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Philip Morris (Australia) Ltd v Nixon

Philip Morris (Australia) Ltd v Nixon

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FEDERAL COURT OF AUSTRALIA
Philip Morris (Australia) Ltd v Nixon [2000] FCA 229
PRACTICE AND PROCEDURE – REPRESENTATIVE PROCEEDINGS – application for leave to appeal from interlocutory orders – primary judge dismissed application for summary dismissal and granted leave to file amended application and statement of claim – threshold requirements in s 33C(1) in Part IVA Federal Court of Australia Act 1974 (Cth) for representative proceedings that every applicant have a claim against every respondent – level of generality acceptable in pleading claims of group members – whether material facts pleaded established contravention of s 75B Trade Practices Act 1976 (Cth) – whether range of circumstances too broad to satisfy s 33C(1)(b) – whether any common questions of fact and law (s 33C(1)(C)) – pleading requirements for representative proceedings in s 33H(1)– whether pleadings afforded respondents a fair opportunity to meet the case and define the issues for litigation
Federal Court of Australia Act 1976 (Cth), Part IVA
Trade Practices Act 1974 (Cth), s 52, s 75B, s 82
Federal Court of Australia Amendment Act 1991 (Cth)
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth)
Acts Interpretation Act 1901 (Cth), s 23(b)
Nixon v Philip Morris (Australia) Ltd (1999) 165 ALR 515 disapproved
Wong v Silkfield Pty Ltd (1999) 165 ALR 373 applied
Yorke v Lucas (1985) 158 CLR 661 applied
Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 applied
Symington v Hoechst Schering Agrevo Pty Ltd (1997) 78 FCR 164 cited
Tropical Shine Holdings Pty Ltd v Lake Gesture Pty Ltd (1993) 45 FCR 457 cited
Silkfield Pty Ltd v Wong (1998) 90 FCR 152 cited
Cameron v Qantas Airways Ltd (1993) ATPR 41-251 cited
Harrison v Lidoform Pty Ltd (Hely J, 24 November 1998, unreported) cited
Dare v Pulham (1982) 148 CLR 658 applied
Zhang v Minister for Immigration, Local Government and Ethnic Affairs (1993) 45 FCR 384 cited
Bass v Permanent Trustee Co Ltd (1999) 161 ALR 399 applied
Law Reform Commission, Grouped Proceedings in the Federal Court, Report No 46, 1988
PHILIP MORRIS (AUSTRALIA) LTD AND OTHERS v
MICHAEL CHRISTOPHER NIXON AND OTHERS
N 188 of 1999
SPENDER, HILL AND SACKVILLE JJ
13 MARCH 2000
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 188 OF 1999

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

PHILIP MORRIS (AUSTRALIA) LTD (ACN 004 316 901) AND
PHILIP MORRIS LTD (ACN 004 694 428)
APPLICANT FOR LEAVE TO APPEAL/FIRST APPELLANT

W D & H O WILLS HOLDINGS LTD (ACN 003 763 291) AND
W D & H O WILLS (AUSTRALIA) LTD (ACN 004 069 649)
APPLICANT FOR LEAVE TO APPEAL/SECOND APPELLANT

ROTHMANS HOLDINGS LTD (ACN 002 717 160) AND
ROTHMANS OF PALL MALL (AUSTRALIA) LTD
(ACN 000 151 100)
APPLICANT FOR LEAVE TO APPEAL/THIRD APPELLANT

AND:

MICHAEL CHRISTOPHER NIXON, ALEX TALAY, ROBERT MILNE, VICTOR BRUCE WILLIAMS,
SANDRA SHEPHERD AND GREGORY DURKIN
(for themselves and as representing the persons referred
to in paragraph 1 of the Statement…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] FCA 229
Decision Date: 13 MARCH 2000

CaseChat Overview and Summary

Philip Morris (Australia) Ltd brought a case against Nixon and others, seeking to have a class action dismissed on various grounds. The primary dispute involved the respondents' alleged disregard for the health and safety of class members, with claims spanning pre- and post-October 1974 conduct, the date of the Trade Practices Act commencement. The legal issues before the court encompassed the accrued jurisdiction question, the hypothetical nature of the issues, and compliance with Section 33C(1)(a) of the Federal Court Act. The court was required to determine whether the claims were within its jurisdiction and whether they could be pursued as a class action.

The court's reasoning centred on the accrued jurisdiction question, acknowledging that the conduct alleged prior to the Trade Practices Act's commencement could still form part of a cause of action if related to post-1974 conduct. The court held that claims based on pre-1974 conduct could be considered within its jurisdiction if the class was limited to those who smoked after 1 October 1974. The court also dismissed the argument that the issues were hypothetical, finding that the determination of one claim would necessitate elements of another, thereby connecting the claims sufficiently. The court further clarified that the proceedings did not contravene Section 33C(1)(a) of the Federal Court Act.

In its outcome, the court granted leave to appeal against certain orders made by the primary judge, setting aside specific orders made on both 13 August 1999 and 1 September 1999. The court directed that the claims should no longer proceed as a class action and mandated individual applications and statements of claim from each applicant. It also ruled that the respondents were to pay costs associated with the application for leave to appeal and the appeals themselves.

Orders

Orders of the court

1. The applicants for leave to appeal be granted leave to appeal against Orders 1(b), 2, 4, 5 and 6 made by the primary Judge on 13 August 1999 and the Orders made by the primary Judge on 1 September 1999.

2. Orders 1(b), 4, 5 and 6 made on 13 August 1999 be set aside.

3. Orders 1, 2, 3, 4, 5, 7 and 8 made on 1 September 1999 be set aside.

4. In lieu of the orders made by the primary Judge the following orders and directions be made:

(a) The Court declares that it is inappropriate that the claims of the applicants in the principal proceeding be pursued by means of a representative proceeding.

(b) That the proceedings no longer continue under Part IVA of the Federal Court of Australia Act.

(c) That each applicant in the principal proceeding presently a party to the representative proceeding file and serve on or before a date to be fixed with the legal representatives of the parties an application and statement of claim relating to that applicant’s claim against the respondents in the principal proceeding or any of them.

(d) That the applicants in the principal proceeding pay the costs of the application to date (including reserved costs) of the respondents in the principal proceeding.

5. The respondents to the application for leave to appeal pay costs of each of the applicants for leave to appeal of the motions for leave to appeal and of each appeal.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

SPENDER, HILL AND SACKVILLE JJ

Finally, the statement of claim alleges that during the relevant period the respondents acted in continuing, deliberate and/or reckless disregard of the health and safety of class members (par 27).THE JUDGMENT AT FIRST INSTANCE In the judgment delivered on 13 August 1999, the primary Judge addressed the arguments advanced by the respondents on the summary dismissal and strike out motions. Many of those arguments have been repeated or presented in somewhat modified form on the applications for leave to appeal. It is necessary to bear in mind when considering his Honour’s reasons that the current form of the pleadings, filed pursuant to leave granted on 1 September 1999, is not the same as that before his Honour when he delivered judgment on 13 August 1999.The Accrued Jurisdiction Question The primary Judge indicated that but for a passage in the judgment of Gummow and Hayne JJ in Re Wakim; Ex parte McNally, at 312, (with which Gleeson CJ and Gaudron J apparently agreed), he would have been inclined to accept the respondents’ submission that their alleged conduct prior to 1 October 1974 (the date of commencement of the TP Act) was incapable of giving rise to a cause of action within the accrued jurisdiction of the Court. However, the passage in Re Wakim suggested that there is but one matter if “different claims are so related that the determination of one is essential to the determination of the other”. In his Honour’s view, this formulation does not necessarily incorporate a strict common temporal requirement for the purpose of assessing whether a pleaded cause of action is within the accrued jurisdiction of the Court. His Honour held that, provided the represented class were confined to persons who smoked after 1 October 1974, a claim founded on breach of duty by reason of the respondents’ pre-1974 conduct would fall within the accrued jurisdiction of the Court. In the case of a person who commenced smoking after 1960 but before 1974 and who continued to smoke after the latter date, it might be difficult to know whether the physiological change that eventually manifested itself in a disease occurred before or after 1 October 1974. Such a person would have alternative claims under the TP Act or in negligence for the same damage. Consequently, the determination of the TP Act claim would necessitate determination of a major element of any negligence claim, namely the date of the critical physiological change. In his Honour’s opinion, this was sufficient to bring the cause of action in negligence within the accrued jurisdiction of the Court.Hypothetical Questions The respondents had submitted that, because findings on the common issue of law and fact could vary as among particular applicants and group members, the issues were hypothetical and outside the jurisdiction that could be conferred on the Court under Chapter III of the Constitution. Since the respondents do not challenge the primary Judge’s rejection of this contention, there is no need to consider his reasoning on the point.Section 33C(1)(a) of the Federal Court Act

Ratio Decidendi

Legal Principle Established

Established by: SPENDER, HILL AND SACKVILLE JJ

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 188 OF 1999