FOSTIF PTY LTD v CAMPBELLS CASH & CARRY PTY LTD

These claims were brought shortly before the expiry of the relevant limitation period. Each claim was funded by Firmstones Pty Ltd and purported to be a representative action on behalf of all retailers who chose to opt-in. The lead plaintiffs sought an order before Einstein J for discovery of the names and addresses of all other members of the class of represented retailers, in order to send an "Opt-In Notice" to each identified party.

Einstein J ordered that the proceedings not continue as representative proceedings and that the plaintiffs' discovery applications be dismissed. His Honour held that the represented retailers did not have the "same interest" within the meaning of Part 8 r13 Supreme Court Rules and that the proceedings were an abuse of process as regards their purported representative nature.

In the Court of Appeal, the appellants challenged the orders of Einstein J. The defendants asserted two points of distinction between the claims; the first relating to the separate itemisation of licence fees on some but not all invoices and the second relating to the application of Roxborough outside New South Wales or the Australian Capital Territory. The appellants disputed both points as matters of distinction, arguing that rather they indicated common points of law across the whole group, thereby attracting the Rule. Further, the appellants challenged Einstein J's findings in relation to the role of Firmstone and the solicitor for the plaintiffs.

HELD: Per Mason P (Sheller JA, Hodgson JA agreeing) allowing the appeal:

1. The representative actions are not an abuse of process and the permanent and unconditional stay of proceedings was not justified for abuse of process. Champerty or third party assistance per se do not constitute abuse of process. Neither the solicitor's retainer nor the role of Firmstone revealed the actuality or tendency of abuse of process. Nor did Firmstone's activities constitute trafficking in litigation.

2. The proceedings should be allowed to proceed as representative proceedings. The Pt 8 Rule 13 was engaged because there were common issues of law, relating to the application of Roxborough, linking the claims of each represented group of retailers. These were the significance of the Business Franchise Licenses (Tobacco) Act 1987 (NSW) and the relevance of the intent of individual retailers to the cause of action for recovery of money on the basis of failed consideration. Further, there are material common issues of fact sufficient to satisfy the Rule's jurisdictional requirement. These common issues also indicate the appropriateness of the proceedings continuing as a unity. That the members have the same interest need not necessarily be demonstrated in the originating process. Nor does the Rule require that it be possible to formulate some claim to relief that is beneficial to all members. Merely because individual money judgments will be sought in favour of each member is no bar.

3. The Roxborough cause of action does not depend upon the subjective intent of the retailer who paid the money sought to be recovered. Rather, the cause of action arose when Ha destroyed the common, objectively discernible basis of the relevant transaction. The remote possibility of an admission of subjective intent on the part of a retailer sufficient to defeat his or her individual cause of action does not defeat the likelihood of common issues of law and fact across the class of retailers.

4. The lead plaintiffs would, at an appropriate stage in the proceedings, be entitled to discovery as to the details of all transactions falling within the scope of the representative proceedings. The interests of a fair trial, and the need to the "close the class", require access to all readily available information relevant to the facts in issue, which are not to be confined to matters touching only those who have already opted-in. These include information tending to identify retailers who will be invited to opt in.

ORDERS:

1. Appeal allowed.
2. Set aside orders 1-6 of the orders made by Einstein J on 7 November 2003 so far as concerns the proceedings that are the subject of this appeal.
3. In lieu thereof, order that: (i) the proceedings continue as representative proceedings; (ii) remit proceedings to the Equity Division for further directions in accordance with the reasons of the Court of Appeal.
4. Respondents to pay the appellants' costs of the motions addressed by Einstein J in the judgments under appeal and the appellants' costs in the Court of Appeal.
5. Respondents to have a certificate under the Suitors' Fund Act 1951, if qualified.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41048/03 CA 41051/03 CA 41052/03 CA 41053/03 CA 41054/03 CA 41056/03 CA 41057/03 CA 41058/03

MASON P SHELLER JA HODGSON JA

FOSTIF PTY LTD v CAMPBELLS CASH & CARRY PTY LTD ARRILLA PTY LTD v ACN 001 259 301 PTY LTD BERNEY v AUSTRALIAN LIQUOR MARKETERS PTY LTD WHELAN & HAWKING PTY LTD v IGA DISTRIBUTION (VIC) LTD MURRAY & ANOR v QUEENSLAND INDEPENDENT WHOLSESALERS LTD NIENDORF & ANOR v IGA DISTRIBUTION (SA) LTD WILLIAMSON & ANOR v COMPOSITE BUYERS LTD GOW & ORS v IGA DISTRIBUTION PTY LTD JUDGMENT

Background 2 The tobacco licensing schemes of the States and Territories were declared invalid by the High Court on 5 August 1997 (Ha v State of New South Wales (1997) 189 CLR 465). The subject matter of Ha was the Business Franchise Licences (Tobacco) Act 1987 (NSW), but the Court's reasoning was generally accepted as having struck down as duties of excise the similar schemes in the other States and Territories, despite statutory variations some of which are said to be of importance by respondents in the present appeals. 3 It will be necessary later in these reasons to consider differences of detail in some of the statutory schemes. For the present, a broad description of the legislation as it stood in New South Wales in its final form will suffice. Wholesalers and retailers were prohibited under penalty from selling tobacco without a licence. Licences were issued on application for periods of not more than a month, each licensing month expiring on the 27th day of the calendar month. The amount of the fee payable for the licence included a fixed component, plus a sum calculated by reference to 100% of the wholesale list price of tobacco products sold during the "relevant period". This was defined as the month commencing two months before the commencement of the month in which the licence expired. For the purpose of calculating the retailer's licence fee, the value of tobacco purchased from a licensed wholesaler was to be disregarded if that licensee had paid or was liable to pay a licence fee in respect of that tobacco. 4 In Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516, licensed retailers who had bought tobacco in New South Wales from a licensed wholesaler between 1 July 1997 and 5 August 1997 sued to recover the licence fee separately identified in the sales invoices that they had paid before the decision in Ha was announced. The High Court held that these sums were recoverable as money had and received because there had been a failure of a distinct and severable part of the consideration for the purchase of the goods. It was no defence for the wholesaler to establish that the retailers had passed on the cost of the licence fee by charging their customers prices which covered the full amount they had paid to the wholesaler. Liability did not turn on implied contract or mistaken payment. 5 The current proceedings are brought by retailers and are some of several that were brought against licensed wholesalers in the wake of Roxborough. Each of the proceedings is funded by Firmstones Pty Ltd trading as Firmstone & Fell Consultants (Firmstone). The various Summonses were filed in June 2003, shortly before the expiry of the six-year limitation period that applies to private restitutionary actions in this State (Limitation Act 1969, s14(1)(a)). 6 These appeals challenge orders made by Einstein J on 7 November 2003 providing that 17 separate proceedings brought by groups of retailers against their respective wholesalers not continue as representative proceedings. His Honour held that none of the proceedings fell within the Rule permitting representative proceedings (Supreme Court Rules, Pt 8 r13) and also that each proceeding was an abuse of process as regards its purportedly representative character. 7 Eight sets of plaintiffs have continued to prosecute appeals from these orders. Other proceedings have been settled. 8 With two broad qualifications, the issues in each matter are identical, even though different defendants and different States or Territories are involved. 9 The first point of distinction (asserted by the relevant defendants but denied by their plaintiffs) is that the sales invoices provided to some retailers did not separately itemise the licence fees. The sums involved were nevertheless readily ascertainable by reference to published price lists and known methods for determining the value of the applicable licence fees. (One wholesaler's invoices may not yield to this analysis, but this is a factual dispute to be tried.) The appellants argue that separate itemisation is not an essential aspect of Roxborough. 10 The second point of distinction (also asserted by the relevant defendant but denied by the lead plaintiff suing it, Arrilla Pty Ltd) is ostensibly a dispute about the ambit of Roxborough, although at times it presented as a constitutional argument as to the scope of Ha itself. This defendant has signalled that it wishes to argue that retailers who purchased from a wholesaler outside New South Wales or the Australian Capital Territory are unable to invoke Roxborough. 11 The appellants dispute these asserted points of distinction, while embracing the existence of the two sets of arguments as indicators of points of law that the whole of the relevant groups have in common, thereby attracting the Rule.

The claims as formulated in the various proceedings 12 In each matter the nominated (or lead) plaintiff or plaintiffs seek by Summons: 1. Judgment against the defendant in favour of the plaintiff(s) together with interest pursuant to section 94 of the Supreme Court Act (NSW). 2. Such further or other orders as the Court deems fit. 3. Costs. 13 Each Summons commences its statement of the Nature of the Dispute in substantially identical terms. In Fostif Pty Ltd v Campbells Cash and Carry Pty Ltd the following appears (emphasis added): 1. The plaintiff claims the relief set out in this Summons on behalf of themselves (sic) and the class of unnamed persons referred to in paragraph 2 of the plaintiff's contentions below whom the plaintiff represents in the proceedings pursuant to the Supreme Court Rules 1970, Part 8, rule 13. By reasons of the "opt-in" procedures referred to below, at the time of judgment there will be no unnamed person in respect of whom judgment is sought. Once a member of the class of represented retailers has signed and returned an "opt-in" notice to the plaintiff's solicitor that person will become a named plaintiff in the proceedings entitled to judgment in his, her or its favour.

2. The plaintiff proposes to give the unnamed members of the class whom the plaintiff represents an opportunity to decide whether they wish to be involved in the proceedings by the sending of an "opt-in" notice to these persons. The members of the class will be required to sign and return the "opt-in" notice to the solicitors for the plaintiff in order for these persons to become involved as plaintiff in the proceedings. Receipt by the plaintiff's solicitor of a signed "opt-in" notice will establish that the represented retailer has consented to becoming a plaintiff.

3. The plaintiff and its solicitors know the names and addresses of some but not all the unnamed members of the class whom the plaintiff represents. In order for the plaintiff to ascertain the names and addresses of the unnamed members of the class so as to send an "opt-in" notice to each person it will be necessary for the defendant, who possesses this information, to discover it in the proceedings. The plaintiff will seek orders for such discovery from the Court at the earliest opportunity. 14 Then follows a short-form pleading that "the plaintiff" was a tobacco retailer in New South Wales; the defendant was a wholesaler carrying on business in named Australian jurisdictions; there was a tobacco licensing scheme that stipulated licensing requirements in those jurisdictions; the licence fees payable under the New South Wales Act were found to be invalid duties of excise in Ha's Case; each plaintiff purchased tobacco products from the defendant during the period 1 July 1997 to 5 August 1997, paying to the defendant the amount of the licence fees referable to such sales as separately identifiable parts of the amount payable in respect of each sale; and that the defendant did not pay nor become liable to pay the amounts paid by way of licence fees by the plaintiff to the defendant during the relevant period, as licence fees under the "Excise Acts". The Summons refers to the decision in Roxborough as determining that the plaintiff tobacco retailers were entitled to restitution from the defendant with respect to the licence fees by reason of a total failure of consideration. It pleads a demand for refund of the amounts paid and the defendant's refusal to repay. 15 The expression "plaintiff" is later defined as the lead plaintiff(s) and the represented retailers (Plaintiff's Contentions par 3). 16 Under the heading Issues Likely to Arise appears the statement: Whether these proceedings are distinguishable in any material respect from the facts in Roxborough .... in which the High Court determined that the plaintiff tobacco retailers in those proceedings were entitled to recover from their wholesale tobacco supplier, amounts paid by way of tobacco licence fees in analogous circumstances to these proceedings. 17 Then follows the Plaintiff's Contentions in the form of a detailed pleading. It is sufficient to set out par 2: 2. The plaintiffs who are the persons listed in Schedule 1 to this Summons bring these proceedings on behalf of themselves and all other persons (the "represented retailers") who: (a) during the whole or some part of the Relevant Period: (i) were retailers of tobacco products carrying on business in one or more of New South Wales, Queensland, Victoria, South Australia, Western Australia, Australian Capital Territory and Tasmania; (ii) purchased tobacco products sold to them by the defendant; (iii) paid to the defendant the amount of the licence fee referable to the sales in (ii) as separately identifiable and severable parts of the consideration payable in respect of each sale; (b) have not recovered from the defendant an amount or amounts referable to the licence fees paid to the defendant as referred to in (a)(iii) or otherwise released or agreed the release the defendant from any liability or alleged liability to make payments to them of the amount in (a)(iii). 18 Schedule 1 nominates the lead plaintiff or plaintiffs involved and Schedule 2 the Invoice(s) rendered and amounts sought to be recovered by those plaintiffs. The presence of more than one identified lead plaintiff would appear to indicate that they were in partnership or had otherwise dealt jointly with the defendant. Hereafter in these reasons I shall use the singular "plaintiff" to refer to the lead plaintiff(s). 19 The Summons does not name the additional members of the class of retailers who dealt with the defendant. However, the Nature of the Dispute and the Contentions parts clearly state that the plaintiff purports to bring the proceedings on behalf of a wider class of "represented retailers" who are identified by description. The Summons foreshadows that the wider group will be identified by name later in the proceedings, once they have signed an "opt-in" notice. Read fairly and as a whole, the Summons purports to plead the facts material to the right of each represented person to recover the licence fee shown, while obviously contemplating that particulars relevant to individual retailers will be provided in due course. The Summons also signals the intention that each represented person who "opts-in" and whose identity is notified to the defendant will seek an individual money judgment reflecting his, her or its particular circumstances. 20 At this stage none of the defendants has filed its Defence.

The interlocutory motions in the Equity Division 21 The plaintiff in each proceeding applied by notice of motion for orders requiring the defendant to disclose by discovery and interrogatories details of "represented retailers" who were sold tobacco products during the relevant period by the defendant. 22 The notices of motion also sought directions permitting the plaintiff to send an "Opt-In Notice" to represented retailers already known to the plaintiff and to those identified through the discovery/interrogatory process. 23 The plaintiff also sought an order pursuant to Pt 8 r13 (the Rule) that the proceedings continue as representative proceedings in respect of all such represented retailers, subject to providing their names and address in an affidavit. 24 The defendants in each proceeding filed their own notices of motion seeking orders:

• summarily dismissing or staying the proceedings as an abuse of process; • alternatively, striking out the Summons in so far as it purports to plead a representative action;

• alternatively, ordering that the proceedings not continue as representative proceedings. 25 The defendants' motions differed in form, and some sought in the alternative an order that the plaintiff pay security for costs (Red 32-42). Nothing turns on the detail. 26 The plaintiff in each action filed a further motion after Einstein J delivered his first judgment (see below).

Proceedings before Einstein J 27 The motions were heard by Einstein J, who gave his first judgment on 11 September 2003 (Keelhall Pty Ltd t/as "Foodtown Dalmeny" and 6 Ors v IGA Distribution Pty Ltd formerly known as Davids Distribution Pty Ltd & 3 Ors, etc [2003] NSWSC 816). Paragraphs from this judgment are hereafter cited as J1 etc. 28 Einstein J refused the relief sought by the plaintiffs, indicating that he would be dismissing the plaintiffs' several notices of motion. Orders to that effect were ultimately made on 7 November 2003 (Red 189). His Honour held that the represented retailers did not have the "same interest" within the meaning of the Rule and that the proceedings were an abuse of process as regards their purported representative nature. Einstein J summarized his reasons as follows:

138 A number of disparate and in some cases alternative reasons have been given for the making of orders that the proceedings not continue as representative proceedings. Where the reasons are grounded upon alternative bases, each of those bases supports the making an appropriate order.

139 Insofar as the proceedings seek to invoke the court procedures of discovery to facilitate the litigation the holding has been that the subject litigation funding arrangements proposed by the opt-in procedure are against public policy as well as comprising an abuse of the court process. This justifies the making of an "otherwise order" within Part 8 rule 13 (1).

140 For the reasons given above all of the persons whom plaintiffs propose to represent cannot be said to have the "same interest" in the proceedings. Here again the making of an "otherwise order" within Part 8 rule 13 (1) is appropriate.

141 An altogether disparate but proper ground for the Court's refusal to permit the proceedings to go forward as representative proceedings is to be found in the Overriding Purpose Rule. I refer here to a recent development in this State, which the Court is also entitled and indeed required to take closely into account. Part 1 of the Supreme Court Rules, as modified by Amendment No 337, elucidates the overall objectives of practices and procedures as specified in the Rules.

142 The overriding purpose of the Rules is to facilitate the " just, quick and cheap resolution of the real issues " in civil proceedings. The overriding purpose clause imposes an obligation on the court to give effect to the overriding purpose when it exercises any of its powers. The opt-in proposal would not be just to the defendants where the proposal is grounded upon the monopoly held by Firmstone which is about utilising that special position by marketing the rights to participate and by insisting upon non negotiable conditions in that regard.

143 The court has a discretion to stay proceedings which constitute an abuse of process. To my mind insofar as these proceedings are sought to be pursued as representative proceedings that discretion should be exercised by staying the proceedings and/or the making now of an "otherwise order" pursuant to Part 8 Rule 13. Whilst in many situations the commencement of representative proceedings plays a crucial role in permitting consumers an opportunity to have their legal rights determined when it can be done efficiently and effectively on their behalf by one person with the same community of interest as other consumers… , this is not an appropriate case in which that community of interest is demonstrated. Further and for the reasons already given, to permit the proceedings to go forward as representative proceedings, far from facilitating the just, quick and cheap resolution of the real issues, would give rise to a procedural morass likely ultimately to be able to be resolved only by a disaggregation of the representative proceedings into separate proceedings. 29 The learned judge made findings referable to the role of the litigation funder Firmstone, the funding arrangements, and the retainer of the solicitor, Mr Richards. 30 Einstein J held that merely because the proceedings were financed by Firmstone in the role of litigation funder did not in itself make them champertous or an abuse of process. Nevertheless, a combination of factors including the size of the funder's anticipated profit led his Honour to conclude that the proceedings were an abuse. The proposed distribution of "Opt-In" notices would constitute trafficking in litigation that ought not to be permitted to go forward. 31 On 30 July 2003 Mr Richards wrote to the solicitors representing the various defendants notifying them that the lead plaintiffs proposed at an early stage of the proceedings to seek an order for discovery of the names and addresses of all other members of the class of represented retailers. The letter attached a list of the represented retailers of whom the lead plaintiffs were aware as at 24 July 2003 and on whose behalf the particular proceedings had already been brought (Blue 89ff). The names listed constitute "the 2100" clients referred to below. 32 Einstein J held that there should be opportunity for further evidence and submissions in relation to 2100 persons who were not parties but who had already indicated their consent to join the appropriate proceeding (Red 144C-146). At the hearing on 31 October 2003, the lead plaintiffs moved for orders (Red 43ff) whereby the 2100 existing clients would be individually informed of the proceedings and invited to lodge a consent as named plaintiffs, thereby electing to be joined as plaintiffs and not merely participate as consenting represented parties. This procedure was modelled on the decision in Cameron v National Mutual Life Association of Australasia [No 2] [1992] 1 Qd R 133, discussed below. 33 This further application was rejected by Einstein J for reasons delivered on 6 November 2003 (Ekaton Corporation Pty Ltd v Shahin Enterprises Pty Ltd [2003] NSWSC 1018, hereafter referred to as the "second judgment"). His Honour found that there was no power to grant the relief sought. He concluded that the classes of persons proposed to be joined did not have the "same interest" within the meaning of the Rule. He also held that joinder as plaintiffs would be futile because the limitation period had already expired. These further plaintiffs' motions were dismissed by order 3 of the Orders made on 7 November 2003. 34 Additional difficulties were identified with respect to claims for restitution arising out of transactions outside New South Wales and the Australian Capital Territory. 35 The final Orders included an order that the proceedings not continue as representative proceedings and the dismissal of the plaintiffs' discovery applications.

Limitation Act and represented parties 36 The limitation period expired either six years after the date of each payment or on 5 August 2003, being six years after the decision in Ha. Einstein J ruled that it was unnecessary to determine the precise cut-off point for limitation purposes (J12). The various proceedings were commenced shortly before the limitation period expired. 37 It was found (J22) that the representative proceedings only came into Mr Firmstone's mind when the limitation clock had started to run out and when it was clear that various claims then laid before the wholesalers were not going to be settled. Mr Firmstone readily admitted that he had brought about the proceedings for the purpose of stopping the clock for limitation purposes. 38 The Limitation Act 1969 speaks, in conventional terms, of actions that "shall not be brought after the expiration of [x] years from the date on which the cause of action arose". Cameron, which was a decision of the Full Court of the Supreme Court of Queensland constituted by McPherson SPJ, Ryan and Moynihan JJ, discusses the application of such a provision to unnamed persons on whose behalf representative proceedings are commenced under a rule similar to Pt 13 r8. McPherson SPJ refers (at 135-6) to case law discussing the qualified sense in which those represented are "full parties" to the proceedings. But this, his Honour held, is not the critical issue in the limitation context. In that context the question is whether those represented brought an action. McPherson SPJ held (at 137) that the terms of the Queensland rule concerning representative proceedings (O3 r10 of the Rules of the Supreme Court (Qld)) meant that the action was brought by the named plaintiffs and also the unnamed persons represented by them. 39 Ryan J dealt with the appeal on an alternative basis. The third member of the court, Moynihan J, indicated his concurrence with the two streams of judicial reasoning, stating (at 144) that:

For the reasons given by McPherson SPJ I am however inclined to the view that the action was "brought" on behalf of the unknown but purportedly represented parties from the time of its institution.

40 At an earlier stage in the Cameron litigation it had been held that the action could not proceed as representative proceedings. The claim by the lead plaintiffs to sue "on behalf of and for the benefit of" a broader, defined class was struck out. The Full Court nevertheless held that the proceedings were an irregularity, but not a nullity, as regards their purportedly representative nature. The discussion about the application of limitation statutes to representative actions proceeded from this starting point. 41 Einstein J referred with approval to the reasoning of McPherson SPJ, as he then was, on this point in his first judgment (at J163-166), concluding (at J167) that: 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. 42 As indicated, the plaintiffs later invoked Cameron in aid of an application that (proceeding from the finding in the first judgment that the Rule had not been engaged) the Court should nevertheless grant leave under Pt 8 r8(1)(b) to permit the 2,100 to be added as named parties. The judge proceeded in his second judgment on the basis that the purportedly represented persons were never in any sense parties to the proceedings commenced shortly before the expiry of the limitation period. He referred to Pt 8 r11(3)(b), which treats the addition of a party in those circumstances as being effected on the date on which the amendment to that effect was made. 43 In his second judgment (at [35]) Einstein J described as a "misconception" the plaintiffs' assumption that where representative proceedings are regularly commenced under the Rule by a plaintiff on behalf of numerous persons with the same interest in proceedings, the persons so represented are to be regarded as parties to the proceedings. Citing Pt 8 r13(4) in particular, his Honour held (at [39]) that persons represented by either a plaintiff or a defendant are not parties. He did not, however appear to depart from his earlier endorsement of McPherson SPJ's reasons in Cameron about time ceasing to run for Limitation Act purposes as regards properly represented persons (cf [14], [15] of second judgment). 44 Like McPherson SPJ, I consider that status as a party is not critical to the application of the Limitation Act to representative proceedings that are properly constituted. In New South Wales it is the Rules of Court which determine when an action is begun for the purposes of the Limitation Act (Fernance v Nominal Defendant (1989) 17 NSWLR 710 at 720 per Gleeson CJ). Where Pt 8 r13 is properly engaged, the proceedings are in terms "commenced… by [the lead plaintiff] as representing [the persons having the same interest in the proceedings]. In other words, the limitation clock stops for the whole group (see also American Pipe & Construction Co v Utah 414 US 538 (1974)). This conclusion about the Limitation Act is consonant with the principle that represented persons are bound by the outcome of issues decided in the representative proceedings (see below). The conclusion does not prevent the defendant from raising as against the lead plaintiff (who was undoubtedly a party) and/or the persons represented any other available defence even if it is not common to all (cf Cameron at 134-5). The conclusion makes it unnecessary to consider the joinder of additional parties that was considered by Einstein J in his second judgment. 45 During the hearing in this Court, Mr Archibald QC (representing Campbells Cash & Carry Pty Ltd, the defendant in the Fostif proceedings) accepted that the Limitation Act is met by both the lead plaintiff and those represented, provided the jurisdictional requirement of the Rule is satisfied at the outset by timely proceedings filed by the lead plaintiff (CA Tr p97). He confined his submissions critical of Cameron to the situation as it presented itself to Einstein J at the time of the second judgment, ie on the assumption that the proceedings had not duly engaged the Rule at the outset. To the uncertain extent that any of the other respondents suggested otherwise I would not accept their submission on this point.

1. Are the proceedings in their existing form an abuse of process? 46 Einstein J concluded that the representative proceedings were an abuse of process. His orders and his reasons in the first and second judgments indicate that he regarded as an incurable abuse the participation of any person other than the lead plaintiff. The orders staying the proceedings to the extent that they are representative proceedings meant that the represented persons have lost any chance for overcoming the impact of the Limitation Act on their several claims. 47 The critical conclusions as to abuse of process, public policy and trafficking in litigation are at J60-66 and the summary at J138-143 of the first judgment. The summary is set out above. These reasons indicate that his Honour would have dismissed the proceedings (apart from the claims on behalf of the lead plaintiff personally) even if there were no difficulties with the application of the Rule. 48 The appellants suggest that the matters of greatest weight to the judge were that:

(a) the activities of Firmstone constituted "trafficking in the retailers' litigation" ;

(c) there were irregularities in the retainer between the solicitor, Firmstone and the clients. 49 The respondents did not dispute this summary, but correctly point out that a wider category of problems concerned his Honour.

(a) Firmstone's role 50 Firmstone generally provides advice and assistance in relation to indirect tax matters. Its principal, Mr Firmstone is a chartered accountant. 51 In the representative proceedings Firmstone 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. 52 Firmstone has undertaken financial responsibility for the whole litigation, including the provision of contractual indemnity of the retailers against the risk of any adverse cost orders and the proffering of security for costs. 53 Firmstone has an arrangement with Horwath GST Pty Ltd with respect to the administrative work associated with licence fee recovery litigation. Horwath attends to advertising, communications with clients (including mail-outs), maintenance of appropriate databases and responding to client queries. Firmstone has agreed with Horwath as to a 50/50 split of its 33?% fee based on what is recovered for retailers. 54 Firmstone has retained Robert Richards and Associates (hereafter the solicitor) as solicitors for the project as a whole. The solicitor advises Firmstone and represents retailers introduced by Firmstone who are willing to be lead plaintiffs or represented persons. The solicitor appears on the record for the lead plaintiffs. 55 I infer that the primary judge accepted the evidence of Mr Firmstone when the latter described the funder's role in the following terms (J16):

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

(i) conducting negotiations on behalf of represented tobacco retailers, including in relation to any settlement or other discussions with the defendants (or any of them) which may be necessary. 56 Firmstone had organised and funded proceedings in 2002 brought by 900 smaller retailers and a number of Shell franchisees against British American Tobacco (BATA) and Philip Morris Ltd (PML). These were settled on terms involving at least full recovery of the licence fees. Firmstone received 30% of the settlement in respect of the vast majority of the retailers. 57 In February 2003 further proceedings were commenced in the Commercial List of the Equity Division by Keelhall Pty Ltd & Ors v IGA Distribution Pty Ltd & Ors (formerly known as Davids Distribution). Robert Richards & Associates was acting for the plaintiffs, retained by Firmstone. Defences were filed, but the proceedings were not listed for trial by the time (in the third quarter of 2003) the Limitation Act 1969 would bar any further claims. This was the context in which Firmstone promoted the proceedings now before the Court as a last ditch effort for all of their existing and anticipated clients to be able to recover on what by this stage appeared to be well-established causes of action which had, to date, always culminated in favourable settlements following Roxborough. 58 Firmstone continued to seek out additional retailers as clients. It acquired its clients through word of mouth and advertisements. Each client provided it with an accepted letter of retainer with an attached Letter of Authority. There were minor difference between the retainer for clients obtained before October 2002 (see Blue 5/1004-1012) and those obtained from 1 October 2002 (see Blue 1042ff). The letters clearly set out the respective roles of Firmstone, Horwath and the client. 59 In 2002 approximately 9500 smaller retailers had sued in the Commercial List of the Equity Division to recover licence fees from the two largest wholesalers, BATA and PML. Those proceedings were compromised on the basis that the retailers recovered 105% (excluding interest) of the amount they had paid BATA and 100% of what they had paid PML. The element of compromise lay in the interest component (the purchases had been effected five years previously). In each case, 30% of the amount recovered was paid to Insolvency Management Fund Ltd, a litigation funder. 60 Three matters distinguish the present proceedings from those heard in 2002 and the Keelhall proceedings commenced in February 2003. The first is that additional wholesalers have been sued. The second is that the limitation period expired shortly after the commencement of these proceedings and well before the time when the matter came before Einstein J. The third difference is that the instant proceedings are claimed to be representative proceedings on behalf of classes of retailers some of whose identities are not known to the lead plaintiffs or their funder. 61 Firmstone has agreed to act on each client's behalf in all dealings with the tobacco wholesalers, doing everything considered necessary or appropriate to try and secure the refund entitlement plus interest, including whatever legal action may be appropriate. Firmstone undertook to meet all costs and not charge the client anything unless and until it was successful. The "success fee" was disclosed as 33?% of any moneys received in respect of tobacco licence fees (including interest thereon). In the event that legal costs were awarded in any court proceedings, Firmstone would retain this amount to contribute to the costs the firm had borne in running the court proceedings. Firmstone has also undertaken to meet any costs awarded by the Court against the participants in the matter. 62 Each prospective client was asked to provide all invoices from all of the tobacco suppliers to its business in relation to the period from 1 July 1997 to 5 August 1997 inclusive; and to sign indicating agreement to Firmstone's terms. The attached Letter of Authority authorised Firmstone to act in all dealings and to receive all moneys including interest in respect of tobacco licence fees. As from 1 October 2002 the Letter of Authority also authorised Firmstone to enter into a settlement agreement without referral to the retailer provided the amounts offered by the suppliers were not less than 100% of the tobacco licence fees paid to them. From 11 July 2003 this was lowered to 75% of the claim (Blue 1094). 63 As Einstein J pointed out (J64), the control over the litigation given to Firmstone by the clients extended to the right to give instructions as to how the claims were to be moulded, what evidence to rely upon and similar matters. 64 By June 2003 Firmstone had received written authorities from a large number of retailers. This is "the 2100" clients, although the number is less because some retailers paid amounts in the relevant period to more than one wholesaler. 65 There are however many similarly-placed retailers whom Firmstone has been unable to locate but on whose behalf the various proceedings have been purportedly commenced. The identity of these retailers is almost certainly known to the wholesalers, who have obvious reasons for not revealing them to Firmstone. (The respondent to the Arrilla proceedings has suggested that it may have some particular difficulties in locating all relevant records, but this is a matter that can be addressed when it makes a general response to any discovery that is ordered.) 66 Mr Firmstone estimated that the number of potential claimants in the proceedings before Einstein J were in the order of 10,000 with a likely average claim of about $4,000 per person (Black 56, 58). 67 There was evidence, apparently accepted by Einstein J, as to the possible amount of licence fees "retained" by wholesalers. This gives an indication of the size of the business opportunity being pursued by Firmstone in the current litigation, in the context where it is now too late for any other claims to be brought. The opposite side of the same coin is that it indicates the extent of the windfall gain that the wholesalers will keep if they can resist the application of Roxborough by the procedural issues raised by them in the current proceedings. In opening the case before Einstein J the plaintiffs stated that (J8):

The figures obtained by Firmstone pursuant to requests under the Freedom of Information Act , 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. 68 Mr Firmstone also deposed (J17):

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. 69 Einstein J was highly critical of the role adopted by Firmstone in consequence of the arrangements it had made with its existing clients in the proceedings. The judge accepted that the mere fact that proceedings were financed by third parties with no interest in the outcome other than repayment and profit from the litigation was not itself sufficient to invoke the jurisdiction of the court to stay proceedings as a abuse. He also recognised that very great care must be taken lest the court use its power to deny access to justice (J52). He was nevertheless persuaded that Firmstone's activities constituted "trafficking in the retailers' litigation" (J60). 70 The judge found (J20) that Mr Firmstone had not himself taken any steps to contact the named plaintiffs so as to ensure that they were aware of the risk involved in their possible exposure to costs. Nor had steps been taken to ensure that the plaintiffs were aware of the prospect that they may have to give evidence in court. The relevance or weight of these particular findings as to disclosure is unclear. For my part I cannot see the problem. Firmstone has indemnified the client retailers against any costs liability and there is no ground for thinking that its capacity to meet such indemnity was at risk. The judge found that an employee of the firm, Mr Proud, had been advised to tell the plaintiffs what was involved as regards costs (J20). His findings about Mr Firmstone include acceptance that Mr Firmstone will communicate progress to the represented persons as occasion warrants (J16(f), above). These facts fit with the general role being assumed by Firmstone. The proceedings were at an early stage at the time that the defendants moved for summary dismissal. 71 The appellants submit that what Firmstone proposes is no different in substance from what it has done on behalf of the more than 10,000 retailers who have already recovered. The role of the funder and Horwath reflects the nature of the litigation, involving repetitive tasks on behalf of a large number of retailers none of whom is claiming a large sum and each of whom is, on the evidence, content to leave matters in the hands of Firmstone and the solicitor on the terms negotiated. It is further submitted that the trend of modern case law touching the impact of access to justice principles upon traditional attitudes to champerty (itself no longer a crime or a tort in this State) does not sustain his Honour's pejorative description of Firmstone's role. It was also submitted that the finding that Firmstone have a "very clear opportunity … to abusively influence the conduct of the proceedings" is unsupported. It also ignores the presence of the solicitor, Mr Richards as the legal fulcrum of representative proceedings that, if allowed to go forward, will be conducted under the control of the Supreme Court. I generally accept these submissions, for reasons detailed below. 72 Einstein J also concluded that Firmstone's fee was "inordinately high" (J61). He calculated the possible return from the expanded proceedings at between $4-5 million plus reasonable costs, up to 50% higher if full interest is recovered (J61-2). He continued: 63 When one adds to these figures the fees referable to the conjoined proceedings against the other tobacco and petroleum companies, the magnitude of the fees to be charged is, I accept, truly extraordinary. The fact that other funders have received like returns has no relevance when the propriety of their arrangement has not been tested.

65 Reference has earlier been made to the returns to Firmstone which is a central structural parameter of the arrangements it proposes. That concern reflects the proposition that "[t]he greater the share of the spoils that the provider of legal services [effectively here Firmstone] will receive, the greater the temptation to stray from the path of rectitude " (cf R (Factortame Ltd) v Transport Secretary (No 8] [2003] QB 381 at 413[85]. Notwithstanding the emphasis given above to the significance of the return to Firmstone, the Court readily accepts that anyone who provided services to tobacco retailers in the environment following the decision in Roxborough could in the main only expect to be paid out of recoveries in the litigation (cf R (Factortame) at [79]). It may be that there is authority for the proposition that a disproportionately high return to a litigation funder does not of itself constitute unlawful champerty: Buiscex Ltd v Panfida Foods Ltd (1998) 28 ACSR 357. However even if the emphasis given to the significance of the return to Firmstone be misplaced, the circumstance that Firmstone is capitalising upon, and seeks the Court's assistance to further, the monopoly to sell to the target opt-in group for the stipulated remuneration, the rights that Firmstone has effectively acquired [or the position which it has effectively achieved], colours its proposal as one presently constituting an abuse of process. 73 The matter that appears most to have troubled his Honour is the monopoly advantage enjoyed by Firmstone in light of the limitation bar that fell shortly after commencement of the various proceedings. 74 I shall address the issues touching Firmstone after dealing with a largely independent factual challenge mounted against the judge's adverse findings about the solicitor.

(b) The solicitor's role 75 Mr Richards had earlier experience with tobacco licence fee refund claims, having acted for Franklins in claims against BATA and PML that were settled. He told Mr Firmstone that he would be happy to be the project solicitor "on the usual basis" (J17). Mr Firmstone was cross-examined about the steps that had been taken in terms of what Einstein J described as "such sparse contacts as had occurred with those persons who had already been retained by Firmstone" (J19). Specimens of standard form communications between Firmstone and retailers and between Firmstone and the solicitor were annexed to his Honour's first judgment. 76 The judge's finding that there were irregularities in the retainer between the solicitor, Firmstone and the clients contributed to the conclusion that the proceedings were an abuse of process. In his summary of "the whole of the complex" from which the abuse of process was discerned (J64) the primary judge cited:

• the evidence as to the lack of communication between the solicitors and the now plaintiffs; • the tenuous relationship between the plaintiffs and the solicitor on the record, and the nature of the tenuous relationship which the target opt-in group would have with the solicitor. That solicitor has been engaged by Firmstone "as a principal" and not "as agent for [Firmstone's] clients" and has no costs agreement with those clients. That solicitor is said to have no recourse for fees against those clients [although this does not seem to be documented otherwise than by the statement of engagement " as principal and not as agent for Firmstone's clients "]; • the evidence as to the contractual constraint upon any direct communication between the solicitors and the plaintiffs or the target opt-in group which may only take place by means of the conduit already referred to; … 77 The primary findings are at J25 - 35. Einstein J relied particularly on the terms of two letters of retainer as between Firmstone and the solicitor dated 6 April 2001 and 27 November 2002. Copies of the letters were annexed to the judgment (Red 158ff). 78 The earlier letter recorded the solicitor's agreement to assume responsibility for the carriage of several matters in the Federal Court and the District Court (not including the present matters). The second letter dealt with a retainer by Firmstone "or on behalf of your clients on-going basis" (sic). It noted an agreement that future matters will be undertaken on the same terms as the previous letter, subject to the detailed charging arrangements set out in an attached costs agreement. 79 Included in the conditions are the following: Whilst you are acting for your client you have engaged me as principal and not as agent for your clients.

My responsibilities in respect of the matter include (but may not be limited to):

(2) attendance to preparation of documents required by courts including affidavits and orders. Filing of those documents:

(4) appearance (except where appearance by counsel) at directions hearings.

I understand that you and your staff will provide assistance to me in respect of the matters. 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 me. You will inform me of all material oral communications between yourself and your clients. • you will liaise with your clients. I will not directly liaise with your clients. • you will provide sufficient staff to support any court hearings including attendance at court to assist counsel and to liaise with witnesses. Notification to clients I understand that you have notified your clients as to my involvement in the matter and they have agreed to me representing them. 80 Einstein J was particularly critical of a statement that "You will liaise with your clients. I will not directly liaise with your clients". He held:

33 In any event and insofar as the retainer letters concern Robert 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 liaise 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 liaise 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 liaise 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. 81 The appellants submit that his Honour was wrong in the primary and secondary conclusions drawn from the letters of retainer. In particular, the judge erred in construing the letter as an undertaking not to liaise directly with the clients. I agree with the appellants that the letter did not preclude the solicitor from communicating with his clients or those in the classes represented by them. At its highest, it stated an intention that Firmstone would be involved with client liaison. Mr Richards gave evidence that he never intended to abrogate any right of direct communication with his clients (Black 54). His employed solicitor also gave unchallenged evidence to similar effect (Blue 252-9). I see no reason why this evidence should not be accepted. 82 Furthermore, I see nothing wrong in principle in such an arrangement if it has the informed consent of the ultimate client. Thus, an overseas client may instruct a solicitor through an attorney, indicating that day to day liaison is to take place with the attorney. An insured owner of a motor vehicle whose claim for indemnity is accepted by the insurer may place the matter in the hands of that insurer, leaving it to the insurer and the retained solicitor to do whatever is necessary, consistent with the ultimate recognition of the owner's position as client. The insurance analogy also illustrates the regularity of informed arrangements whereby solicitors represent both insurer and insured as principals, even though conflicts of interest issues may arise and, if they do, will have to be dealt with properly (see generally Mercantile Mutual Insurance (NSW Workers Compensation) Ltd v Murray [2004] NSWCA 151, 13 ANZ Ins Cas ¶61-612). For many years, barristers declined to have direct contact with their clients: I am unaware that this was ever said to have a tendency to abuse of process. 83 In my view Einstein J drew too long a bow in his condemnation of the retainer arrangement. There is no finding and no basis on the evidence for a finding that this retainer had some particular tendency towards abuse of process. The settlement conflict of interest scenarios hypothesised in J33 are speculative and far-fetched, in my opinion. The fears about discovery are inconsistent with the evidence and rest upon the false footing of the finding about forswearing of the right of direct contact. During submissions, the judge raised with Mr Insall SC a concern that the statement in the letter was a self-denying ordinance that might interfere with the solicitor's obligation to ensure the client's compliance with discovery obligations. My reading of Mr Insall's submission is that he did not embrace this proposition (Black 157). I would reject it on the evidence, particularly in light of s142(2) of the Evidence Act 1995 (the so-called Briginshaw principle). 84 In fact, Mr Richards communicated directly with his clients as the need arose and the correspondence shows both awareness of and attention to professional obligations. 85 When he dealt with retainer issues (at J25ff), Einstein J held that the written evidence as to retainer was to be preferred to Mr Richards' recollection. His Honour did not however discuss the correspondence revealing that the solicitor had in fact communicated with the lead plaintiffs and that he had been meticulous in ensuring that they understood their obligations with respect to discovery and responding to notices to produce directed at them personally (Blue 8/1823ff). The responsibilities expressly assumed by the solicitor in the Firmstone retainer letter (above) also negate any abdication of a proper role. 86 The evidence reveals the solicitor adopting the normal role as a solicitor on the record in litigation in the Supreme Court. It was not incumbent on Mr Richards to interview retailers personally, at least not at the present stage of the proceedings where Defences have not even been filed. There is no suggestion that he has in any way departed from his responsibility as an officer of the Court. A permanent stay ought not to have been based upon the conclusion that his conduct revealed the actuality or tendency of abuse. 87 Indeed, the involvement of the solicitor should have been placed in the scales against the findings of abuse and tendency to abuse directed at Firmstone (see Elfic Ltd at 145[107], R (Factortame Ltd) v Secretary of State for Transport, Local Government & the Regions (No 8) [2003] QB 381, Clairs Keeley (No 2) (A Firm) v Treacy (hereafter Clairs Keeley (No 2) [2004] WASCA 277 at [75]-[77]).

(c) Funding arrangements, public policy, abuse of process and trafficking in litigation 88 The primary judge held that the funding arrangements including the contemplated opt-in procedure merited the staying of the representative proceedings on several independent though cumulative grounds. The funding arrangements:

• were unjust to the defendants, independently enlivening a power stemming from the Overriding Purpose Rule ("just, quick and cheap": Pt 1 r3); and

• constituted "trafficking in litigation". 89 His Honour's response to these conclusions was the effective dismissal of the claims made on behalf of the represented retailers (both identified and yet to be identified). This occurred independently of the finding that the Rule permitting representative proceedings was not engaged. It is now too late for fresh claims to be filed. 90 The perceived evil of maintenance at common law lay in the very act of officious intermeddling with litigation, rather than in supporting an unfounded claim or defence (Fleming, The Law of Torts 9th ed, LBC, p689). Champerty was maintenance that involved a division of the spoils (or savings) derived from the litigation. 91 Over a decade ago the New South Wales Law Reform Commission observed in its Discussion Paper Barratry, Maintenance and Champerty, DP 36, May 1994 at s2.55: The considerations of public policy which once found maintenance and champerty so repugnant have changed over the course of time. The social utility of assisted litigation is now recognised and the provision of legal and financial assistance viewed favourably as a means of increasing access to justice.

This conclusion is reinforced in this State by the Maintenance and Champerty Abolition Act 1993 and by the trend of caselaw in recent years. 92 The provenance and scope of the Act are discussed in Smits v Roach [2004] NSWCA 233. The Act abolished both the crime and tort of maintenance (including champerty). It preserved the effect of any rule of law as to the cases in which a contract is to be treated as contrary to public policy or as otherwise illegal (s6). This reservation has no direct application to the present case, because no issue has arisen as to the enforceability of Firmstone's funding contracts. 93 Section 6 means that litigation funding arrangements made without express statutory authority are still subject to scrutiny if the validity of the contractual arrangements is challenged. But, for reasons explained below, it is not correct in this State to conflate the principles of maintenance/champerty with those touching abuse of process, or view them as arming a defendant with a right to stay proceedings because they are maintained (even champertously). 94 Modern courts have, in the words of Lord Roskill, "adopted an infinitely more liberal attitude towards the supporting of litigation by a third party than had previously been the case" (Trendtex Trading Corporation v Credit Suisse [1982] AC 679 at 702). This is so even in jurisdictions where the crime and tort have not been abolished. 95 A leading decision is Magic Menu Systems Pty Ltd v AFA Facilitation Pty Ltd (1997) 72 FCR 261. The Full Court of the Federal Court was considering an application by a defendant to restrain a funder from assisting a franchisee of the plaintiff in litigation alleging contravention of the Trade Practices Act 1974 by misleading and deceptive representations. The Court considered developments in the common law attitude towards champerty, noting (at 267) 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…. [S]upport of legal proceedings based upon a bona fide common interest, financial or philosophical, must be permitted if the law itself is 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. 96 These remarks were in a context where the Court acknowledged that the common law of Australia still recognises the torts of maintenance and champerty. As indicated, this is no longer the situation in New South Wales. 97 Even at common law, a defendant could not by application for injunction or stay obtain in effect interlocutory relief that would stop a plaintiff with a viable cause of action from proceeding. Abuse of process had to be demonstrated, independently of complaint that the plaintiff was receiving the unlawful assistance of a third party. The cases are referred to in Roux v Australian Broadcasting Commission [1992] 2 VR 577 at 608-9. See also Hodges v New South Wales (1998) 62 ALJR 190 at 193 (Brennan J), Magic Menu Systems at 268 and Elfic Ltd v Mack [2003] 2 Qd R 125 at 137[66]. 98 It is unnecessary to consider whether these principles extend to a situation where a defendant could clearly demonstrate that the litigation involved criminal activity. Such litigation would be an abuse of process in some circumstances at least. But this reservation has no bearing on the present situation, for two reasons. Contestable allegations of criminality are not apt for resolution through the interlocutory processes of civil litigation; and the crime has been abolished in this State. 99 In my view, McMurdo P correctly stated the law in Elfic when she said (at 137[67]):

The mere fact that proceedings are financed by third parties with no interest in the outcome other than repayment and profit from the litigation is not itself sufficient to invoke the jurisdiction of the court. Courts should be careful not to use that power to deny access to justice to a party who has sought to fund bona fide proceedings in a way which may be contrary to public policy unless that which has been done amounts to an abuse of the court's own process…. See also Magic Menu Systems at 268-9, Stocznia Gdanska SA v Latreefers Inc (No 2) [2000] EWCA 17, [2001] 2 BCLC 116 at [59], Clairs Keeley (No 2) at [73]. 100 These changes in attitude to funders have been influenced by concerns about access to justice and heightened awareness of the cost of litigation. Governments have promoted the legislative changes in response to spiralling costs of legal aid. Courts have recognised these trends and the matters driving them. "Ambulance chasing" still has negative connotations in many quarters, but it is now widely recognised that there are some types of claim that will simply never get off the ground unless traditional attitudes are modified. These include cases involving complex scientific and legal issues. The largely factual account in the book and film A Civil Action has demonstrated the social utility of funded proceedings, the financial risks assumed by funders, and the potential conflicts of interest as between group members in mass tort claims propounding difficult actions against deep-pocketed and determined defendants. 101 In the report, Access to Justice Lord Woolf wrote (Ch 17 s2):

It is now generally recognised, by judges, practitioners and consumer representatives, that there is a need for a new approach both in relation to court procedures and legal aid. The new procedures should achieve the following objectives: (a) provide access to justice where large numbers of people have been affected by another's conduct, but individual loss is so small that it makes an individual action economically unviable;(b) provide expeditious, effective and proportionate methods of resolving cases, where individual damages are large enough to justify individual action but where the number of claimants and the nature of the issues involved mean that the cases cannot be managed satisfactorily in accordance with normal procedure; (c) achieve a balance between the normal rights of claimants and defendants, to pursue and defend cases individually, and the interests of a group of parties to litigate the action as a whole in an effective manner. This passage was cited with approval by the English Court of Appeal in Sayers v Merck SmithKline Beecham plc [2003] 3 All ER 631 at 634[2]. I too would endorse these principles as reflective of goals consonant with the Overriding Purpose Rule of the Supreme Court Rules and contemporary attitudes to civil litigation. 102 The respondents sought to draw support from Clairs Keeley (a Firm) v Treacy (2003) 28 WAR 139 (hereafter referred to as Clairs Keeley (No 1)). This prompted the appellants to submit that that decision ran against the tide of appellate authority in Australia, England and Canada (as to England, see eg Hamilton v Al Fayed (No 2) [2003] QB 1175; as to Canada, see eg McIntyre v Attorney-General of Ontario (2002) 218 DLR 4th 193). 103 There are significant points of distinction that make it unproductive to examine Clairs Keeley (No 1) in detail. In Western Australia the common law of maintenance and champerty continues. The claims of the funded plaintiffs were based on alleged breaches of fiduciary duty, negligence and the Fair Trading Act 1987 (WA), ie they were incapable of assignment. It was held that there was a "de facto assignment" of the cause of action (at [134]) and an improper bargain by the solicitors for a share in the litigation (at [181]). There was non-disclosure of an important aspect of the arrangements as between the funder and the solicitor ([158]-[168]). The solicitor's role was found in these circumstances to entail a position of conflict and breach of fiduciary duty ([169]-[171]). Despite all of this, the stay was conditional (See at [707] and also Clairs Keeley (No 2)). 104 A champertous arrangement may have a particular tendency to lead to abuse of process, whether or not champerty remains tortious. But it is that tendency, and not its champertous nature as such, that must be considered in an application for a stay. To the extent that Einstein J focussed upon Firmstone's champertous intermeddling as such and the common law policies proscriptive of the tort of champerty (eg J43-44, 56, 66) his Honour erred, in my respectful view, despite his acknowledgement that champerty by itself did not amount to abuse of process (J52). 105 His Honour adverted to contravention of public policy as an independent basis for the stay (see at J139). However, the reasons indicate that he had in mind the champertous nature of the funding arrangements and the reservation of public policy in matters contractual by s6 of the Maintenance and Champerty Abolition Act 1993. In my view, it is dangerous to move beyond the scope of the reservation in s6 without very clearly identifying some alternative ground for invoking public policy (see Smits at [69]). "Public policy" in the sense of the policy of the law (cf Cattanach v Melchior (2003) 199 ALR 131 at [60]-[75]) has changed and become more narrowly focussed in this area. It has nothing to do with the "private notions of judges as to what is good or expedient policy" (Giles v Thompson [1993] 3 All ER 321 at 335, Clairs Keeley (No 1) at 154[73]). The law now looks favourably on funding arrangements that offer access to justice so long as any tendency to abuse of process is controlled (see eg Re William Felton & Co Pty Ltd (1998) 145 FLR 211 at 220, Gore v Justice Corporation (2002) 119 FCR 429 at 450[59], Stocznia Gdanska at [59]). As I explain below, the present litigation attracts the following principle recently stated by Lord Phillips MR giving the judgment of the English Court of Appeal in Gulf Azov Shipping Co Ltd v Idisi [2004] EWCA 92:

Public policy now recognises that it is desirable, in order to facilitate access to justice, that third parties should provide assistance designed to ensure that those who are involved in litigation have the benefit of legal representation. 106 Reference to the Overriding Purpose Rule (Pt 1 r3) does not take the matter any further. This rule does not provide an independent basis for a stay in matters such as the present, where none would otherwise exist. Justice to the parties involves the application of legal principles in a fair trial according to proper procedure. A defendant has no claim in "justice" to burke otherwise viable proceedings simply because a plaintiff receives assistance and encouragement from a third party. As indicated, any complaint emanating from the defendant must be based upon abuse of process, not concern based on the claimed inequality of proceedings in which the other party has funding assistance. 107 "Trafficking in litigation" is sometimes condemned in the caselaw, but the content of that proscribed activity is elusive, all the more so in light of a relaxed common law attitude to litigation funding. 108 McMurdo P, whose judgment in Elphic is cited above, said (at 137[65]) that "the courts must remain vigilant to ensure in the interests of public policy that there is no trafficking in litigation or speculating in causes of action for improper gain". She cited Roux at 606, where Byrne J listed a number of factors touching judicial attitudes to funders, including:

Finally, the court would doubtless be astute to prevent any practice that smacked of trafficking in or speculating in causes of action. It may be that for these reasons public policy will play a different role where the maintenance takes the form of indemnity or funding rather than that of assignment: Y L Tan, "Champertous Contracts and Assignments" (1990) 106 LQR 657. 109 In Kaukomarrkinet O/Y v "Elbe" Transport-Union Gmbh (The "Kelo") [1985] 2 Lloyds Rep 85, Staughton J (at 89) quoted Lord Roskill in Trendtex (at 703):

The court should look at the totality of the transaction. If the assignment is of a property right or interest and the cause of action is ancillary to that right or interest, or if the assignee had a genuine commercial interest in taking the assignment and in enforcing it for his own benefit, I see no reason why the assignment should be struck down as an assignment of a bare cause of action or as savouring of maintenance. Staughton J continued:

The contrast is between trafficking in litigation or selling lawsuits as articles of commerce on the one hand and taking an assignment in a case where one has a genuine commercial interest on the other. The former is invalid and the latter is not. 110 As assignment of a chose in action on particular terms was described by Lord Wilberforce as "manifestly savour[ing] of champerty, since it involves trafficking in litigation - a type of transaction which, under English law, is contrary to public policy" (Trendtex at 694). The vice identified by his Lordship lay:

… in the introduction of the third party. It appears from the face of the agreement not as an obligation, but as a contemplated possibility, that the cause of action against CBN might be sold by Credit Suisse to a third party, for a sum of US$800,000. This manifestly involved the possibility, and indeed the likelihood, of a profit being made, either by the third party or possibly also by Credit Suisse, out of the cause of action. 111 On this approach, maintenance/champerty and "trafficking" are similar in their unlawful tendencies. In Stoczina Gdanska the English Court of Appeal said (at [61]:

We think that it is undesirable to try to define in different words what would constitute trafficking in litigation. It seems to us to connote unjustified buying and selling of rights to litigation where the purchaser has no proper reason to be concerned with the litigation. "Wanton and officious intermeddling with the disputes of others in which they [the funders] have no interest and where that assistance is without justification or excuse" may be a form of trafficking in litigation. Lord Mustill's words, quoted by Simon Brown LJ in the context of an application to stay, are powerfully descriptive of [a] kind of plain and obvious champerty…. 112 The reference to Lord Mustill is to his description of the policy underlying the former criminal and civil sanctions against champerty. In Giles v Thompson [1994] 1 AC 142 at 161 Lord Mustill said:

It is sufficient to adopt the description of the policy underlying the former criminal and civil sanctions expressed by Fletcher Moulton LJ in British Cash and Parcel Conveyors Ltd v Lamson Store Service Co Ltd [1908] 1 KB 1006, 1014: 'It is directed against wanton and officious intermeddling with the disputes of others in which the [maintainer] has no interest whatever, and where the assistance he renders to the one or the other party is without justification or excuse.'

This was a description of maintenance. For champerty there must be added the notion of a division of the spoils. 113 In Clairs Keeley (No 2) the Full Court of the Supreme Court of Western Australia (Steytler, Templeman and McKechnie JJ) referred to the funding agreement in that case as being champertous, containing features that were contrary to public policy, and "a de facto assignment of the plaintiffs' causes of action to [the funder], which was in effect, trafficking in litigation" (at [1]). The Court said (at [71]) that:

It is acceptable for the litigation to be pursued by plaintiffs who, although funded by a third party, are acting in their own interests in the pursuit of justice in their respective causes, and are so acting on the advice of independent solicitors. It is not acceptable for the litigation to be pursued in such a way that the interests of the plaintiffs are subservient to those of the funder. That would be an abuse of process. 114 I respectfully disagree with the categorical thrust of the last two sentences, although I observe that this was a decision in a State where the tort has not been abolished. In my opinion, a conclusion about abuse of process must stem from a finding directed at the actual or likely conduct of the party in whose name the litigation is brought (or its agents). The court is not concerned with balancing the interests of the funder and its clients. Indeed, it is not concerned with the arrangements, fiduciary or otherwise, between the plaintiff and the funder except so far as they have corrupted or have a tendency to corrupt the processes of the court in the particular litigation. It is only when they have that quality that the defendant has standing to complain about them. Even at common law, the aspects of public policy hostile to champerty were concerned with the interests of the opposing party, not the party who had entered into the champertous arrangement (Giles v Thompson [1993] 3 All ER 321 at 336 per Steyn LJ). 115 Funding may occur in relation to both ordinary and representative proceedings. If the latter, the court has power to enquire into and mould orders and conditions protective of the arrangements with the funder. It appears that matters additional to concerns for the processes of the court may be taken into account in that context (see below). Whether they go beyond concern to ensure that those represented make an informed choice need not be explored. It is however an elision for these matters to intrude into an abuse of process inquiry. 116 The additional vice of champerty compared with mere maintenance lay in the attempted profiting from the assistance provided. But a profit motive is no longer the touchstone of illegality, even at common law. Many people seek profit from assisting the processes of litigation, including lawyers, expert witnesses, printers, couriers, forensic accountants. A desire to earn a "success fee" may have a tendency to corrupt processes and that tendency may be greater if the fee is higher and the activity is unregulated. But such a finding should focus clearly on the dangerous tendency, not the profit as such. 117 Funding arrangements can be harsh and exploitative as between the funder and the litigant. Section 6 of the Maintenance and Champerty Abolition Act 1993 preserves the effect of any (modern) rule of law as to the cases in which the contract is to be treated as contrary to public policy or otherwise illegal. Doubtless the arrangements are also capable of engaging the Contracts Review Act 1980 and other bases of jurisdiction concerned to prevent unconscionable exploitation of the vulnerable. A legal practitioner is also accountable professionally (Smits). These matters may also be considered to some degree if the funded litigation is a representative proceeding that falls under judicial control. 118 It may be accepted that the greater the share of the spoils that the funder may receive, "the greater the temptation to stray from the path of rectitude" (R (Factortame) Ltd at [85]). Einstein J did not, however apply this cautionary principle to the facts (J65). Ultimately his adverse findings turned on matters other than the quantum of Firmstone's fee. 119 In general, it is simply no business of a defendant to be taking up the cudgels on behalf of the funded litigants who are either parties or represented persons, invoking interlocutory processes ostensibly on behalf of the funded litigants but in reality in its own interest. As this appeal demonstrates, such satellite proceedings have the capacity of diverting resources and attention from the true issues as between the plaintiffs (and those they represent) and the defendant. 120 Defendants may in proper cases seek security for costs and they may obtain special costs orders against funders if the proceedings fail. But they have no entitlement (as contended for by the "Metcash respondents" (Orange 82)) "to be protected from litigation where the Appellants have been indemnified by an intermeddler, against the negative effect of adverse costs orders". 121 Einstein J explained why the proposal that Firmstone distribute Opt-In notices under the court's direction would involve "trafficking in the retailer's litigation" constituting an abuse of process:

60 Ultimately I am persuaded that the proposed form and distribution of the 'Opt-In' notices will constitute trafficking in the retailers' litigation. The decision by Firmstone not to commence proceedings until the very end of the limitation period has in effect given it a monopoly over the means of access to recovery and has deprived the retailers of any bargaining power in respect of fees or otherwise. In simple terms Firmstone is now trafficking in the retailers' claims because it has, but they do not have, the means of pursuing them: it is now seeking to sell to the retailers, for the stipulated remuneration, the rights that it has to those claims. This is the reason why the arrangement proposed is tainted by champerty.

64 The present is a case where the opt-in proposal exhibits the hallmarks of the unjustified buying of rights to litigation. The abuse of the process of the court seen to be afoot is to be discerned from the whole of the complex made up of:

• the nature and type of the approaches to the plaintiffs and the target opt-in group; • the evidence as to the lack of communication between the solicitors and the now plaintiffs; • the tenuous relationship between the plaintiffs and the solicitor on the record, and the nature of the tenuous relationship which the target opt-in group would have with the solicitor. That solicitor has been engaged by Firmstone "as a principal" and not "as agent for [Firmstone's] clients" and has no costs agreement with those clients. That solicitor is said to have no recourse for fees against those clients [although this does not seem to be documented otherwise than by the statement of engagement " as principal and not as agent for Firmstone's clients "]; • the evidence as to the contractual constraint upon any direct communication between the solicitors and the plaintiffs or the target opt-in group which may only take place by means of the conduit already referred to; • the ready acceptance by Mr Firmstone of the proposition that his involvement is in a speculative investment in other persons litigation; • the fact that Firmstone has absolutely no interest in the subject matter of the proceedings (outside of the agreements which it has procured); • the possibilities of a conflict of interest as between Firmstone and the plaintiffs/ the target opt-in group in relation to a number of matters; • the extraordinary amounts to be received from the proceeds of settlements and split as between the Firmstone interests and the Horwaths interests; • the circumstance that those proposed to be approached to 'Opt-In' are to be given a non-negotiable, once ever , opportunity to participate, for the reason that the limitations period has expired; • the fact that retailers who have entered into agreements with Firmstone are not fully aware of the consequences of what they are doing particularly in relation to adverse consequences of litigating. - none of the now plaintiffs nor the target opt-in group have received the benefit of such legal advice as has been obtained in relation to prospects of success in the proceedings; - none of the now plaintiffs nor the target opt-in group have received advice as to the possible steps which may inconvenience them in terms of the matters which are likely to have to be attended to in preparation for the hearing such as discovery and preparation of statements; - none of the now plaintiffs nor the target opt-in group have been informed of the possibility that they may be liable for costs in relation to the proceedings. To the contrary retailers have been induced to enter into the agreement on the basis that they will not suffer any costs order against them. [notwithstanding that the possibility of the target opt-in group being required to pay costs may be slender, this does not excuse those promoting the litigation from the necessity to ensure that those who are approached be fully informed of all matters material to their being in a position to make a decision];

• Firmstone has complete control over settlement of these proceedings. In the case of agreements based on pre October 2002 letters Firmstone has a complete discretion (Exhibit PX p 1440 to 1448). As from 1 October 2002, Firmstone has been authorised to settle without reference to the retailer on the basis of receiving the principal of the claim (Exhibit PX p 1481) or 75% of the claim (Exhibit PX p 1530). This control extends to the right to give instructions as to how the claims are to be moulded, what evidence to rely upon and similar matters;

• the fact that there is of course no particular reason why it would be in the interests of Firmstone to apprise those to be approached of aspects of the 'opt-in' suggestion, which may disincline those approached to agree to participate - throwing up yet again a reason for the closest of scrutiny to be given to a promotional exercise where the promoter is engaging in no more and no less than a commercial venture;

• the minimal amount of each retailers' likely dividend compared to the enormous return to Firmstone shows that the real motivation for the proceedings is the latter;

• the evidence that particular retailer groups had negotiated a fee of less than 33? percent and in the case of Shell a sliding scale of fees ranging between 15 and 30 percent reflecting a past ability to negotiate significantly lower fees with those in a strong negotiating position, to be contraposed with the now situation where the limitation period having expired , only the 33?% fee is to be offered;

• there is the potential (and this is sufficient for present purposes) for decisions to be made by Firmstone contrary to the wishes of individual plaintiffs;

• in effect Firmstone is now engaged in selling the right to join the proceedings;

• the very clear opportunity of the funder to abusively influence the conduct of the proceedings. 122 This was not a case whose facts engaged any residual category of "trafficking" (if it truly exists in this State). I say this on two broad grounds. The first is that the funder's activities would not merit this conclusory opprobrium even in a jurisdiction that retained the common law of champerty. On close examination, many of the judge's reasons are directed at Firmstone's lack of independent interest in the proceedings and the profit motive driving Firmstone's endeavours. These matters do not establish champerty in the modern law, let alone abuse of process arming the respondents with a right to stay viable proceedings. Other factors taken into account include the findings about the solicitor's role which I have already rejected. There are concerns about the level of awareness of the retailers about their role in the litigation which, if relevant to abuse of process, are either not substantiated or (if they are) were remediable by a less drastic remedy than a permanent stay. Additional matters are addressed in the next section of this judgment. 123 The second point has not been debated before us and my views are necessarily tentative. However, the cases involving the elusive notion of "trafficking" all appear to involve the funder taking some role akin to that of an assignee in relation to claims that are incapable of assignment because they are bare causes of action for damages. By contrast, the retailers' causes of action are for money had and received, historically a claim in debt. Debts are readily assignable, even to those who hope to recover more than they pay the assignor, without apparently engaging the principles about trafficking. See Mutual Pools & Staff Pty Ltd v Commonwealth (1994) 179 CLR 155 at 176. Cf at 173. See also Starke, Assignment of Choses in Action in Australia (1972), Butterworths, chapter 11.

2. Did Firmstone's involvement justify a permanent and unconditional stay because of abuse or tendency of abuse of process? 124 Undoubtedly, Firmstone provided financial and other assistance designed to encourage individual retailers to opt-in and join the representative proceedings purportedly launched on their behalf. It is equally clear that Firmstone's motives were not altruistic. From Firmstone's point of view, its involvement was a "speculative investment in other persons' litigation" (Mr Firmstone at Black 71). 125 The impact of the Limitation Act 1969 was seen by his Honour to have created a monopoly situation for Firmstone, in that (with one qualification) retailers who decline to join the representative proceedings on Firmstone's terms will have lost any right to pursue the wholesalers. But monopolies are not universally or self-evidently against the public interest. These being opt-in representative proceedings, those retailers who do not wish to buy the product on offer are free to abandon any prospect of recovery from the wholesalers without the right to recover passing to Firmstone. It is difficult to perceive the evil of such a consequence. The opposite side of the coin is that Firmstone's business enterprise has armed retailers who have not yet sued with the only effective way of vindicating their legal rights and preventing unjust enrichment by those wholesalers who have yet to be made accountable. Undoubtedly minds will differ about these opposing descriptions of the present litigation, but this only tends to underline their irrelevance to the abuse of process inquiry. I have already indicated why the court's power to stay for abuse of process is not based upon solicitude for the economic interests of those maintained by the funder. 126 The qualification mentioned early in the preceding paragraph is however a significant one: the Rule arms the court with power to impose conditions upon granting or continuing its permission for the representative proceedings to go forward. The court is always free to "otherwise order" and to use the threat to do so as the basis for ensuring that matters proceed fairly as regards all members of the group, that its processes are not abused and that the risk of abuse is minimised. The appellants acknowledge that this power would extend to modifying Firmstone's proposed terms as to the basis of its support for the retailers who opt-in. 127 If the Rule applies and if the court does not "otherwise order", the prospects of recovery on behalf of each represented retailer appear favourable, on the present state of the evidence. This is an inference drawn from the satisfactory outcomes (from the plaintiffs' point of view) of all earlier proceedings of this nature. It is also based upon my present assessment of overall prospects. I further observe that Einstein J has not found otherwise and that Defences have not yet been filed. It is at least arguable that none of the cases involve facts materially different to those established by the ultimately successful plaintiffs in Roxborough. 128 In making these observations I do not overlook the foreshadowed arguments suggesting material distinctions based upon the legislation of particular States or Territories or the forms of invoices that do not clearly identify a licence fee component. At this stage of the proceedings it is appropriate to say no more than what appears above. There are serious issues that the respondents wish to raise as to their liability to individual retailers and classes of retailers. The judicial management of the representative proceedings (if permitted to go forward) must ensure that the respondents' rights to raise issues and defences are not compromised. 129 I have also not overlooked the respondents' expressed desire to cross-examine individual retailers to show that they may have been ignorant that wholesalers were passing on to them the burden of licence fees or that they may have intended wholesalers to keep the licence fee in any event. At this space of time this will not be an easy task, even if retailers enter the witness box. I also think that few of the retailers will prove to have been as naïve and generous as suggested. It is my assessment that the vast majority of the claims will be addressed solely on the documentary evidence. I would in any event reject the submission that the subjective intent of a retailer is controlling (see below). 130 One starts therefore from a position that the individual claims are well and truly viable, both theoretically and practically. It follows that the orders under appeal have effectively closed off causes of action that are genuinely advanced, that have good prospects, and that large numbers of people (ie the 2100 who have already opted in favour of Firmstone's terms) wish to proceed, using the combined services of Firmstone, Horwath and Mr Richards. One may readily infer that many others would opt-in on similar terms when notified of all of the circumstances. 131 What also needs to be borne in mind is that, at the stage when these representative proceedings were launched, claims by retailers would undoubtedly have presented as risky ventures. For obvious reasons wholesalers had shown considerable determination to resist recoveries, even after the High Court decision in Roxborough appeared to clear the way. The Keelhall proceedings commenced in February 2003 had slowed down in the Commercial List. Ignorance and inertia, added to the fear of significant cost exposure compared to a comparatively small level of recovery, were guaranteed to deter many retailers from entering the lists as plaintiffs, absent the "encouragement" offered by Firmstone. 132 In my opinion, the court's basal inquiry should be whether the role of the particular funder has corrupted or is likely to corrupt the processes of the court to a degree that attracts the extraordinary jurisdiction to dismiss or stay permanently for abuse of process. The standard of proof is high where (as here) the plaintiff has a genuine and viable cause of action. The court will lean in favour of moulding its remedy so as to eliminate the abuse, resorting to dismissal only as a last resort where this is impossible (see generally Jago v District Court (NSW) (1989) 168 CLR 23 and Clairs Keeley (No 2)). 133 I do not understand it to be suggested that any abuse of process has occurred to date. The proceedings are in proper form and they have been placed under judicial scrutiny at the earliest opportunity. The question whether the Rule has been engaged and the conditions under which the litigation will be permitted to go forward as representative proceedings have been submitted to the court. There is no suggestion that the retailers have been misled about the arrangements under which the litigation is proposed, nor has any evidence been led as to an existing conflict of interest between the funder and the retailers (contrast Clairs Keeley). The respondents have not suggested that any misrepresentation of fact or law appears in Firmstone's advertising material or the opt-in notices. 134 I am unpersuaded as to the relevance or force of the primary judge's findings about the particular matters of which individual retailers have not yet been informed or advised. Correspondence from Firmstone to retailers contains an offer to answer any questions and provide any necessary assistance (Blue 820). Like Einstein J, the respondents have criticised Mr Firmstone for using his employee Mr Proud to pass on certain information. This point strikes me as entirely lacking in merit. A similar comment applies in relation to the complaint based on the lack of evidence that Mr Richards has yet interviewed individual retailers or advised them as to prospects of success. It is not a prerequisite of representative proceedings being instituted or continued that the represented persons are consulted about the conduct of the proceedings, or even have knowledge of them (Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 at 21[6], 29[33], 39[65], Arakella v Paton (2004) 60 NSWLR 334 at 349[65]). The respondents' complaints about these matters indeed are examples of the irrelevancies that an application of this nature can descend to if the court is not kept focussed upon genuine issues of abuse of process. One wonders whether the respondents would be happy with the transactional cost of a face to face interview with their solicitor every time the latter is retained to collect an outstanding debt. 135 The respondents have supported the judge's concern (J64) that retailers have been induced to enter into agreements on the basis that they will not suffer any costs orders against them. It is suggested that there is a possibility that retailers might end up paying costs personally, because a contractual promise by Firmstone provides no assurance of due performance. This, with respect, is a point wholly devoid of substance. Most contractual promises are unsecured, usually because neither party wishes to generate unnecessary transactional costs. The respondents led no evidence to suggest that Firmstone lacks the financial capacity to complete what it has started. Firmstone's accounts were in evidence (Blue 1313ff) and they give no support to any suggestion of inability to provide substantial funding. Firmstone has already offered $1million as security for costs. On closer analysis, this point proved to be yet another entirely speculative submission having nothing to do with abuse of process. 136 In similar vein, the respondents suggested that the evidence pointed to a possible conflict of interest between Firmstone and the plaintiffs/represented retailers. These temptations can assail lead plaintiffs in most types of representative proceedings. In fact, the evidence relied upon (Black 61, 71-2) amounted to no more than Mr Firmstone's proper concession as to risks inherent in any form of representative proceedings where the day to day control rested with the funder and the solicitor. One premise put to Mr Firmstone was indeed a false one, in that it was suggested that a retailer's right of recovery turned upon his or her subjective intent at the time of payment. The falsity of this proposition is addressed elsewhere in these reasons. 137 The respondents contended that the control assumed by Firmstone created the potential to lead to conflicts of interest. In my view this is a non sequitur. Judicial hostility to a funder's "control" over litigation appears to be bottomed in the proposition that excessive control is tantamount to an assignment of a bare right to litigate, although there are statements suggestive of judicial concern for the economic interests of the "controlled" litigant per se (eg Clairs Keeley (No 2) at [125]). I have already indicated my doubts about such judicial paternalism in the present context. In any event, a measure of control is essential if the funder is to manage group litigation and also protect its own legitimate interests (Clairs Keeley (No 2) at [124]). The funder's control in the present case is not excessive, especially since there is a solicitor on the record and since these are representative proceedings under judicial supervision. Firmstone has express written authority from each retailer to proceed as it is doing. One suspects that Firmstone is much better placed than individual retailers to make the forensic decisions necessary to deal with determined and well-informed opponents. 138 The possibility, even likelihood, that circumstances may arise in which situations of conflict may present themselves to those in effective control of representative proceedings calls for vigilance. But is not itself a basis for finding abuse of process meriting an unconditional stay. One area where difficulties could arise is where the funder has to address a settlement offer that treats all members of the class identically when there are in truth differences in the strength of individual claims. The present litigation does not appear to be of this nature. Problems of this sort have not been a feature of the settlement of other representative proceedings brought in the light of Roxborough. 139 The opt-in letters sent and proposed to be sent clearly authorise Firmstone to have the carriage of the litigation, including decision-making as to the basis upon which the proceedings may be settled, without any obligation to consult with individual retailers. I see no reason why this bargain can be challenged by the respondents. 140 I am unaware that it was put to Mr Firmstone that he was unwilling to negotiate or accept any modification of the terms of the opt-in arrangements proposed to the retailers. Undoubtedly it was and remains in Firmstone's interests to deal on identical terms with all represented persons. But the suggestion that the proceedings are an abuse of process on this account entirely lacks evidential support. 141 I now address the conclusion that Firmstone's fee was "inordinately high". 142 The precise basis upon which certain types of funded proceedings (representative or otherwise) may be treated as an abuse of process is at times elusive. There is little enunciation in the caselaw of the relevance of examining the rate of the funder's return in the context of abuse of process. If lingering hostility to funders is driven by concern that they are stirring up litigation, then one might think that this problem would diminish as the funder's percentage return increased. 143 The appellants argue that the evidence before his Honour indicated that Firmstone's rate was better than "the norm". The "norm" cited (Orange 8) relates to funded matters generally, not matters arising out of Ha/Roxborough. The Federal Court approved "after the event" funding at rates of 35% (see Re Addstone Pty Ltd (1998) 83 FCR 583). In the United Kingdom a 30% rate was approved in the matter of Claim Direct Test Cases [2003] 4 All ER 528. The appellants also refer to IMF having offered retailers essentially the same terms as Firmstone in exchange for 40% of moneys recovered. Einstein J held that Firmstone's terms and conditions were similar to those of a competitor involved in recovery of State tobacco licence fees, Licence Fee Recovery Services Pty Ltd, known as Feesback. 144 I would not reject this material, which is directed at showing that Firmstone's rates are not demonstrably outside some sort of general market rate. But in the absence of detailed examination of the circumstances of the other cases (and none was offered) I do not place a great deal of weight on this factor. 145 The appellants' additional arguments carry greater force. In part, they address the paucity of the judge's reasons justifying his conclusions about the "inordinate" size of Firmstone's fees and the relevance of such finding in any event. In part, they advance arguments favouring the application of free market principles to the matter at hand (subject to keeping one's eye focussed on genuine abuse of process factors). 146 A starting premise is the proposition that the Court should not lightly interfere with the autonomy of the funded clients, absent evidence of misleading or deceptive conduct on the part of the funder or oppression or misuse of the powers conferred by contract on the funder. This has even greater force where the funder uses a solicitor and submits itself to judicial supervision by invoking the processes of the Court through the application by the lead plaintiffs for orders under the Rule. 147 The whole inquiry about the level of Firmstone's negotiated reward appeared to proceed from the proposition that a champertous arrangement has to be justified if challenged by a defendant. I have indicated my disagreement with this approach in this State. 148 The appellants' next broad set of submissions point in general terms to cost/benefit issues. Experience in the instant litigation has confirmed the hugely expensive nature of such proceedings. The motions were strongly contested; not surprisingly they produced the present very substantial appeal; security for costs has already been sought and provided to the tune of $1million. Firmstone has absorbed all of the costs of the litigation, having provided its clients with an indemnity in respect of adverse costs orders. The solicitor deals with Firmstone as principal, thereby (I infer, without ruling conclusively) abjuring any basis for charging the retailers. There is certainly no suggestion on the evidence that the solicitor intends to do so. 149 To my mind it is inconceivable that individual plaintiffs with an average claim of $1000 or perhaps a little more would hazard the litigious risks and costs involved of taking on these determined and experienced defendants in separate proceedings. There may be some, but they would be very exceptional, in my view. If the retailers had sued separately there is every risk that they would have been met by the same arguments mounted against the application of Roxborough that have been invoked by the respondents. 150 I also observe that there is no evidence indicating whether the negotiated consideration payable by the funded retailers is likely to exceed the costs payable on a do and charge basis by a solicitor for the work contemplated if each retailer sued separately and if the solicitor engaged the funder to do the "leg work". 151 It is necessary to remind oneself that the matter presently at issue is whether the respondents have demonstrated that the proceedings are an abuse of process. The Court is not at this stage addressing the conditions that should attend representative orders. The standard of proof for establishing an abuse of process and thereby obtaining the summary dismissal or permanent staying of proceedings is a high one (see Williams v Spautz (1992) 174 CLR 509 at 518-520). Appropriately so, since questions of access to justice are involved. 152 In my opinion, Einstein J erred when he concluded that the respondents had established abuse of process stemming from the fee arrangements entered into between Firmstone and its clients. The other matters did not justify this conclusion either.

3. Should the proceedings have been permitted to go forward as representative proceedings? 153 There were several strands of reasoning supporting the order that the proceedings not continue as representative proceedings. In part, it rested upon the findings of abuse of process. In part, the judge concluded that the Rule was not engaged because the parties sought to be joined in the various classes did not have the "same interest". In part, there were discretionary factors, although these largely proceeded from the adverse conclusions as to abuse of process. 154 My conclusions in relation to abuse of process mean that the validity of the primary judge's discretionary determination to "otherwise order" is undermined (House v The King (1936) 55 CLR 499). If there is power to permit the proceedings to go forward as representative proceedings, with or without the participation of the wider group of retailers whose identity is presently unknown to Firmstone, then this Court would need to exercise the discretion afresh or alternatively remit the matter to the Equity Division for that purpose. 155 Accordingly, it is necessary first to address the power question.

(a) The general scope of Pt 8 r13 156 Part 8 r13 (hereafter, the Rule) relevantly provides:

(1) Where numerous persons have the same interest in any proceedings the proceedings may be commenced, and, unless the Court otherwise orders, continued, by or against any one or more of them as representing all except one or more of them.

(4) A judgment entered or order made in proceedings pursuant to this rule shall be binding on all the persons as representing whom the plaintiffs sue or, as the case may be, the defendants are sued but shall not be enforced against any person not a party to the proceedings except with the leave of the Court.

(5) An application for leave under subrule (4) shall be made by motion, notice of which shall be served personally on the person against whom it is sought to enforce the judgment or order.

(6) Notwithstanding that a judgment or order to which an application under subrule (5) relates is binding on the person against whom the application is made, that person may dispute liability to have the judgment or order enforced against him on the ground that by reason of facts and matters particular to his case he is entitled to be exempted from the liability. 157 The function and scope of this Rule are expounded by the High Court in Carnie v Esanda Finance Corporation Limited (1995) 182 CLR 398. See also Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at 260[11]-[17] and 267[27]. 158 Carnie establishes that the requirement that the numerous persons have "the same interest" may be satisfied even though each has a separate cause of action. 159 In Carnie the two lead plaintiffs had entered into a loan contract and chattel mortgage with Esanda Finance Corporation. Being unable to meet the first instalment they signed a variation agreement which was said to have failed to comply with the requirements of ss35 and 36 of the Credit Act 1984. Information available to the plaintiffs showed that, at the time the variation agreement was entered into, the transaction was of a kind that was regularly entered into by the financier in the course of its business. In the final analysis this was the basis for the invocation of the Rule on behalf of the class. The High Court held that the proceedings fell within the Rule, remitting the matter to the Court of Appeal to consider whether the power to order that the action not continue as a representative action should be exercised. 160 Mason CJ, Deane J and Dawson J refrained from expounding the outer limits of the Rule. They urged attention to its language and its obvious purpose, which they described as "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" (at 404). Their Honours said that (ibid):

It may be [the Rule] extends to a significant common interest in the resolution of any question of law or fact arising in the relevant proceedings. Be that as it may, it has now been recognised that persons having separate causes of action in contract or tort may have 'the same interest' in proceedings to enforce those causes of action. Mason CJ, Deane and Dawson JJ agreed with the reasons given by Toohey and Gaudron JJ, subject to the particular comments made by their Honours. 161 Toohey J and Gaudron J held that the plaintiffs in Carnie had the "same interest" in testing their several loan agreements against the Credit Act 1984 to see if Esanda's method of calculating the amount owed was correct. They continued (at 420):

If that method was not in accordance with the Act, then those persons have a common interest in obtaining the relief of being released from liability for the credit charges. That is, they have the same interest in these proceedings in the sense that there is a significant question common to all members of the class and they stand to be equally affected by the declaratory relief which the appellants seek.

Although each contract will be different in the details of the amounts involved, this will not eliminate the convenience of finding a right to a release which is common to all of them. As Lord Macnaghten said [Duke of Bedford v Ellis (1901) AC 1 at 7]: 'In considering whether a representative action is maintainable, you have to consider what is common to the class, not what differentiate the cases of individual members.' 162 Toohey and Gaudron JJ cited with approval the New Zealand decision of R J Flowers Ltd v Burns [1987] 1 NZLR 260 which held that the fact that claims arose under separate contracts was not an objection to the use of a representative action. Still referring to this case, they continued (at 418):

The defendant pleaded defences which, if established, would remove any common interest. But at an early interlocutory stage of the proceedings the Court was not prepared to elevate the mere expression of contest by a defendant into an automatic barrier to a representative action. Later (at 420-1) they held that the authorities were clear that the fact that claims arise under separate contracts did not mean that the requirement for the same interest was defeated. Brennan J (at 408) generally adopted the reasons of Toohey and Gaudron JJ as to the scope and purpose of the Rule (see at 408). See also McHugh J at 427. 163 The High Court was at pains to emphasise that a judge faced with an application under the Rule should not elide the separate considerations of deciding whether the members of the class had "the same interest" in the proceedings and the discretionary factors touching whether the court should "otherwise order" and so prevent the continuance of proceedings in the form of representative proceedings (see eg per Toohey J and Gaudron J at 415). For example, McHugh J said (at 427) that:

… a plaintiff and the represented persons have 'the same interest' in legal proceedings when they have a community of interest in the determination of any substantial question of law or fact that arises in the proceedings. Other factors may make it undesirable that the proceedings should continue as a representative action, but that is a matter for the exercise of discretion, not jurisdiction. See also Muin v Refugee Review Tribunal & Ors [2002] HCA 30, 190 ALR 601 esp at [255]-[256]. 164 Each member of the Court in Carnie acknowledged that the discretion to "otherwise order" would require a judge to consider whether the particular case was appropriate to continue as a representative action and to ensure that, if it did so, the autonomy and legitimate interests of the group members were adequately protected (see per Mason CJ, Deane J and Dawson J at 405, per Brennan J at 408, 410, per Toohey J and Gaudron J at 426, per McHugh J at 427, 430-1). Mason CJ, Deane J and Dawson J (at 405) and McHugh J (at 431) cited with apparent approval the remarks of Gleeson CJ in Carnie in this Court (Esanda Finance Corporation Ltd v Carnie (1992) 29 NSWLR 382 at 388) where he mentioned the need to deal with such important matters as whether or not consent is required from group members; the right of such members to opt out of the proceedings; the position of persons under a disability; alterations to the description of the group; settlement and discontinuance of the proceedings; and the giving of various notices to group members.

(b) The primary judge's reasons for holding that the Rule was not engaged 165 Einstein J held that all of the persons whom the plaintiffs propose to represent cannot be said to have the "same interest" in the proceedings (J140). His reasons appear at J81ff. 166 Some of the reasons appear to elide the conceptually distinct issues of the Rule's capacity to apply and of the desirability of allowing the particular proceedings to go forward as representative proceedings (see eg J82, 136, 140). It is possible that I do the judge an injustice in this observation, but for abundance of caution I shall treat his remarks about the inappropriateness of the proceedings being permitted to go forward as representative proceedings as based inter alia upon the absence of the vital "same interest" factor. 167 Einstein J held that the "same interest" requirement meant that at least some of the relief must benefit all plaintiffs (J91(b), 92). This criterion appears to have been found not to be satisfied (see J99-101). The appellants have submitted that the judge's proposition about relief having to be beneficial to all is "just wrong". I shall return to it. 168 When he turned to consider the Rule's application to the present facts, his Honour mainly addressed matters apart from the relief sought in the various proceedings. He principally examined the issues of law and fact likely to arise. 169 The legal issue was stated as "the principle enunciated in [Roxborough]". The judge held that this was a binding principle of law. "In reality, it is not an issue to be decided in the proceedings" (J95). This conclusion is the focus of the appellants' second broad line of attack. The appellants submit that there are genuine questions about the scope and application of Roxborough that call to be decided, the resolution of which will significantly affect all members of the various classes. Some of the respondents in this Court certainly raised live issues about the scope of Roxborough, repeating similar arguments raised below. In some of the proceedings, involving as they do jurisdictions other than New South Wales and the Australian Capital Territory and invoices that do not on their face disclose the licence fee component, the common legal issues within one proceeding that are relied on may not spill over into all of the proceedings subject to these appeals. 170 The third broad area addressed by the judge was whether the factual issues in the proceedings threw up the requisite community of interest. Einstein J held that the Rule could not apply because the issues of fact differed (materially) as between each individual transaction, thereby precluding different retailers from having the requisite "same interest" (J94(b), 96-117). A major strand in this reasoning was the proposition that the subjective contemplation of each retailer at the time the relevant payment was made would require to be examined, a matter that will necessarily vary from transaction to transaction (see esp J103, 109, 113, 116). The appellants also challenge this reasoning, in my view successfully. Of course, its refutation does not establish the presence of a factual common interest. 171 Some of the arguments advanced by the respondents contend for a different approach to that adopted by Einstein J, but one that nevertheless supports the orders under appeal.

(c) Necessity of identifying community of issues in originating process? 172 It was common ground that the Rule's jurisdictional requirement about the represented persons having the "same interest" in the proceedings must, when challenged, be shown to exist from the outset. The Rule states that proceedings are to be considered by reference to the requirement that numerous persons have the same interest in the proceedings. 173 One variant of the submissions advanced by Mr Archibald QC, representing the defendant in Fostif proceedings, Campbells Cash and Carry Pty Ltd, was that a plaintiff is restricted to the matters articulated in the initiating process. If factual matters in common are relied on, the originating process must plead the material facts applicable to each member of the class so as to demonstrate the requisite community of interest. Mr Jackman SC also submitted that plaintiffs must demonstrate "on the face of the pleading" that they have the same interest (CA Tr p118). 174 I cannot accept this legal proposition which in any event was not established when one turned to the summonses. 175 The proposition certainly represents best practice. But it is not to be found in the Supreme Court Rules, nor was any case cited in its support. Philip Morris (Australia) Ltd v Nixon (2000) 170 ALR 487 at 515[131]-[137] is authority to the contrary. It seems to me that it will be open to a plaintiff called upon to justify having invoked the Rule to establish by evidence that the proceedings are likely to involve common issues of fact and/or law. If this can be shown, it will be no impediment that the matter was not fully spelt out in the initiating process. For one thing, the common issue might be one of law, something not required to be pleaded. For another, originating process is capable of amendment. 176 There is no reason why the common questions of fact and/or law that must be discernible from the outset may not inure in a defence or line of legal argument that the lead plaintiff can show that the defendant proposes to advance at the appropriate stage in the proceedings. It is open to a defendant to deny or foreswear any such intention. (This certainly did not happen in the present case. Indeed, the arguments advanced by the defendants both confirmed and added to the plaintiffs' enunciation of the common issues.)

(d) Necessity for "beneficial common relief"? 177 Einstein J accepted the defendants' submissions that if it is not possible, at least, to formulate some claim to relief which is beneficial to all plaintiffs, then the plaintiffs do not have the "same interest" in proceedings (J92, emphasis in original). "Plaintiffs" in this context included represented persons. His Honour held (at J91) that this proposition stemmed from the reasoning of Toohey and Gaudron JJ in Carnie (with whom, for these purposes, Mason CJ, Deane and Dawson JJ agreed). He cited with emphasis Toohey and Gaudron JJ's quoting with approval (at 416) of Lord Macnaghten's statement in Duke of Bedford v Ellis [1901] AC 1 at 8 that:

Given a common interest and a common grievance, a representative suit was in order if the relief sought was in its nature beneficial to all whom the plaintiff proposed to represent. 178 He also referred to their Honours' statement (at 424, emphasis added by Einstein J) that:

The appellants [in Carnie ] have brought themselves within r13(1). There are numerous other persons capable of being clearly defined who have the same interest in these proceedings in that they will be equally affected by the declaratory relief which the appellants seek. 179 Later passages in the first judgment indicate acceptance of the view that the proceedings failed because the plaintiffs "cannot obtain any beneficial common relief in these proceedings" (J101). 180 Campbells Cash & Carry Pty Ltd supported these conclusions (Orange 97). 181 Mr Jackman SC, representing the Australian Independent Wholesalers group of respondents, advanced a variant of this reasoning. He submitted that the "acid test" under the Rule is that if the plaintiff wins, the others represented by the plaintiff win; and if the plaintiff loses, the others lose. This was explained as being in the sense of obtaining/failing to obtain the relief sought, whether declaratory or pecuniary. It followed, on this submission, that if there was a question as to whether individual members of the group have suffered at all, then none would be suing in the same interest. On this submission it would not suffice that the whole group would win on a substantial issue which each had in common. Nor could the Rule be invoked in circumstances where there was a genuine possibility that some members might stumble before the final hurdle of obtaining the relief prayed for on their behalf by the lead plaintiff. 182 Mr Jackman sought to justify this basal proposition by reference to a passage in the Canadian case of Shaw v Real Estate Board of Greater Vancouver (1976) 36 DLR (3rd) 250 at 254 that was cited with approval by Toohey and Gaudron JJ in Carnie at 419. Ball JA there observed:

It appears to me that the many passages uttered by Judges of high authority over the years really boil down to a simple proposition that a class action is appropriate where if the plaintiff wins the other persons he purports to represent win too, and if he, because of that success, becomes entitled to relief whether or not in a fund or property, the others also become likewise entitled to that relief, having regard, always, for different quantitative participations. Toohey and Gaudron JJ said that that observation was apposite to r13(1). 183 This was not, however, endorsement of the proposition advanced by Mr Jackman. Shaw held that it was no objection to a representative action that the damage suffered by each group member differed in amount or that, if the group was successful in the common issue, complex questions of accounting would arise. Ball JA's dictum was dealing with winning a substantial issue, not with winning the whole case. In any event, it seeks to capture when a class action is appropriate. It does not state that this is the only basis on which the Rule may be engaged. All of the judgments in Carnie stressed the need to apply the Rule's language in preference to judicial paraphrases of it. 184 The passage in Shaw also reminds that represented parties are bound by the result in the case (Irish Shipping Ltd v Commercial Union Assurance Co Plc [1991] 2 QB 206 at 238-9, Carnie at 423. See generally Spencer Bower, Turner and Handley, The Doctrine of Res Judicata 3rd ed 1996 p114). But it would be circular reasoning to contend, as Mr Jackman does, that the estoppel effect of properly instituted representative proceedings is the touchstone or acid test for the scope of the Rule. 185 Learned senior counsel did not shrink from the submission that (in contrast to Pt IVA of the Federal Court of Australia Act 1976) the Rule could not be invoked in a mass tort claim brought on behalf a group of persons allegedly injured in consequence of a single accident, such as an explosion at an oil refinery. The possibility that individual members of the group as defined by the lead plaintiff may ultimately be unable to establish causation, damage etc meant that the Rule in its traditional form in New South Wales was incapable of application to such a situation. It is permissible in the Federal Court, but this was said to be only because s33C of the Federal Court of Australia Act expressly permits the commencement of a representative proceeding where:

(a) 7 or more persons have claims against the same person; and (b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and (c) the claims of all those persons give rise to a substantial common issue of law or fact…. 186 Mr Jackman accepted that his submission was contrary to the approach enunciated by Brennan and McHugh JJ in Carnie, where their Honours stated that the test for determining whether an action is within the scope of r13(1) is whether the plaintiff and the members of the represented class have a community of interest in the determination of some substantial issue of law or fact (see per Brennan J at 408, per McHugh J at 430). This, however was said to be a minority position that found no support in the other judgments. The test enunciated by Brennan and McHugh JJ is that applicable in the Federal Court, but only (so the submission went) because their Honours' test was picked up and enacted in s33C of the Federal Court of Australia Act. 187 In my view, the decision in Carnie and the reasoning of the remaining justices contradicts Mr Jackman's basal submission as to the scope of the Rule in its traditional form. And it does not support the primary judge's requirement that it must be possible to formulate some claim to relief that is beneficial to all "plaintiffs". Both propositions involve reading into the Rule words that are not there. The true principle was stated by Brennan J in Carnie (at 408):

Rule 13(1) requires 'the same interest' in the proceeding, not necessarily the same cause of action nor an entitlement to have or to share in the same relief. 188 The reasoning in Carnie must be examined through the prism of the Court's decision, which unanimously held that the Rule's basal "same interest" requirement was satisfied on the facts. 189 The prayers for relief in Carnie included claims for:

(1) A declaration that they are not required to pay to the defendant any amount on account of credit charges as defined by the Credit Act, 1984 with respect to the Variation Agreement.

(2) A declaration that no represented debtor is required to pay to the defendant any amount on account of credit charges as defined in the Credit Act 1984 in relation to contracts as varied which fall within the class specified in paragraph 6 of this Statement of Claim.

(3) An order that the defendant not take any step under s 107 of the Credit Act 1984 or otherwise to enforce its rights against the plaintiffs or any represented debtor in relation to any credit charges as defined by the Credit Act 1984, payable under the contracts from the date of variation.

… (See (1992) 29 NSWLR 382 at 385-6.) 190 On my reading of the case, Carnie did not turn upon the form or presence of the second declaration. Rather, it was the community of interest in the issues that was reflected in the declarations prayed for that engaged the Rule. Toohey and Gaudron JJ referred (at 421-2) to discussion in the Court of Appeal about giving leave to amend the statement of claim by:

… substituting declaratory relief that went no further than determining the meaning of the Act so far as it affects those concerned on matters in which they have a common interest. In that event those debtors who do not wish to take advantage of a favourable judgment would be under no obligation to do so. That is the basis on which the matter was argued in this Court.

There are many persons who have entered into variation agreements with the respondent. They have the "same interest" in testing those agreements against the Act to see if the method of calculating the amount owed was correct. If that method was not in accordance with the Act, then those persons have a common interest in obtaining the relief of being released from liability for the credit charges. That is, they have the same interest in these proceedings in the sense that there is a significant question common to all members of the class and they stand to be equally affected by the declaratory relief which the appellants seek.

Although each contract will be different in the details of the amounts involved, this will not eliminate the convenience of finding a right to a release which is common to all of them. As Lord Macnaghten said: In considering whether a representative action is maintainable, you have to consider what is common to the class, not what differentiates the cases of individual members. 191 In other words, it was the community of interest in resolving the legal issue formulated in the prayers for a declaration that was critical to the result in Carnie, not the presence of the declarations themselves. It was certainly not an assumption that the declaration prayed for extended in terms to the several variation agreements assumed to have been entered into on the part of the class members identified by the lead plaintiffs in Carnie. 192 The relevant passage in the judgment of McHugh J, with whom Brennan J agreed, was as follows (at 430):

In Prudential Assurance Co Ltd v Newman Industries Ltd [1981] Ch 229 at 255 … Vinelott J said that in "a representative action in which it is claimed that every member of class has a separate cause of action in tort, this condition requires … that there must be a common ingredient in the cause of action of each member of the class". I see no reason to confine the rule to cases where there is a common element in the causes of the plaintiff and the represented persons. If the plaintiff and the represented persons have a community of interest in the determination of some substantial issue of law or fact in the action, they have the same interest within the meaning of the rule. 193 McHugh J was indicating that the scope of the Rule was broader than that stated by Vinelott J in Prudential Assurance. Mason CJ, Deane and Dawson JJ made the same point, in slightly more tentative terms, when they said (at 404):

It has been suggested that the expression "same interest" is to be equated with a common ingredient in the cause of action by each member of the class [ Prudential Assurance Co Ltd v Newman Industries Ltd [1981] Ch 229 at 255]. In our view, this interpretation might not adequately reflect the content of the statutory expression. It may be it extends to a significant common interest in the resolution of any question of law or fact arising in the relevant proceedings. 194 The proposition in the final sentence of this passage is substantially identical to the formulation proposed by Brennan and McHugh JJ. On this reading there are therefore at least five judgments generally supporting an approach to the Rule that is broader than that indicated by Einstein J and suggested by Mr Jackman, and certainly not confined to cases where a single prayer for final relief is actually formulated in the initiating process. 195 None of the reasoning would exclude the mass tort scenario where there are genuine common issues of law or fact. Mason CJ, Deane and Dawson JJ had no doubt that the Rule could support proceedings brought on behalf of persons having separate causes of action in contract or tort (see passage at 404 quoted above). 196 I do not think that Toohey and Gaudron JJ held otherwise. When they turned to the language of the Rule they emphasised the need to apply its language and they found it was satisfied on the facts in Carnie. 197 In my view, it is necessary to distinguish between the representative character of proceedings and the representative nature of the relief that may issue. Parties to individual torts or contracts may be entitled to claim a single declaration (as in Carnie) or a single injunction (as in J Bollinger v Costa Brava Wine Co Limited (No 2) [1961] 1 WLR 277 and H P Bulmer and Showerings Limited v J Bollinger SA and Champagne Lanson Père aet Fils [1978] RPC 79, as discussed in Prudential Assurance at 253-4). None the less so, even though the defendant may be able to advance discretionary reasons peculiar to some only of the class, eg laches or acquiescence, thereby defeating that member's entitlement to the relief properly claimed on behalf of the entire class, thereby satisfying the Rule's "jurisdictional" requirement (see Prudential Assurance at 255). 198 But it does not follow that representative proceedings cannot involve claims for relief specific to the several members of the class and that will differ as worked out as between each member of the class. Representative proceedings do not have to include a composite prayer for relief. (The prayer for relief in each summons in the present cases is properly to be viewed as a several but identical claim made on behalf of each member of the represented class, with intention that the mathematics will be worked at retailer by retailer and expressed in several money judgments, if necessary.) 199 In Carnie, the impact of the monetary orders would necessarily vary as between the individual plaintiffs, even though a common form of declaration appeared in the originating process. The principle, confirmed in Carnie, that entitlement to separate causes of action by each member of the represented class does not preclude a representative order means that a common issue may be decided even though the working out of the consequential relief will vary from person to person. It would not be fatal that relief might ultimately be withheld in some cases or that it will differ from claimant to claimant. This may (but need not necessarily) lead to the splitting of the proceedings by the court "otherwise ordering" at a later stage in the proceedings. See also Shepherd v Australia & New Zealand Banking Group Pty Ltd (1996) 20 ACSR 81 at 97-8. 200 It is not necessary at this stage to resolve the precise mechanism whereby success in the common issues would translate into judgments in favour of the several retailers for the amounts appropriate to each individual. Suffice it to say that this is not the issue faced by Einstein J in the second stage of the interlocutory proceedings before him, proceeding as they did from his decision that representative proceedings had not been duly commenced within time. 201 The Limitation Act 1969 offers no blanket defence to the claims of the represented retailers if the Rule is found to have been properly invoked (as I conclude below). Accordingly, the court would be free to sever a single representative proceeding into separate proceedings or groups of proceedings if that were desirable to address specific issues that remained after the issues in common were resolved, or if that were a practical way to arm individual retailers with individual judgments. At this stage that course strikes me as impractical. It is certainly unnecessary in light of Pt 8 r13(4) and Pt 42 r10. See also Prudential Assurance at 255A, Shaw, Irish Shipping Ltd esp at 226-7, 231-2, 244. Individual money judgments were in the ultimate contemplation of the proceedings upheld in Carnie. If moulding of the Rules to give effect to the substantive outcome becomes necessary, see also Pt 2 rr3, 12, 13, Australian Coastal Shipping Commission v Curtis Cruising Pty Ltd (1989) 17 NSWLR 6, Cameron. 202 Contrary to Mr Jackman's proposition, it is also appropriate to observe that the claim in Carnie was not defeated by the fact that, in Gleeson CJ's words in the Court of Appeal, "at least some of such persons may have been, and may still be, content with the bargain they made with the finance company" (29 NSWLR at 385); nor by the fact that the financial implications of success in the litigation would necessarily differ according to the terms of the several contracts entered into by the individual debtors. As McHugh J put it (182 CLR at 427):

The effect of the breach [of the Credit Act ] for each of the represented debtors is no doubt different from the effect for the plaintiffs. But all of them have a common interest in determining whether Esanda's procedures in relation to the variation of a credit or loan agreement comply with the Act. 203 The corresponding English rule (as it previously stood) has been construed in similar manner (see Irish Shipping at 224-7, 231-2, 244). 204 Einstein J was correct to observe (J101) that the relief sought was "in reality specific amounts in respect of each individual plaintiff" (except that I prefer not to use the expression plaintiff with reference to a member of a represented group at the outset of the proceedings). But it did not follow that this precluded the Rule's application.

(e) Inadequate or circular definition of the class? 205 Mr Hutley SC, representing Stuart Alexander & Co Pty Ltd, advanced a variant of the pleaded identity of interest point. It focussed upon the form of the pleadings, but was said nevertheless to be a proposition of substance. The particular proceedings in which Stuart Alexander & Co Pty Ltd was defendant/respondent were discontinued on undisclosed terms not long after the hearing of the appeal. Not knowing the terms of settlement, it would be unfair to infer that this stemmed from any lack of confidence in the force of Mr Hutley's submissions. I shall address the point because it is possible that the other respondents intended to embrace it. 206 The submission was that each summons is embarrassing because it does not define the class of represented persons other than by the purely circular reference to those who opt-in by acceding to Firmstone's conditions. As Mr Hutley put it, "this plaintiff will not go forward for anyone who does not pay the price" [stipulated by Firmstone] (CA Tr 57). He submitted that the Rule "is not there to convert this Court into a search engine for potential persons to buy their rights from" (CA Tr p68). 207 I reject this submission. It misreads a summons which is sufficiently clear in its main intent. Paragraph 2 of the Contentions describes the represented retailers by reference to objective criteria including, in particular, having dealt with the particular defendant in the "Relevant Period". These are identified as "plaintiffs" on whose behalf the proceedings are brought by the lead plaintiffs. 208 When the prayer for relief in each Summons is read together with the material stated as to the Nature of the Dispute, it becomes clear that the lead plaintiffs are claiming corresponding relief in favour of the several members of the class they purport to represent, such relief to be formulated as to the sums involved in favour of each co-plaintiff when and if his, her or its name is identified following the signature of the requisite opt-in notice. 209 It is true that the summons indicates in effect that the class of represented persons will be limited in due course to those who opt-in and indicate their desire to "become a named plaintiff in the proceedings [who will become] entitled to judgment in his, her or its favour". This signals the lead plaintiffs' concession that the proceedings should go forward on that opt-in basis, subject to judicial case management. 210 Undoubtedly, it is also the intent of the lead plaintiffs that participation is dependent upon submission to Firmstone's conditions. There could however be no objection to this in itself, all the more so since the conditions themselves and the management of this opt-in procedure are placed under judicial supervision by the invocation of the Rule. The capacity to negotiate those terms is not excluded. 211 The question whether those terms have a tendency to abuse of process is another matter entirely, but the summons (read fairly) is not incurably defective on the ground submitted by Mr Hutley.

(f) Common issues of law 212 In my view, the appellants have demonstrated that the Rule was engaged on the basis that there were substantial common issues of law linking the claims of each represented group of retailers. The scope and applicability of Roxborough is a genuine issue in each proceeding. 213 Each summons states under the heading Issues Likely to Arise:

Whether these proceedings are distinguishable in any material respect from the facts in Roxborough.... in which the High Court determined that the plaintiff tobacco retailers in those proceedings were entitled to recover from their wholesale tobacco supplier, amounts paid by way of tobacco licence fees in analogous circumstances to these proceedings. 214 In written submissions filed before Einstein J and referred to by his Honour in the first judgment (J81) the plaintiffs advanced the following justification for the making of a representative order:

… In each case there are likely to be substantial common issues of law as to:

• the application of the common law principle to the standard form trading arrangements of the defendant;

• the relevance, if any, to the application of the common law principle of: - the subjective intentions or understandings of the parties; and - the absence in the case of some defendants of separate itemization of tobacco franchise licence fee on invoices; and - the absence from the tobacco franchise legislation of other States of any equivalent of s41(3) of the NSW Act;

• the effect, if any, of ss2 and 3 of the Recovery of Imposts Act 1963 (NSW) and equivalent legislation in other States and the Australian Capital Territory;

• the availability of interest under s94 of the Supreme Court Act 1970 (NSW). The defendants did not dispute that these were live issues. Indeed, their submissions before Einstein J and in this Court show that some of them definitely are. It will be sufficient to address three of them.

(i) Significance of s41(3) of the Business Franchise Licences (Tobacco) Act 1987 (NSW) 215 The legislation challenged in Ha was the Business Franchise Licences (Tobacco) Act 1987 (NSW). Section 41(3) of that Act provided that, for the purposes of calculating the licence fee payable by a licensed retailer, the value of tobacco purchased from the holder of a wholesaler's licence or a group wholesalers licence was to be disregarded only if the holder of the licence had paid or was liable to pay a licence fee in respect of that tobacco. This provision was unique to the licensing schemes of New South Wales and the Australian Capital Territory, as Einstein J observed (J126). 216 Einstein J held that s41(3) was an important and critical aspect of the causes of action upheld in Roxborough (J127-134). He cited Roxborough at 523[6], 537[56], 558[109], 585[195]. He held that the application of s41(3) (or its Australian Capital Territory equivalent) to a transaction would strengthen the retailer's restitutionary claim that the common expectation of the parties would have been that the wholesaler would continue to maintain a licence and would pay or be liable to pay the ad valorem amount for that tobacco (J128, 130). "Accordingly, the decision in Roxborough cannot be said by definition to support the plaintiff's claim for restitution in states and territories other than NSW and the ACT" (J134). 217 Einstein J saw this as a consideration that underpinned "the court's decision that these proceedings cannot be permitted to go forward as representative proceedings" (J136). In my respectful view, this remark documents the presence of a genuine common legal issue. It also elides the jurisdictional and discretionary issues involved in proceedings such as these. 218 The respondents' view of the importance of s41(3) (and its Australian Capital Territory counterpart) is contested by the appellants. It has never been suggested that such contest is other than a genuine one. This particular issue about the scope of Roxborough spans the proceedings affecting the appellants/lead plaintiff(s) in the continuing proceedings by Arrilla Pty Ltd (Queensland), Whelan & Hawking Pty Ltd (Victoria), SMV Murray (Queensland), P A Neindorf (South Australia) and J M Gow (Queensland). I agree with the appellants that this represents a substantial common issue of law that attracts the Rule in these proceedings.

(ii) Subgroups in Arrilla proceedings 219 Mr Jackman SC raised a particular issue referable to the proceedings in which the lead plaintiff is Arrilla Pty Ltd. The defendant in those proceedings is ACN 001259301 Pty Ltd. It was formerly known as Australian Independent Wholesalers Pty Ltd. It supplied tobacco products from the Australian Capital Territory and from Queensland. 220 Arrilla has sued on behalf of itself and a class of unnamed persons described in par 2 of the Plaintiff's Contentions in terms identical to Fostif's par 2 (set out above), except for an additional sub-subparagraph of 2 that reads:

(ii) save for those situated in Queensland, some or all of whom did not hold tobacco retailer's licences, were the holders of tobacco retailer's licences under one or more of the Excise Acts 221 The defendant in these proceedings contends that this group is not a true class of persons who have the same interest in the proceedings. The factual basis of its objection is set out in an affidavit of Mr H R Scott, a director (Blue 7-10). This defendant (hereafter referred to as "AIW") relies upon two matters that are said to be critical to the application of the Roxborough principle, raising the possibility that purchasers in one group (ie from the Australian Capital Territory) may have a cause of action, but not the other group (ie from Queensland). During the Relevant Period AIW did not hold a wholesaler's licence in the Australian Capital Territory but did hold a retailer's licence there; and it was a licensed wholesaler in Queensland. The first matter relates to the invoicing system used by AIW at the relevant time. For Australian Capital Territory sales, the invoices do not separately identify the licence fees paid to manufacturers. It is further contended that these sums are not ascertainable because of the wholesaler's practice of purchasing tobacco from various sources and storing it indiscriminately (see Blue 9). By contrast, for the Queensland sales, the invoices to retailers identify the amount referable to licence fees (Blue 10). 222 The second difference said to be significant concerns the legislation applicable at the time in the Australian Capital Territory and Queensland respectively. For the Territory, a retailer who purchases from a licensed wholesaler who has paid a licence fee did not calculate his or her own licence fee by reference to value of the tobacco purchased (Business Franchise (Tobacco and Petroleum) Products Ordinance 1984, s28(1B)). This provision corresponded with s41(3) of the Business Franchise Licences (Tobacco) Act 1987 (NSW) (see earlier discussion). For Queensland by contrast, there was no equivalent provision. If a retailer in Queensland purchased from a licensed wholesaler, no fee was payable whether or not that wholesaler had paid a tobacco licence fee with respect to the purchased product (Tobacco Products (Licensing) Act 1988 (Qld) s24). 223 Mr Jackman submitted that these two points of distinction precluded a finding that the Rule was capable of applying across the Arrilla proceedings. I do not agree. The information points to factual and legal issues that AIW will be at liberty to raise. The points of distinction are not accepted as having legal or factual foundation by Arrilla, individually or in combination. Arrilla will seek by discovery and subpoena to put itself in a position to prove the licence fee component charged to all of AIW's retailers. The legislative differences invoked by this respondent are said to have no bearing upon the application of Roxborough to all of the retailers on whose behalf Arrilla has sued. 224 If the legal or factual issues flagged by Mr Jackman turn out to be critical in enabling AIW to resist particular retailers, so be it. But Carnie does not enable otherwise valid representative proceedings to be blocked at the outset merely because of the possibility that some class members will fail by reason of matters peculiar to themselves.

(iii) Relevance of subjective intent of individual retailers? 225 Another legal issue, common to all represented persons and to all of the proceedings, concerns the relevance of the "objective" or "subjective" intent of individual retailers. This is a discrete element of the wider issue about what Roxborough actually decided. It was flagged as a question in the court below (cf J81) and its significance was confirmed by the debate on the point that occupied some of the time of the hearing in the Court of Appeal. Einstein J himself addressed the matter and ruled upon it. 226 There were several causes of action in the Roxborough proceedings that were rejected in the Federal Court. These included claims in mistake, contract and constructive trust. The single cause of action upheld in the High Court was for money had and received, based on a total failure of consideration with respect to the failure of a distinct and severable part of the consideration for the purchase of the tobacco products. That severable part related to the licence fee whose cost was identified in the invoices provided to the ultimately successful retailers in Roxborough. The consideration failed when the licensing scheme was struck down in Ha. This was not a cause of action based upon the payer's mistake. 227 Einstein J held that the true juristic nature of the cause of action for money had and received as on a total failure of consideration required the court to pay separate regard to state of mind or subjective contemplation of each retailer at the time the relevant payments were made (see J103-114, 116). "Consideration" in this context was said to mean the state of affairs contemplated by the payer as the basis or reason for the particular payment. The respondents supported this reasoning as to the ultimate basis of the restitutionary cause of action upheld in Roxborough. 228 In David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 382 the majority of the High Court said that:

… we are not concerned in this case with what a hypothetical, experienced commercial person believed he or she was contracting for; in order to decide whether the appellants in this case have received consideration for payment of the additional moneys, we must ask what these particular appellants, in all the circumstances, thought they were receiving as consideration. In this context, consideration means the matter considered in forming the decision to do the act, "the state of affairs contemplated as the basis or reason for the payment" [citing Birks, An Introduction to the Law of Restitution (1989) p223 . And, as we have stated, the "state of affairs" existing in the appellants' minds was that the withholding tax was their liability. 229 Einstein J cited this passage at J105. As he observed at J106, the passage quoted from Professor Birks' work was expressly approved in the joint judgment of Gleeson CJ, Gaudron and Hayne JJ in Roxborough at 525[16] and the larger passage from David Securities was approved by Gummow J in the same case at 557[104]. 230 Before Einstein J, as in this Court, Mr Gageler SC submitted that it was a misconception to analyse the cause of action identified in Roxborough as having turned on the existence of the payer's subjective intention. He submitted that a proper reading of Roxborough was that the High Court had applied an objective test to ascertain the consideration that ultimately failed in light of Ha. The passage in David Securities dealt with the defence available to a payee sued on the basis of the payer's mistake (or some other restitutionary cause of action), being a defence that the payer had received good consideration for the payments sought to be recovered (see David Securities at 379-80 and generally Mason & Carter, Restitution Law in Australia at [2518]-[2522]). 231 It is sufficient for the appellants to demonstrate that there is a genuine common issue of substance about the juristic grundnorm of the cause of action to recover money on the basis of a consideration that failed. This they have done, assisted by the vigorous joinder of issue on the matter by the respondents who adopted the submissions of Mr Jackman SC on this point. 232 Since, however, the trial judge expressed views on the matter with which I disagree I think it necessary to outline my understanding of the topic. I do so tentatively in light of what I perceive to be differences within the various judgments in Roxborough. These appear to turn upon differing views about the application of equitable doctrines of unconscionability in this area (see generally Ross Grantham, "The Equitable Basis of the Law of Restitution" paper delivered at Conference on Fusion: The Interaction of Law and Equity in Commercial Law in December 2004, to be published under a book of that title edited by Simone Degeling and James Edelman). 233 I accept Mr Gageler's submission as to the nature of the Roxborough cause of action and as to the misapplication of the passage from David Securities. 234 On my reading of Roxborough, there is some disagreement in the High Court about the juridical grundnorm of the cause of action to recover money paid upon a failure of consideration. Callinan J squarely rejected any suggestion that the claim is equitable (at 589[202]-[203]). Kirby J (who dissented) also spoke of the cause of action as a common law right (at 578[167-]-[170]). The joint judgment of Gleeson CJ, Gaudron and Hayne JJ acknowledge the influence of general equitable notions in what they described as a common law count (at 525[16]). Gummow J also described the claim for money had and received as a common law right, nevertheless placing greater emphasis upon the continuing influence of traditional doctrines of equity (see esp at 554[100] and 557[104]). To his Honour, the ultimate question or trigger for liability was the unconscionability of the defendant retaining and enjoying the payments with respect to the licence fee in the events that had happened. 235 Each justice in the majority in Roxborough applied essentially similar reasoning, for present purposes. The action to recovery money paid on the basis of the failure of the whole or a severable part of the consideration is not confined to money paid under contract (see Roxborough at 525[16], 555[102]). But Roxborough, like the present case, involved contracts. The contracts were valid and made no provision for the consequence of Ha. But the state of affairs under which the plaintiffs had paid money became falsified by the decision in Ha invalidating the legislative schemes dealing with licensing fees. The common intention of the parties as manifested in their contractual arrangements had been falsified and the state of affairs concerning tax liability had altered in a manner that generated the restitutionary right of recovery, whatever its ultimate juridical basis. One would think that, even on Gummow J's focus upon the conscience of the recipient payee, an identical result will apply across the board if the triggering circumstances are relevantly identical. What is known at the present stage of these proceedings indicates that they are. 236 The point taken by the primary judge and supported by the respondents was, however a slightly different one. 237 As indicated, Einstein J held that in the present case the viability of each plaintiff's cause of action would turn upon his, her or its state of mind at the time when the invoiced payments with respect to tobacco licence fees were made. His Honour rejected the submission that the contractually-identified consideration was to be discerned in each case by an objective test applied to the various contracts which were assumed to be common in presently material respects. 238 In the restitutionary cause of action to recover money paid on the basis of total failure of consideration, "consideration" is not the criterion for enforceability of contractual promises. For one thing, the cause of action may be available in a non-contractual context. The word "consideration" in this context refers to the defendant's failure to perform what was promised (Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 350-1, 389), the failure to render the agreed return for the plaintiff's payment (Carter on Contract at [44-050]). 239 The failure is judged from the perspective of the payer (David Securities at 382, citing Rover International Limited v Cannon Film Limited [1989] 1 WLR 912 at 923). That person is the party to the contract who is seeking restitution. But, for present purposes, the critical point is that it is the benefit bargained for as distinct from that subjectively contemplated by the plaintiff/payer that is critical. In other words, one must determine, in a contractual situation, what was "the state of affairs, which was within the contemplation of the parties as the basis of their dealings" (Roxborough at 526[17] per Gleeson CJ, Gaudron and Hayne JJ); or "the state of affairs contemplated as a basis for the payments [sought to be recovered]" (id at 557[104] per Gummow J). The right to restitution only arose when Ha falsified the common, objectively discernible basis of the earlier transaction. 240 In the joint judgment, the materiality of the objective contractual manifestations is made quite explicit in the explanation why the licence fee component could be treated separately for the purpose of the law's requirement of a "total failure" of consideration. Their Honours said at 527[21] (emphasis added):

It accords with the basis of dealing, and contractual arrangements , between the appellants and the respondent to regard that part of the net total amount of each invoice referable to the 'tobacco licence fees' as a severable part of the consideration, which has failed. There is no conceptual objection to this. For the reasons already given, the tax component of the net total wholesale cost was treated as a distinct and separate element by the parties. See also at 522[5], 528[23] (last sentence). Gummow J spoke to like effect (see at 537[55[-[56] and 538[58]). 241 Einstein J held (at J109):

… the existence of [a retailer's purpose of putting the wholesaler in funds] must be determined by reference to, inter alia, the state of mind of the claimant at the time when the payments were made. Because the subjective intent underpinning each transaction would vary from retailer to retailer, the "same interest" requirement could not be satisfied and it was inappropriate for the representative proceedings to continue (see also J116, 134). 242 The High Court has in recent years repeatedly emphasised the so-called "objective theory" in contract. A party's "intention" in a contractual context refers to what would objectively be conveyed by what is said or done, having regard to the circumstances in which statements and actions happened. The court is not involved in a search for the uncommunicated subjective motives or intentions of the parties. This approach has been applied with reference to issues as to the creation of contractual relations (Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at 105-106[25]), essential validity (Taylor v Johnson (1983) 151 CLR 422 at 429) and in matters of the nature of the legal relations created by the signing of a contractual document (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52). 243 Mr Jackman took the Court to passages in Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 where there are references to the concept of absence of consideration (see per Lord Goff at 166, Lord Browne-Wilkinson at 197-8, Lord Slynn at 201-2) in relation to the right of recovery of ultra vires imposts. It was also pointed out that the House of Lords there considered the state of mind of the payer, finding evidence that the payment was not voluntary because the payer feared adverse publicity and financial penalties if it did not submit to the Revenue's demand, even though it always contested the validity of that demand. 244 I do not think that Woolwich assists the resolution of the present appeal. The passages relied on represent the views of some of their Lordships as to the basis of the rather novel cause of action considered in Woolwich. They viewed the right to recover invalid taxes as closely analogous to the right to recover money paid on a consideration that failed. (Other Lords placed greater emphasis upon public law principles.) The context of the remarks about absence of consideration was the payment of money under an ultra vires demand for a tax or other impost (see at 197). In these situations, the ground of restitution is present at the time of payment, hence the award of interest from time of payment in Woolwich. The basis of the payer's entitlement from the outset stems from the demand for tax being ultra vires. In this sense, the cause of action was "like the case of money paid without consideration", to use Martin B's words in Steele v Williams (1853) 8 Ex 625 at 632, 155 ER 1502 at 1505 quoted by Lord Browne-Wilkinson (at 197) and Lord Slynn (at 202) in Woolwich. 245 Woolwich is not a contract case, and the "want of consideration" that generated the restitutionary claim blighted the payment at its inception. The discussion about the building society's state of mind was really part of the reasoning that established the payment to be by submission to a compulsive and unlawful demand (cf Steele v Williams, Mason v New South Wales (1959) 102 CLR 108). By contrast, the present case is one in which the failure of consideration descended on a contractual relationship at a time after payment of the money. Proof of compulsion is no part of the Roxborough cause of action. 246 The appellant submits that individual restitutionary claims based on Roxborough may be advanced and established with no more than the relevant documentary material. In the normal course this would include the wholesaler's price list, the retailer's order form, the wholesaler's invoice and evidence of payment of the licence fee during the weeks prior to the decision of the High Court in Ha on 5 August 1997. A payer's intention, "objective" or "subjective", may be established by examining the transactional documents in context. I do not understand the respondents to dispute these propositions. 247 But it does not follow, the respondents submit, that the basal fact to be proved is not the subjective intent of the individual payer. They posit unlikely but possible situations such as a retailer who was ignorant of the licensing scheme, or who thought that the invoice price related solely to the value of the tobacco products, or who intended that the wholesaler could keep the licence fee regardless of the validity of the legislation then under challenge in Ha (perhaps because the retailer intended to pass on the burden of the impost by including it in the marked-up price charged to the retailer's own customer). Proof of these "subjective" matters might only emerge through cross-examination of individual retailers, but the conceptual relevance of the point remained, according to the respondents. 248 I presently doubt the relevance of these matters in the light of the principles referred to in the preceding paragraphs. 249 In any event, they are no more than optimistically speculative anticipation of what would, at most, be defences open to meet the claims of individual retailers. In my view, these are unlikely hypotheticals. The possibility that these somewhat naïve retailers existed in the months before Ha is no more destructive of the Rule's capacity to apply to the proceedings than the persons who have been happy with their contract with Esanda of whom Gleeson CJ spoke in Carnie (supra). The possibility of extracting from an individual retailer (who may not be called as a witness) an admission as to subjective intent at the time of payment that is relevant to defeat the individual cause of action can only be conceded as a (remote) possibility. But this does not mean that the lead plaintiffs have failed to show the likelihood from the outset that common issues of law and fact are involved across the board. 250 When Roxborough was at first instance before Emmett J, individual retailers were cross-examined as to their subjective intentions at the time of payment. This however was relevant to the causes of action based on mistake that were then being pressed (see Roxborough v Rothmans of Pall Mall Australia Ltd (1999) 161 ALR 253 at 267-9[68]). 251 Einstein J also illustrated his proposition that the plaintiffs did not have the same interest in the proceedings by the following analogy (J100);

An allegation, in a claim against an accountant for damages for professional negligence, that the accountant owed a duty of care in providing accounting advice could not mean that all persons to whom he had provided negligent accounting advice would have the same interest in those proceedings. I do not disagree. But the example is a poor analogy, because an accountant's duty of care is well established and because the example offers no core of common factual or legal issues. 252 Another analogy invoked by Einstein J (at J116) and the respondents was the reference in the joint judgment in Wong (at 261[14]) to nineteenth century equity cases in which demurrers were allowed in respect of representative actions by shareholders who complained of misrepresentations in the prospectus upon which they had relied. The Court in Wong pointed out that this occurred because, whilst the prospectus may have been false, the case of each person deceived would be peculiar to himself and would depend upon its own circumstances. 253 There are at least two points of distinction between a group of cases based on misrepresentation in a prospectus and the present restitutionary causes of action. The first is that the former causes of action arose at the time each individual investor acted to his or her detriment in (subjective) reliance upon material misrepresentations. By contrast, in the present cases, the causes of action all arose when Ha destroyed the basis upon which, to say the least, the vast majority of retailers and wholesalers would have acted. The second distinction has already been discussed: the Roxborough cause of action does not depend upon the subjective intent of the retailer who paid the money sought to be recovered. 254 In any event, on my reading of Wong, the High Court was not saying that the nineteenth century cases represented the modern law as expounded in Carnie with reference to the Rule. The passage in Wong at [14] was dealing with the approach adopted by the Court of Chancery, a point emphasised by the opening citation from McHugh J's judgment in Carnie. McHugh J had been at pains to indicate that the English cases of the 1970s and 1980s cited by Toohey and Gaudron JJ in Carnie had "been more liberal in allowing representative actions to proceed" at 429. McHugh J added: In the Age of Consumerism, it is proper that this should be so. 255 It would therefore be wrong to read the passage in Wong at 261[14] as if it were determinative of the present issue, even assuming a close analogy between a case of prospectus misrepresentation and a Roxborough type situation.

(g) Common issues of fact 256 It will be apparent from the foregoing that the appellants have also shown the probability that common issues of fact material to liability will arise within each proceeding. There is a single defendant named in each proceeding. The evidence discloses that within the Relevant Period its invoicing practices were either identical in all its dealings or contained variations about which the appellants say with arguable justification there is no material distinction. At the very least, it is established at this stage that, within each separate proceeding, there are material common issues of fact (invoicing, warehousing, methods of calculating and passing on the licence fee by the wholesaler) that establish a sufficient community of interest to satisfy the Rule's jurisdictional requirement and indicate the appropriateness of the proceeding continuing as a unity pursuant to the Rule, at least for the time being. 257 After discovery has taken place (see below), there may turn out to be matters of real distinction as between some class members and others. If so, the court may give directions for the subsidiary issues to be tried separately.

(h) Should the Court "otherwise order" at this stage? 258 One traditional function of representative proceedings is the avoidance of multiplicity of actions (Carnie v Esanda Finance Corporation (1996) 38 NSWLR 465 at 470 (Young J)). In my view there would have been a costly procedural morass if thousands of separate actions had been commenced by the various retailers (contrast Einstein J at J143). The matters already addressed in these reasons demonstrate to my satisfaction that it is in the interests of justice to permit them to proceed along the lines of the opt-in basis proposed. Naturally, this will not preclude application for severance with respect to particular issues that may have to be tried touching the rights of individual retailers. Furthermore, the delay that has ensued consequent upon these proceedings in this Court and below may mean that particular matters will require attention as the litigation gets moving again. The orders proposed below remit the proceedings to the Equity Division for further directions on the basis that they may continue as representative proceedings. 259 My conclusions about the impact of the Limitation Act upon represented persons suggest that it may be appropriate to delete the words "and to being named as a plaintiff in the representative proceedings" for the proposed Opt-In Notice (cf J74-76).

4. Should the respondents be required to disclose the identities of additional retailers within the class? 260 The matter here in issue is whether the court (a) can and (b) should lend its processes to assist the plaintiffs identify additional members of their respective groups as a prelude to inviting those persons to opt-in. 261 The lead plaintiffs invoked Pt 23 r3 (Order for discovery) and Pt 24 r5 (Order to answer interrogatories) in aid of orders requiring the defendants to disclose their records of transactions affecting "represented retailers" as defined in the respective summonses (see Red 25-31). This information would be amenable to the processes of discovery and interrogatories in due course. However, the plaintiffs sought it at the present stage of the proceedings in aid of the prosecution of the proceedings as representative proceedings. Each plaintiff also sought directions that, within 28 days of compliance by the defendant, the plaintiff send to represented retailers then known to the plaintiff the "Opt-In Notice" and letter annexed to an affidavit of Mr Firmstone sworn 8 August 2003. (These documents are at Blue 79ff.) 262 The standard letter proposed to be sent by Firmstone to identified retailers (Blue 79ff) informs them that proceedings have already been commenced on their behalf, identifying the proceedings by number and defendant(s). The letter continues:

However, the proceedings are now at the stage where you and other represented tobacco retailers will have to elect whether you consent to the representative action being continued on your behalf. The terms on which we are prepared to act on your behalf in connection with the proceedings are in this letter. If you so elect, you will participate in any favourable outcome from this action, including any negotiated settlement.

If you wish to participate, you will need to sign the attached Opt-In Notice and give us your authorisation to act on your behalf….

Please complete the attached Opt-In Notice to confirm that you: (i) consent to the relevant representative proceedings in the NSW Supreme Court being continued on your behalf and being named as a plaintiff; (ii) authorise Firmstone and Feil to act on your behalf; and (iii) accept the fee arrangement contained in this letter. …. An Opt-In Notice, Authority and Agreement is attached. These documents set out in detail the terms under which Firmstone will fund and manage the litigation. 263 The letter does not preclude the retailer from making of a counter-offer, nor is Firmstone locked into dealing with each and every retailer on identical terms. (There may of course be obligations of fair and evenhanded dealing on the part of the lead plaintiffs: see generally Arakella.) Furthermore, as Mr Gageler conceded in argument (CA Tr p127), the court is free to exercise its authority under the Rule by requiring Firmstone to modify the terms under which it offers the opportunity to opt-in to individual retailers or retailers generally. 264 Einstein J declined to make the orders for discovery/interrogatories because he had concluded that the representative proceedings had the fundamental flaws discussed above. His Honour nevertheless indicated that there was no objection in principle to such relief, even for the purpose of ascertaining the members of the class (J152-3). He pointed out that discovery for the purpose of identifying parties is a remedy known to the law (see generally Hooper v Kirella Pty Ltd (1999) 96 FCR 1 at 9[24]-[26]). 265 The respondents contend that discovery/interrogatories are not available for this purpose, essentially because these processes would not be directed at facts in issue. Alternatively, they submit that the court should decline such assistance, essentially because it is really sought to maximise Firmstone's profits. 266 Except for the Metcash parties, the respondents have not suggested that the compilation of the information would be oppressive in the relevant sense. They have no privilege to withhold this information even though the yielding up of it is likely to reveal thousands of retailers who will be happy to sign up to Firmstone's terms and formally opt-in. 267 No authority was cited that directly addresses these issues. 268 Discovery is regulated by Pt 23 of the Rules. The scope of the traditional remedy is significantly narrowed, but the touchstone remains that of documents "relevant to a fact in issue" (r2). Rule 1(d) provides that a document or matter is taken to be relevant to a fact in issue if it could, or contains material which could, rationally affect the assessment of the probability of the existence of that fact (otherwise than by relating solely to the credibility of a witness), regardless of whether the document or matter would be admissible in evidence. The ultimate concern is the interest of a fair trial (Percy v General Motors-Holden's Pty Ltd [1975] 1 NSWLR 289 at 292). 269 According to Bailey and Evans, Discovery and Interrogatories in Australia (at [13,075]), a party suing or being sued in a representative capacity must discover all relevant documents in the possession, custody or power of the party and of those whom the party represents. The authors cite Few v Guppy (1836) 13 Beav 457-472; 51 ER 176 (trustees suing on behalf of the beneficiary); Kain v Farrer (1877) 37 LT 469 at 470 (defendant sued as representative of The Board of Trade); Buchanan-Michaelson v Rubinstein [1964] 3 All ER 850 (defendant sued as executor of estate); Sharpe v Smail (1975) 49 ALJR 130 at 132; and Milanese v Harburger [1980] VR 652 (Public Trustee suing on behalf of protected person)). These authorities support the proposition that discovery may be ordered against a lead plaintiff requiring production of documents in the possession, custody or power of the represented persons. Any other conclusion would permit representative proceedings to be an instrument of injustice. 270 The converse must hold true. If representative proceedings are properly commenced, then the defendant can be obliged to discover documents relevant to issues, a fortiori common issues, as between the plaintiff and represented persons on the one hand and the defendant on the other. It would follow that, at an appropriate stage in the proceedings, the lead plaintiffs would be entitled to discovery as to the details of all transactions falling within the scope of the representative proceedings, to the extent that those details touch on matters in dispute. 271 The fair trial of the issues in representative proceedings requires access to all information readily available touching all of the issues encompassed in the proceedings. 272 Defences have yet to be filed in the present cases, but that appears to be the defendants' choice. The defendants have nevertheless already flagged many of the matters in issue as between themselves and their retailer customers. Some of the issues are referred to earlier in these reasons. The defendants contend that each retailer's transaction is potentially unique. Access to the accounting records would also assist in computing the quantum of recovery on behalf of individual retailers, should the plaintiffs prove successful in the proceedings. These considerations indicate that the defendants would be bound to disclose at least the information presently sought by the lead plaintiffs if the proceedings continue as representative proceedings. The information is relevant to the facts in issue (cf Pt 23 r1(d). 273 If the discovery dispute is viewed in this way, its problem is at most one of prematurity. Yet there is no hard and fast rule about the time of discovery (see Schlam v WA Trustee Executor & Agency Co Ltd [1964] WAR 178). The interests of justice favour early limited discovery of these matters, because it assists the court in "closing the class" as a step in case-management and it is the fairest and most effective way of giving notice to all represented persons. These matters are explained more fully below. The respondents are best equipped to aid the court in this process (cf Carney at 422). 274 The respondents' contention that the facts in issue are to be confined to matters touching only those who opt-in is circular and misconceives the proper function of the opting-in procedure (see below). This objection to discovery is a variant of Mr Hutley SC's argument previously addressed. 275 An alternative that avoids grappling with the "relevant to facts in issue" question would be for a subpoena to issue to the defendants requiring production of their records in aid of the court's exercise of interlocutory jurisdiction under the Rule. I see no reason why this could not occur. This would arm the court with information as to how best to locate and identify the entire class of opting-in retailers before effectively closing the class. It is difficult to see why the presently contentious matter has not been addressed in this manner. 276 I need to explain my reference to "closing the class". 277 My conclusion that these representative proceedings were duly instituted on behalf of the represented persons identified in each Summons has the corollary that, unless the court otherwise orders pursuant to Pt 8 r13(1), issues decided in the representative proceedings will bind the lead plaintiffs, all represented persons and of course, the defendants. 278 Many procedural issues can arise in representative proceedings. Unlike Part IVA of the Federal Court of Australia Act 1976, the Rule addresses few of them in terms. (This may be something worthy of the attention of the Supreme Court Rules Committee.) 279 The judicial management of representative proceedings and the power to ensure that they are conducted fairly and in pursuit of the goals of the Overriding Purpose Rule (Pt 1 r3) are located in the power to "otherwise order" (Pt 8 r13(1)). This is the fulcrum by which the Court exercises the discretion to ensure that proceedings only continue as representative proceedings if and to the extent that it is in the interests of justice for this to occur. 280 It has been suggested that:

One of the most controversial issues in the design of a class action procedure is whether to implement an 'opt out' model or an 'opt in' model. Pursuant to an opt out model a class suit can be commenced without the express consent of the 'absent' class members. However, an opportunity is offered to the class members to exclude themselves from the class action; that is, to opt out. Under an opt in model only those who take positive action, by giving their express consent to the commencement of the class suit, will be covered by the judgment on the common questions.

(Vince Morabito, "Class Actions: the Right to Opt Out under Part IVA of the Federal court of Australia Act 1976 (Cth)" (1993-94) 19 MULR 615 at pp615-6, footnotes omitted) 281 References to opting-in and opting-out should not mislead the reader into thinking that those who opt-in only become formally involved in the proceedings from the time when they opt-in. In truth, those represented are represented from the outset so long as the Rule's "jurisdictional" requirement is met. The court and the lead plaintiff are obliged to have regard to the interests of all represented persons from the outset and for as long as they continue within the class as described by the lead plaintiff in the originating process. The "opt-in" and "opt-out" procedures supervised and sanctioned by the court recognise the represented persons' interest in the proceedings, stemming as it does from the potential impact of the doctrine of res judicata. 282 Representative proceedings are usually commenced without notice to or the prior consent of the represented persons. Indeed, defendants may have an interest in keeping things that way, because matters decided on the merits will bind the whole class, leaving dissatisfied individuals to move the court to be relieved against enforcement of judgment pursuant to subrules (4)-(6) of the Rule. Although the present respondents do not appear anxious to embrace the benefits of res judicata as against all retailers, I do not interpret this as any concession about the weakness of their cause. One entirely understands such an attitude in a context where the Limitation Act has removed the threat of fresh proceedings. Perhaps this is another reason why the "monopoly" label is ultimately tendentious. 283 In Shepherd, Bryson J indicated (at 99-101) that the court leans in favour of the opt-in procedure. He said (at 101):

I would think there would be few occasions when what was referred to as an "opt out" notice would be appropriate. Either the circumstances show that a person's actual decision is impossible to obtain or it is so obvious what it would be that it need not be obtained, or that a person's actual decision should be obtained. 284 The lead plaintiffs and the funder involved in the current proceedings have recognised that opting-in is appropriate in the present matter. I agree, particularly since the relief ultimately sought on behalf of the retailers is monetary. 285 The respondents seek to go further. They submit that the opt-in procedure is driven by Firmstone's desire to ensure that only those retailers who accept Firmstone's terms should have the right to participate in the anticipated fruits of victory. Interestingly enough, the respondents do not propose opting-out as the antidote. My general remarks about the utility of these funded proceedings in assisting access to justice explain why I reject this submission about the improper goal of the proceedings or the discovery motions. 286 The obvious intent behind opt-in procedures is that a time will be reached when it will be too late for further persons to opt-in. At that stage, the court will order that the class of represented persons will be limited henceforth to those who have already opted-in. This will be an exercise of the power to "otherwise order", thereby ensuring that the proceedings continue thereafter only by those who have already been identified individually by having opted in. Naturally this decision could be revisited if circumstances required it. 287 In the United States, constitutional due process requirements have led to the formulation of Rule 23(c)(2) of the Federal Rules of Civil Procedures, which provides that if a court permits a class action to be maintained under the relevant subdivision it must direct to the members of the class "the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort". From this premise, there is a body of caselaw about what is effective notice (see generally Wright and Miller, Federal Practice and Procedure s178). According to that treatise (ibid):

… if there is an existing document or readily accessible source that names [class members], then the identity of class members can be ascertained with a reasonable effort and plaintiff may be required to send a notice to each person.

Other situations may not be solved as easily, however. Thus, in one action involving a potential class of 3,750,000 members, the court ruled that an evidentiary hearing was necessary to determine what constitutes a reasonable effort to identify the individual class members. A more typical procedure is for the court to require the representative plaintiffs to submit a proposed list of persons to whom notice should be sent and then allow defendant to object or submit a counterproposal. If the members of the class can be identified more readily by defendant, then he may be obliged to compile the list, (fn 30) although the costs of that compilation may be borne by the plaintiffs. Footnote 30 cites Battle v Municipal Housing Authority for the City of Yonkers DC NY, 1971, 53 FRD 423 and Contract Buyers League v F & F Investment DC Ill 1969 48 FRD 7. 288 This United States practice and the reasons behind it support my conclusion that discovery and/or interrogatories should be ordered along the lines as sought. The details can be addressed by the Equity Division. 289 The Metcash respondents have filed affidavits suggesting likely difficulties in fully complying with the motions for discovery and interrogatories (Blue 16-30, Orange 100). These matters were not explored in detail at the hearing and Einstein J did not have to address them (see J154). I am unpersuaded that the exercise is so oppressive that discovery should be refused outright with respect to such obviously pertinent information some of which is undoubtedly reasonably accessible. These respondents are free to propose alternative methods that would meet the demands of justice if, as assumed, they continue to support the opt-in alternative. Individual defendants will also have the right to apply under Pt 23 r4 and Pt 24 r3 for particular relief from the orders proposed to be made. 290 The Metcash Respondents also submit that the discovery orders as sought would be futile because of the way the application is drawn. It seeks discovery of the names and addresses of "represented retailers", this expression being defined as those persons who "paid to the defendant the amount of licence fee referable to sales as separately identifiable and serviceable parts of the consideration payable in respect of each sale". These respondents maintain that none of their customers fall into this category because their published price lists and most of their invoices made no reference to licence fees. In my view, this is a matter to be explored in the litigation. I would not refuse discovery in limine on the present information.

Orders 291 Leave to appeal was granted during the hearing. 292 I propose the following orders in each matter:

Set aside orders 1-6 of the orders made by Einstein J on 7 November 2003 so far as concerns the proceedings that are the subject of this appeal.

In lieu thereof, order that: (i) the proceedings continue as representative proceedings; (ii) remit proceedings to the Equity Division for further directions in accordance with the reasons of the Court of Appeal.

Respondents to pay appellants' costs of the motions addressed by Einstein J in the judgments under appeal and the appellants' costs in the Court of Appeal.

Respondents to have a certificate under the Suitors' Fund Act 1951, if qualified. 293 SHELLER JA: I have had the privilege of reading in draft the President's judgment with which I entirely agree. 294 HODGSON JA: I agree with the orders proposed by Mason P, and subject to what I say below, with his reasons. 295 The class represented by the plaintiffs in each proceeding is identified as: 2 The plaintiffs who are the persons listed in Schedule 1 to this Summons bring these proceedings on behalf of themselves and all other persons (the "represented retailers") who: (a) during the whole or some part of the Relevant Period: (i) were retailers of tobacco products carrying on business in one or more of New South Wales, Queensland, Victoria, South Australia, Western Australia, Australian Capital Territory and Tasmania; (ii) purchased tobacco products sold to them by the defendant; (iii) paid to the defendant the amount of the licence fee referable to the sales in (ii) as separately identifiable and severable parts of the consideration payable in respect of each sale; (b) have not recovered from the defendant an amount or amounts referable to the licence fees paid to the defendant as referred to in (a)(iii) or otherwise released or agreed the release the defendant from any liability or alleged liability to make payments to them of the amount in (a)(iii).

296 Under the intended opt-in procedure, what is proposed is that ultimately an order will be made under Pt 8 rule 13(1) that the proceedings be continued by the plaintiffs representing those of the identified class who have opted in (that is, in terms of the Rule, representing all the class excepting those who have not opted in). However, the presently proposed notification of the opportunity to opt-in makes it a condition of opting in that one third of any claim be given up to Firmstone, and that authority to settle the claim also be given to Firmstone. 297 In my opinion, this does not, as submitted by Mr Hutley SC, mean that these are not proceedings commenced by the plaintiff as representing persons identified as "numerous persons with the same interests", so as to permit the commencement of proceedings in accordance with Pt 8 rule 13; or that these proceedings are abuses of process. If the Court were to consider that the opt-in procedure sought to be used would be contrary to the claim to represent the whole class of numerous persons with the same interest, or otherwise oppressive or extortionate, the Court could require changes to the opt-in procedure. 298 The orders proposed by Mason P leave the details of the opt-in procedure to the Equity Division. In my opinion, it would be open to the judge dealing with the matter to consider whether the opt-in notification should give the persons notified the alternative of opting in without giving up one third of their claim, but instead (for example) having to conduct for themselves whatever process is necessary to obtain a specific order in their favour, after matters common to all represented persons have been determined (and presumably, being at some risk as to costs in that process). The precise terms of any authority to settle could also be the subject of consideration. 299 Since the proceedings as presently constituted are on behalf of the whole of the identified class of persons, the identification of persons in the class is at present an issue in the case so as to be a proper subject of discovery, subject to discretionary considerations; and in my opinion this will remain the case until an order is made, pursuant to the opt-in procedure, limiting the persons represented to those who have opted in.

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