Firmstone he gave evidence that the advertising had occurred "around the middle of 2002 and has been going progressively since then". [Transcript 46] On the other hand, Mr Insall [Transcript 154] referred the court to the "Advertising Summary" [Exhibit PX 1412 et seq] where a list of advertisements only commences on 31 May 2003 and runs through to the end of July 2003. Further as at 24 July 2003 Robert Richards & Associates were apparently able to produce a list of the represented retailers of whom Firmstone was then aware. [Appendix D to the affidavit of Mr Firmstone of 8 August 2003]

171 The proposal appears to me to be simply another indicator of the manner in which the interests of one group of parties said to be represented by the solicitors on the record and said to likewise be clients of Firmstone, are seen to clearly conflict with the interests of the 2100 persons referred to above.

172 In any event it does seem appropriate that a proper opportunity should be given to the parties to address in relation to the proposal once they have had a proper opportunity to read the judgment.

173 Once the parties have had a proper opportunity to read this judgment, they will also be given an opportunity to address on relief. The effect of the reasons on the Adams proceedings may also be the subject of further address.

174 The proceedings will be stood over to a convenient date when costs may also be argued.

Objections to affidavit evidence

175 The Court reserved a decision upon a limited number of objections to the affidavit evidence. The rulings are as follows:

Affidavit of Mr Hugh Robert Scott of 28 August 2003

So much of paragraph 7 as commences "and outside the financial capacity". The section objected to is allowed.

Affidavit of Mr Hugh Robert Scott of 3 September 2003

I certify that paragraphs 1 - 175
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on 11 September 2003

Susan Piggott

Associate

11 September 2003

Last Modified: 09/25/2003

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Citations

Neville Albert Marston v Statewide Independent Wholesalers Ltd; Ekaton Corporation Pty Ltd v Shahin Enterprises Pty Ltd; William Edwin Hall v British American Tobacco Australia Services Ltd; [2003] NSWSC 816

Most Recent Citation

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Statutory Material Cited

21

King v Adams [2016] NSWSC 1798

Ha v New South Wales [1997] HCA 34

CITATION:	Neville Albert Marston & Anor v Statewide Independent Wholesalers Ltd; Ekaton Corporation Pty Ltd v Shahin Enterprises Pty Ltd; William Edwin Hall & Anor v British American Tobacco Australia Services Ltd; Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd, Joanne Margaret Gow & 2 Ors v Stuart Alexander & Co Pty Ltd, Garry George Adams & Anor v Philip Morris Limited, Arrilla Pty Ltd v ACN 001 259 301 Pty Ltd formerly Australian Independent Wholesalers Pty Ltd; Dale Leslie Berney v Australian Liquor Marketers Pty Ltd; Whelan & Hawking Pty Ltd v IGA Distribution (Vic) Pty Ltd; Sydney Richard Veitch Murray & Anor v Queensland Independent Wholesalers Ltd; William Edwin Hall & Anor v British American Tobacco Australia Ltd; Paul Ashley Neindorf & Anor v IGA Distribution (SA) Ltd; Barry George Williamson & Anor v Composite Buyers Ltd; Joanne Margaret Gow & 4 Ors v IGA Distribution Pty Ltd; William Edwin Hall & Anor v Statewide Tobacco Services Ltd; Gary Leslie Grey & Anor v Philip Morris Limited [2003] NSWSC 816 revised - 25/09/2003
HEARING DATE(S):	03/09/03, 04/09/03, 05/09/03
JUDGMENT DATE:	11 September 2003
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	Einstein J
DECISION:	Litigation funding arrangement proposed by opt-in procedure held to be against public policy and to constitute an abuse of the Court's process. Application for directions permitting plaintiffs to send 'Opt In' notices to target retailers sought to be represented rejected. Short minutes of order to be brought in.
CATCHWORDS:	Practice and procedure - Abuse of process - Maintenance and champerty - Approach to be taken to litigation funding - Third party funder with no interest in outcome other than repayment and profit from the litigation - Special factors disclose abuse of courts process - Representative proceedings - General principles-Whether persons whom plaintiffs purport to represent have the "same interest" in the proceedings - Power to substitute another plaintiff in the place of a named plaintiff who had given up rights of action by settling with tobacco wholesalers before commencing proceedings purporting to be representative proceedings - Discovery - Discovery for the purpose of ascertaining the identities of those falling within class sought to be represented - Power of Supreme Court to order discovery for this purpose - Plaintiff tobacco retailers suing defendant tobacco wholesalers in actions for moneys had and received to recover amounts paid from 1 July 1997 to 5 August 1997 following the decision of the High Court of Australia in Roxborough v Rothmans of Pall Mall Ltd (2001) 208 CLR 516 - Principle of law established in Roxborough - Proceedings purporting to be representative proceedings commenced on the day prior to being statute barred - Attempt by funder to obtain Court directions permitting service upon target opt-in group of notices inviting participation in proceedings upon the non-negotiable basis that funder to receive 33 1/3 percent on amounts recovered from retailers-Members of proposed target opt-in group unable to commence their own proceedings by reason of expiry of limitations period - Funder with monopoly over the means of access to recovery held to be trafficking in the retailers litigation
LEGISLATION CITED:	Business Franchise Licences (Tobacco) Act 1987 (NSW) Business Franchise (Tobacco) Act 1974 (Vic) Business Franchise (Tobacco) Act 1975 (WA) Business Franchise (Tobacco and Petroleum Products) Act 1984 (ACT) Corporations Act 2001 (Cth) Credit Act 1984 (NSW) Criminal Law Consolidation Act 1935 (SA) Criminal Law Act 1967 (UK) Criminal Code Act 1899 (Qld) Freedom of Information Act 1989 (NSW) Limitations of Actions (Recovery of Imposts) Act 1963 Legal Practitioners Act 1995 (Qld) Legal Profession Act 1987 (NSW) Limitation of Actions Act 1974 (Qld) Maintenance and Champerty Abolition Act 1993 (NSW) Maintenance, Champerty and Barratry Abolition Act 1993 (NSW) Supreme Court of Judicature (Consolidation) Act 1925 (UK) Supreme Court Act 1970 (NSW) Tobacco Business Franchise Licences Act 1980 (Tas) Tobacco Products (Licensing) Act 1988 (Qld) Tobacco Products Regulation Act 1997 (SA) Wrongs Act 1958 (Vic)
CASES CITED:	A Firm of Solicitors, Re [1992] 1 All ER 353 AG Australia Holdings Limited v Burton [2002] NSWSC 170 Baltic Shipping Co v Dillon (1993) 176 CLR 344 Bank of America National Trust Association v Taylor [1992] 1 Lloyd's Rep 484 Benning v WIT Capital Group Inc (1 November 2001, Supreme Court of Delaware, Veasey CJ, Berger and Steele JJ) Buxton & Lysaught Pty Ltd v Buxton [1977] 1 NSWLR 285 Cameron v National Mutual Life Association of Australasia Limited (No.2) [1992] 1 Qd R 133 Cardale v Watkins (1820) 5 Madd 18 Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398 Cauvin v Philip Morris Ltd [2002] NSWSC 528 Clyne v New South Wales Bar Association (1960) 104 CLR 186 Condliffe v Hislop [1996] 1 WLR 753 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Denist v Freethy (1890) 24 QB 519 DJE Constructions Pty Ltd v Maddocks [1982] 1 NSWLR 5 Duke of Bedford v Ellis [1901] AC 1 Eisen v Carlisle & Jacquelin 417 US 155 (1973) Eisen v Carlisle & Jacquelin 52 FRD 253 (1971) Elfic Ltd v Macks (2001) 181 ALR 1 Faryab v Smyth [1998] EWCA 3503 Fauteck v Montgomery Ward & Co Inc 91 FRD 393 (1980), Firmstones Pty Ltd v Davies [2003] FCA 113 Freehill Hollingdale & Page v Bandwill Pty Ltd [2000] WASCA 150 Giannarelli v Wraith (1988) 165 CLR 543 Giles v Thompson [1994] 1 AC 142 Grovewood Holdings plc v James Capel & Co Ltd [1995] Ch 80 Ha v New South Wales (1997) 189 CLR 465 Halliday v High Performance Personnel Pty Ltd (in liq) (Sacs Group Pty Ltd) (1993) 67 ALJR 678 Heimann v Commonwealth (1935) 54 CLR 126 Hill v Archbol [1968] 1 QB 686 Hooper v Kirella Pty Ltd (1999) 96 FCR 1 Irish Shipping Ltd v Commercial Union Assurance Co Plc [1991] 2 QB 206 James Nelson & Sons Ltd v Nelson Line (Liverpool) Ltd [1906] 2 KB 217 J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [1984] 2 Qd R 413 Kamm v California City Development Company 509 F 2d 205 (1975) Latec Finance Pty Ltd v Jury [1960] 77 WN (NSW) 674 McFarlane v EE Caledonia Ltd (No 2) [1995] 1 WLR 366 McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623 Magic Menu Systems Pty Limited v AFA Facilitation Pty Limited (1997) 72 FCR 261 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021 Martell v Consett Iron Co Ltd [1955] Ch 363 Moon v Atherton [1972] 2 QB 435 Movitor Pty Ltd, Re (1996) 64 FCR 380 Murphy v Bar Association of New South Wales (2001) 49 ATR 48 Muschinski v Dodds (1985) 160 CLR 583 National Australia Bank Ltd v Idoport Pty Ltd [2000] NSWCA 8 New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 New South Wales Bar Association v Somosi (2001) 48 ATR 562 Newton v Merrill Lynch, Pierce, Fenner & Smith 259 F 3d 154 (2001) Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 Oppenheimer Fund Inc v Sanders 437 US 340 (1978) Orr v Diaper (1876) 4 Ch D 92 Price v Rhondda Urban District Council [1923] WN 228 R (Factortame Ltd) v Secretary of State for Environment, Transport and the Regions (No 2) [2002] 4 All ER 97 Roberts v National Detroit Corp 87 FRD 30 (1980) Rondel v Worsley [1969] 1 AC 191 Roux v Australian Broadcasting Commission [1992] 2 VR 577 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 Sayers v Merck SmithKline Beecham plc [2002] 1 WLR 2274 Shaw v Real Estate Board of Greater Vancouver (1973) 36 D L R (3d) 250 Smits v Roach (2002) 55 NSWLR 166 Thai Trading Co (a firm) v Taylor [1998] QB 781 Tosich Constructions Pty Ltd; Ex parte Wily, Re (1997) 143 ALR 18 Trendtex Trading Corporation v Credit Suisse [1982] AC 679 Trendtex Trading Corporation v Credit Suisse [1980] QB 629 Trepca Mines Limited (No 2), Re [1963] 1 Ch 199 Stocznia Gdanska SA v Latreefers Inc (No 2) [2000] All ER (D) 148 Wayne County Produce Co v Duffy-Mott Co Inc 155 NE 669 (1927) Weldon v Neal (1887) 19 QBD 394 Wild v Simpson [1919] 2 KB 544 William Felton & Co Pty Limited, Re (1998) 145 FLR 211 Wong v Silkfield Pty Ltd (1999) 199 CLR 255 Yaffee v Powers 454 F 2d 1362 (1972)
PARTIES :	Neville Albert Marston, Ekaton Corporation Pty Ltd, William Edwin Hall, Fostif Pty Ltd , Joanne Margaret Gow, Garry George Adams, Arrilla Pty Ltd, Dale Leslie Berney, Whelan & Hawking Pty Ltd, Sydney Richard Veitch Murray, William Edwin Hall, Paul Ashley Neindorf, Barry George Williamson, Joanne Margaret Gow, William Edwin Hall, Gary Leslie Grey (Plaintiffs) IGA Distribution Pty Ltd (Defendant 50014/03) Statewide Independent Wholesalers Ltd (Defendant 50069/03) Shahin Enterprises Pty Ltd (Defendant 50070/03) British American Tobacco Australia Services Ltd (Defendant 50071/03) Campbells Cash and Carry Pty Ltd (Defendant 50072/03) Stuart Alexander & Co Pty Ltd (Defendant 50073/03) Philip Morris Limited (Defendant 50074/03) ACN 001 259 301 Pty Ltd (Defendant 50076/03) Australian Liquor Marketers Pty Ltd (Defendant 50077/03) IGA Distribution (Vic) Pty Ltd (Defendant 50078/03) Queensland Independent Wholesalers Ltd (Defendant 50079/03) British American Tobacco Australia Ltd (Defendant 50080/03) IGA Distribution (SA) Ltd (Defendant 50081/03) Composite Buyers Ltd (Defendant 50082/03) IGA Distribution Pty Ltd (Defendant 50083/03) Statewide Tobacco Services Ltd (Defendant 50084/03) Philip Morris Limited (Defendant 50103/03)
FILE NUMBER(S):	SC 50069/03; 50070/03; 50071/03; 50072/03; 50073/03; 50074/03; 50076/03; 50077/03; 50078/03; 50079/03; 50080/03; 50081/03; 50082/03; 50083/03; 50084/03; 50103/03
COUNSEL:	Mr S Gageler SC, Mr M Leeming, Mr R Dick (Plaintiffs) Mr I Jackman SC, Mr S Goodman (Defendants - British American Tobacco Australia Services Limited 50071/03, British American Tobacco Australia Limited 50080/03, ACN 001 259 301 Pty Ltd, 50076/03)) Mr N Hutley SC, Ms R Pepper (Defendant - Stuart Alexander & Co Pty Ltd, 50073/03) Mr M Abbott QC, Mr J Clarke (Defendant - Shahin Enterprises Pty Ltd, 50070/03) Mr H Insall SC (Defendants - Campbells Cash & Carry Pty Ltd (50072), Australian Liquor Marketers Pty Limited (50077), IGA Distribution (Vic) Pty Limited (50078), Composite Buyers Limited (50082) Queensland Independent Wholesalers Ltd (50079/03, IGA Distribution (SA) Limited (50081/03), IGA Distribution Pty Ltd (50083/03)) Ms Grace Monaco (sol) (Statewide Independent Wholesalers Ltd (50069/03)) Mr R MacFarlan QC, Mr J Hmelnitsky (Philip Morris Limited (50074/03) (50103/03), Statewide Tobacco Services Ltd (50084/03))
SOLICITORS:	Robert Richards & Associates (Plaintiffs) Clayton Utz (Defendants - British American Tobacco Services Limited 50071/03, British American Tobacco Australia Limited 50080/03) Cridlands Lawyers (Defendant - Stuart Alexander & Co Pty Limited, 50073/03) Isles Selley Lawyers (Defendant - Shahin Enterprises Pty Ltd, 50070/03) Freehills (Defendants - Campbells Cash & Carry Pty Ltd (50072), Australian Liquor Marketers Pty Limited (50077), IGA Distribution (Vic) Pty Limited (50078), Composite Buyers Limited (50082), Queensland Independent Wholesalers Ltd (50079/03, IGA Distribution (SA) Limited (50081/03), IGA Distribution Pty Ltd (50083/03)) Moray & Agnew (Statewide Independent Wholesalers Ltd (50069/03)) Allens Arthur Robinson (Philip Morris Limited (50074/03) (50103/03), Statewide Tobacco Services Ltd (50084/03)) Speed and Stracey (ACN 001 259 301 Pty Ltd, 50076/03)