The Contentions
12 The respondents submitted that the proceeding is not properly constituted under Part IVA FCA because, as the Full Court held in the Philip Morris case, it is necessary that it be alleged that each applicant and group member has a claim against each respondent. In these proceedings, it may be seen that the 1st applicant (and the group members he represents) does not have a claim against the PCS companies or their directors, and the 2nd applicant and his group) has none against the 1st to 5th respondents. The proceedings cannot therefore be continued as representative proceedings. Senior counsel for the PCS companies and directors did not pursue an alternative submission, that the Court should order the proceeding not to continue as a representative proceeding because it was in the interests of justice to do so (s 33N FCA).
13 In the Philip Morris case there were three sets of respondents to the representative proceedings. They were manufacturers and distributors of cigarettes in Australia. The named applicants and the group members claimed to have contracted a smoking-related disease as a consequence of the respondents' conduct. Of significance on the appeal was the submission made by Philip Morris that s 33C(1)(a) had not been complied with because some applicants may not have claims against some of the respondents by reason that they did not smoke the cigarettes manufactured or distributed by that respondent. The primary judge however described the applicants' case as one 'painted on a larger canvas' and involving a course of conduct by the three sets of respondents, individually and collectively, designed to create a false community perception about the risks associated with cigarette smoking.
14 It was accepted by the applicants on the appeal that to satisfy the "threshold requirements" of s 33C(1) FCA (Wong v Silkfield Pty Ltd (1999) 165 ALR 373, 381), it was necessary to plead that the applicant and every represented party had a claim against every respondent. In the view of Sackville J (with whom Spender and Hill JJ agreed), s 33C(1)(a) implemented the Australian Law Reform Commission's recommendation that group proceedings should only be available when the applicant and group members seek relief against the same respondent. It did not envisage that the procedure should be employed "to bring a proceeding against more than one respondent, in circumstances where some members of the group make the claim against one respondent only and others make a claim against another respondent". As his Honour later observed, if there was more than one respondent, it would be necessary for there to be a claim by the group members against all of them. His Honour went on:
"It follows that s 33C(1)(a) is not satisfied if some applicants and group members have claims against one respondent (or group of respondents) while other applicants and group members have claims against another respondent (or group of respondents). The requirement in s 33C(1)(b), that the claims of all group members are in respect of or arise out of the same, similar or related circumstances, is a necessary but not sufficient condition for the commencement of representative proceedings. Of course, if there are two sets of claims against two sets of respondents, it may well be that each can be the subject of representative proceedings. It may even be that directions can be made for them to be heard together: Ryan v Great Lakes Council (1997) 149 ALR 45, at 48, per Wilcox J. But they cannot both be the subject of the same representative proceedings."
15 If these proceedings were viewed as one action, it is clear that s 33C(1)(a) is not satisfied. In reality, however, it comprises two actions brought by two different applicants on behalf of two distinct groups. The companies and persons they are brought against are not identical. It is also of importance, as Philip Morris confirms, that there be at least one "substantial common issue of law or fact" in each group member's claim for s 33C(1)(c) to be satisfied. The pleading is deficient in that respect, although Senior Counsel for the applicants submitted that in each of the actions the common question was whether the representations made (the 'Dubai' and the 'Webb Dock' representations) contravened s 52 Trade Practices Act.
16 The applicants accepted, and indeed relied upon, the fact that the proceedings involved two separate claims. They submitted that the proceedings were competent given the provisions of O 6 r 2 Federal Court Rules relating to the joinder of parties and of actions which, by reason of s 33ZG(c)(iii), is not affected by the provisions relating to representative proceedings. The judgment of Sackville J in Philip Morris at least recognises that there may be two sets of claims against two sets of respondents, each of which can be the subject of representative proceedings. Whilst his Honour did not deal expressly with the rules relating to joinder of parties and causes, his Honour was of the view that the two sets of claims could not be regarded as one or a composite proceeding.
17 In my view, the provisions of O 6 r 2(a) do not assist the applicants. The two applicants and their group members claims do not arise out of the "same transaction" nor a series of transactions. There is no one transaction to which they were all parties, nor a claim by any one of them to which all respondents were a party: see Payne v Young (1980) 145 CLR 609, Barwick CJ. Mason J in that case referred with approval to the statement of the effect of the equivalent rule in Stroud v Lawson [1898] 2 QB 44, 54-55. It is not necessary that the whole of the transaction be involved in each of the causes of action joined. The rule does extend to a case where there are a series of transactions in respect of which one plaintiff or applicant was interested up to one point, and others not only to that point but beyond - the entire transaction or series of transactions from beginning to end. The claims of all applicants must arise out of the same transaction or series of transactions: Bishop v Bridgelands Securities (1990) 25 FCR 311, 314. It may also be observed that the individual claims in what are effectively two separate actions might not be joined under this rule, but it is not necessary to further consider that question since I do not understand their separate constitution as representative proceedings to be under attack.
18 That leaves the question whether it is appropriate to grant leave to join the parties under O 6 r 2(b). In my view it is appropriate to do so. Considerations such as costs, delay and unfairness are relevant to the exercise of this discretion (Bishop v Bridges, 314). Whilst the link, or overlap, between the two sets of claims presently comprises what I regard as a dubious claim for breach of, or inducement to breach, the first (the Dubai) contract, in order to offer the second contract, or at least one which is not fully pleaded so far as concerns what those applicants did in consequence of that breach, the matter is pleaded as something of a continuum. It does not seem to me that the respondents are in any way disadvantaged by the claims being pleaded together, although it is to be hoped that the applicants will address the deficiencies which remain in them and refine the claims to their true limits. At that point the matter could more swiftly be moved towards a hearing. Nothing would seem to me to be gained by separating the claims at this stage and further costs would be unnecessarily incurred.
19 In granting leave I have not put out of question the prospect that the matters be separated at hearing, if that appears to be the more efficient course - that is to say that the Dubai claim be heard prior to the Webb Dock claim. At present I see some merit in it, but I have not had the benefit of submissions on the matter.
20 I will order that there be liberty for each of the applicants and the remaining respondents to be joined in the procedings. In view of the applicants' relative success on this aspect of the motions, but their concessions as to the need for further amendment, I propose to order that the costs of the motions be the parties' costs in the proceedings. I will, however, allow the parties seven days to submit written argument to the contrary, should they wish to do so. In otherwise dismissing the motions, I do not foreclose the respondents from making the same submissions with respect to the following statement of claim. There will be a direction that the applicants deliver their further amended Statement of Claim within a specified time, and I will discuss that and any further necessary directions with the parties' legal representatives.
I certify that the preceding twenty numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.