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[2003] NSWSC 1225
procedural. Each of the first and second defendants’, third and fourth defendants’ and fifth and sixth defendants’ motions for security for costs was dismissed. The defendants were ordered to pay the...
3 cited instruments linked from this judgment.
The defendants wanted Ms Cauvin to provide money as security for their legal costs, despite her being unable to afford it. Bell J accepted that the case was unusually broad, potentially expensive and difficult to assess. But the motions were considered on the basis that the case was arguable, properly brought, not abusive and not vexatious. Ms Cauvin had a genuine personal claim, and there was no evidence that she had hidden assets or that a particular funder stood behind the case. The Court therefore refused to order security. It did not decide whether she could pursue claims for other people or whether any of the alleged tobacco-industry conduct was proved.
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In Myriam Cauvin v Philip Morris Limited [2003] NSWSC 1225, Bell J determined three groups of defendants’ motions seeking security for costs. The applications had been filed on 7 August 2002. The defendants also sought an order that the proceeding be dismissed if the plaintiff did not provide security ([1]).
The plaintiff, Myriam Cauvin, acknowledged that she was impecunious and resident within New South Wales ([3]). The defendants did not rely on the specified grounds in Part 53 rule 2 of the Supreme Court Rules 1970. Instead, they asked the Court to use its inherent power to regulate its own proceedings ([10]–[11]).
The pleaded claim was extensive. Ms Cauvin alleged that the tobacco-company defendants had engaged in misleading or deceptive conduct, or unconscionable conduct, concerning cigarette promotion, the risks of smoking and nicotine addiction ([12]–[14]). The pleading referred to conduct over a lengthy period, including advertising, statements about health risks, representations to governments, and alleged concealment of knowledge ([13]–[15], [24]).
The relief sought went beyond compensation for Ms Cauvin’s own alleged injuries. She pleaded that she had emphysema requiring lung replacement surgery, and also sought relief for “other persons” said to have been influenced by the defendants’ conduct or to have suffered, or potentially to suffer, smoking-related harm ([16]–[23]). The Court noted that the identity of those other persons had not been particularised and that the plaintiff contemplated sample or epidemiological evidence ([25]).
A separate challenge to the plaintiff’s ability to bring claims for those other persons had not yet been determined. Bell J therefore approached the security motions on the basis that the plaintiff’s claim was arguable ([26], [36]). The motions were dismissed, and the defendants were ordered to pay the plaintiff’s costs of the motions.
The central question was whether the Court should use its inherent jurisdiction to require security from an impecunious natural person who lived within the jurisdiction, in a case of exceptional breadth ([30], [55]–[56]). The Court accepted that the litigation was likely to be lengthy and expensive, and that the defendants would incur substantial costs in defending it ([31], [33]).
The parties accepted that the prospects of the plaintiff’s case were relevant to the security question. Bell J nevertheless found it difficult to assess those prospects in litigation of this scale. He observed that the case had novel features and that the plaintiff might be underestimating the difficulty of proving it. He also noted that a document relied on as part of the alleged conspiracy did not, by itself, establish the alleged facts ([32]–[35]). That was not a final merits ruling. The Court expressly proceeded on the footing that the claim was arguable ([36]).
The judgment considered the discretionary factors discussed in Morris v Hanley, including whether a claim is bona fide, prospects, whether security would bring the proceeding to an end, the plaintiff’s assets and how their absence arose, whether someone stands behind the plaintiff, and delay. The list was described as non-exhaustive, with the basic concern being whether the proceeding would be vexatious if allowed to continue without security ([49]).
On the facts before him, Bell J found that Ms Cauvin’s claim was bona fide and not a sham ([50]). Her impecuniosity was not said to have resulted from divesting herself of assets to avoid the consequences of litigation. The Court also observed that there was nothing to suggest she could have funded litigation of this scale even without her medical condition ([51]). Nor was there evidence of an identified person or group standing behind her who might benefit from the case but refuse to contribute to its costs ([52]).
The defendants argued that the traditional approach to an impecunious individual should not apply where the plaintiff sought to enforce rights benefiting potentially millions of people. They relied on the reasoning in Melville v Craig Nowlan & Associates Pty Ltd about litigation under legislation allowing broad standing ([37]–[43]). Bell J recognised that the reasoning in Melville discussed claims under the Trade Practices Act, but noted that the case concerned a statutory security power under the Land and Environment Court Act, rather than the inherent jurisdiction engaged here ([46]–[48]).
The plaintiff had a personal claim against each defendant, as well as the disputed claims concerning others ([54]). The Court did not decide whether the “other persons” claim was legally available. Bell J considered that allowing the case to continue without security could be characterised as vexatious if the claim depended on an impermissible claim for relief for an unparticularised group. But that issue had not been determined and was not resolved on the security motions ([55]).
Ultimately, the defendants had not persuaded the Court to use its inherent power against a resident natural person whose proceeding was, for present purposes, treated as regularly commenced, arguable, non-vexatious and not an abuse of process ([9], [56]).
This was an interlocutory decision about the exercise of the Supreme Court’s inherent jurisdiction. It did not create a statutory security-for-costs regime or amend the rules governing security. Bell J expressly noted that the motions did not fall within the specified grounds in Part 53 rule 2, and that the defendants instead relied on inherent power ([10]–[11]).
The judgment considered the traditional principle that poverty does not, by itself, bar a person from bringing proceedings. It discussed Melville, where the Court of Appeal considered the operation of a statutory power to order security in the Land and Environment Court. Bell J noted that Melville addressed whether statutory language displaced the “general rule” in that statutory setting ([46]–[48]). He did not hold that the rule was absolute in every case, nor did he formulate a new general test. The judgment instead applied the relevant discretionary considerations to the particular motion.
The decision also did not settle how the principles apply whenever a person brings a claim with broad public or group implications. The defendants argued that potential beneficiaries could bring similar proceedings and that security would not necessarily prevent the merits from being determined ([40]–[43]). Bell J did not adopt that submission as a rule. He decided only that the defendants had not established a sufficient basis for security on the assumptions and evidence before him ([56]).
The judgment therefore left open the plaintiff’s standing to seek relief for the unparticularised “other persons”, and did not decide the substantive Trade Practices Act or Fair Trading Act allegations ([26], [55]). On the text of this judgment alone, the “after” position is limited: the security motions were refused, while the underlying standing, merits and eventual case-management questions remained unresolved.
At [9], the defendants invited the Court to assume that the proceeding was “regularly commenced”, “not vexatious”, “not an abuse of the process of the Court” and “not doomed to failure”. In plain English, the parties asked Bell J to decide security without treating the case as improperly brought or hopeless.
At [36], Bell J stated: “I approach this application upon the footing that the plaintiff’s claim is arguable.” This means that the security decision did not require him to find that the plaintiff was likely to win. It required him to proceed on the agreed, more limited basis that the case could be argued.
At [50], Bell J said: “The plaintiff’s claim is a bona fide one and not a sham.” This was a finding relevant to whether security should be ordered. It was not a conclusion that the allegations against the defendants were true.
At [55], Bell J identified a possible connection between the unresolved standing issue and the security application. He said that a view that the proceeding was vexatious might depend on whether the plaintiff could claim under the Trade Practices Act for unparticularised “other persons”. He immediately qualified that observation by noting that the challenge had not been determined. The passage flags an issue; it does not decide it.
At [56], Bell J concluded that the defendants had not established that the Court’s inherent jurisdiction should be invoked “in a case that is regularly commenced, arguable, not vexatious and brought by a natural impecunious litigant resident within the jurisdiction.” In everyday terms, the defendants had not shown enough to justify making this plaintiff provide security on the basis on which the motions were argued.
The decision is most directly relevant to an application seeking security for costs from an individual plaintiff who is both impecunious and resident within the jurisdiction, where the defendant relies on the Court’s inherent jurisdiction rather than a specific statutory or rules-based ground. Those features were expressly present in this case ([3], [10]–[11], [56]).
It is also relevant where the plaintiff’s claim is unusually broad or expensive, but remains bona fide and is treated as arguable for the purposes of the security application. The defendants emphasised the scope of the alleged conduct, the likely discovery and the anticipated legal costs ([24], [30]–[33]). The Court did not treat breadth and expense alone as determinative.
The case also concerns a proceeding combining an individual’s personal claim with claims for unparticularised others. The judgment recognises that the breadth of such a case may raise issues about standing, the nature of the litigation and whether security would prevent determination of the controversy. But it does not establish that a plaintiff may bring such group claims, nor that those claims necessarily justify or defeat security ([25]–[26], [39]–[43], [55]).
The decision should be read with its procedural limits in mind. Bell J relied on assumptions that the proceeding was regularly commenced, arguable, not vexatious, not abusive and not doomed to failure ([9]). A case in which those assumptions are absent, or in which there is evidence of asset-divestment, a person standing behind the plaintiff, or other circumstances affecting the discretionary balance, is not resolved by this judgment.
The supplied judgment is dated 19 December 2003 and contains no account of later judicial treatment of its decision. It therefore does not establish whether later courts followed, distinguished or qualified Cauvin. No later authorities can be identified from the judgment text itself.
The judgment does discuss earlier authorities. It considers Melville v Craig Nowlan & Associates Pty Ltd, including the Court of Appeal’s treatment of statutory security powers and broad-standing litigation ([35], [37]–[48]). It also refers to Bray v F Hoffmann-La Roche Ltd on the importance of evidence about the likely effect of a security order in representative proceedings ([43]). Bell J distinguished the statutory context in Melville from the inherent jurisdiction relied on in Cauvin ([46]–[48]). Those discussions explain the authorities available to him; they are not evidence of how later courts treated Cauvin.
The most immediate open question was whether Ms Cauvin could pursue the claims for “other persons”. Bell J recorded that a challenge to her ability to bring a claim for compensation on behalf of an unparticularised group had been stood over and was not determined on the security motions ([26]). The security ruling therefore should not be read as resolving the legal basis, scope or procedural form of that claim.
The substantive allegations also remained unresolved. Bell J did not decide whether the defendants had engaged in misleading or deceptive conduct, unconscionable conduct or conspiracy, nor whether any such conduct caused Ms Cauvin’s illness or loss ([12]–[23], [36]). His observations about the evidentiary difficulty of the case were part of the security analysis, not findings on liability ([34]–[36]).
The judgment also left open how the case would be managed, including the scope of discovery, the use of epidemiological or sample evidence, and whether the plaintiff’s proposed amended pleading would be permitted. Bell J noted that the application for leave to deliver the second amended statement of claim was yet to be heard ([2], [31], [33]). Those matters could affect the nature and cost of the proceeding, but were not determined here.
Finally, the judgment does not provide a comprehensive rule for security applications involving public-interest or group-benefit claims. It records competing arguments about whether other people or authorities could bring similar proceedings and whether security would stifle the controversy ([39]–[43]). Bell J’s decision is confined to the defendants’ failure to establish a basis for security on the facts and assumptions before him ([56]).
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CITATION : Myriam CAUVIN v PHILIP MORRIS LIMITED (ACN 004 694 428) and PHILIP MORRIS (AUSTRALIA) LIMITED (ACN 004 316 901) & Ors [2003] NSWSC 1225 HEARING DATE(S) : 7/11/03 JUDGMENT DATE : 19 December 2003
JUDGMENT OF : Bell J at 1 DECISION : Dismiss each of the first and second defendants', third and fourth defendants' and fifth and sixth defendants' motions claiming security for costs; The defendants are to pay the plaintiff's costs of the motion
Environmental Planning and Assessment Act 1979 Federal Court Act 1976 (Cth) LEGISLATION CITED : Land and Environment Court Act 1979 Legal Profession Act 1987 Supreme Court Rules 1970 Bray v F Hoffmann-La Roche Ltd (2003) 200 ALR 607 Bryan E Fencott and Associates v Eretta Pty Ltd (1987) 16 FCR 497 Cowell v Taylor (1885) 31 Ch D 34 Haller v Worman (1861) 3 LT 741 CASES CITED : Melville v Craig Nowlan & Associates Pty Ltd [2002] NSWCA 32; 54 NSWLR 82 Neale v Lady Gordon Lennox [1902] 1 KB 838 Rajski v Computer Manufacturer & Design Pty Ltd [1983] 2 NSWLR 122 Sykes v Sykes (1989) LR 4 CP 645 at 647 Truth About Motorways Pty Limited v Macquarie Infrastructure Investment Management Limited [2000] HCA 11; 200 CLR 591 Yonge v Toynbee [1910] 1 KB 215 Plaintiff - MYRIAM CAUVIN 1st Defendant - PHILIP MORRIS LIMITED (ACN 004694428) 2nd Defendant - PHILIP MORRIS (AUSTRALIA) LIMITED (ACN 004 316 901) PARTIES : 3rd Defendant - BRITISH AMERICAN TOBACCO AUSTRALIA SERVICES LIMITED - (FORMERLY KNOWN AS WD & HO WILLS (AUST) LTD) 4th Defendant - WD & HO WILLS HOLDINGS LIMITED (ACN 003 763 291 5th Defendant - BRITISH AMERICAN TOBACCO AUSTRALASIA LIMITED (FORMERLY KNOWN, AS ROTHMANS HOLDINGS LTD) 6th Defendant - BRITISH AMERICAN TOBACCO AUSTRALIA LTD (FORMERLY KNOWN AS ROTHMANS OF PALL MALL (AUST) LTD) FILE NUMBER(S) : SC 11301/02 Plaintiff: N. Francey 1st & 2nd Def: Sackar QC/ S. O'Meara COUNSEL : 3rd & 4th Def: D. Beach SC / M. Wheelahan 5th & 6th Def: I. Jackman / S. Goodman
Plaintiff: Maurice May & Co 1st & 2nd Def: Allens Arthur Robinson SOLICITORS : 3rd & 4th Def: Corrs Chambers Westgarth 5th & 6th Def: Baker & McKenzie
IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION
11301/02 Myriam CAUVIN v PHILIP MORRIS LIMITED (ACN 004 694 428) and PHILIP MORRIS (AUSTRALIA) LIMITED (ACN 004 316 901) & Ors
JUDGMENT - Motions for security for costs 1 BELL J: The first and second defendants (the Philip Morris defendants), the third and fourth defendants (the Wills defendants) and the fifth and sixth defendants (the Rothmans defendants) moved on motions filed on 7 August 2002 claiming orders for security for costs and, in the event that the plaintiff fails to provide such security, that the proceeding stand dismissed. I will refer to the respondent to each of the motions as the plaintiff and to the applicants as the Philip Morris defendants, the Wills defendants, and the Rothmans defendants respectively.
2 On 1 August 2003 I struck out parts of the plaintiff's amended statement of claim (the ASC). By notice of motion filed on 3 September 2003 the plaintiff applies for leave to deliver a second amended statement of claim (the 2ASC) in the form of the draft that is exhibited to the affidavit of Rebecca Dimaridis that was sworn on 3 September 2003. 3 The Philip Morris defendants read the affidavit of Peter Mitchell Hobday sworn on 6 August 2002 and the affidavit of Peter O'Donahoo sworn on 2 October 2003. Mr Hobday is a partner in the firm having the carriage of the matter on behalf of the Philip Morris defendants. He sets out the results of inquiries concerning the plaintiff's financial position. It is unnecessary to refer to it. The plaintiff acknowledges that she is impecunious. She is resident within the jurisdiction.
4 Exhibited to Mr Hobday's affidavit is a copy of a letter received by him from the plaintiff's solicitors, Maurice May & Co in response to a request for information with respect to the proposed application. The writer states that Maurice May & Co has a costs agreement with the plaintiff that conforms to the requirements of the Legal Profession Act 1987 and that counsel has been retained on a basis conformable with the requirements of that Act. The letter concludes: "No funds have been provided to this firm and/or the plaintiff from any source other than the plaintiff. To date the plaintiff has not been required, and does not have the resources, to even defray disbursements. In the circumstances we anticipate that services will be employed, including services of expert witnesses, without funding from the plaintiff. This may or may not necessitate requesting that those services be provided on some deferred payment basis. It also may be necessary to obtain funds from third parties for the purpose of conducting the litigation but no such arrangement currently exists." 5 Mr Hobday set out details of the costs incurred by the Philip Morris defendants as at 6 August 2002 and his estimate as to the likely amount of the those costs that would be allowed on assessment. In his affidavit Mr O'Donohoo sets out details of the costs incurred by the Philip Morris defendants in defence of the proceedings in the period 6 August 2002 to 3 October 2003 together with his estimate as to the amount that would be allowed on assessment. It is not necessary to refer to this evidence. It was not submitted that the sums sought by any of the defendants by way of security were not supported by the evidence.
6 The Wills defendants relied on two affidavits sworn by Brian James Whittaker on 19 August 2002 and 3 October 2002 and two affidavits sworn by Roland Patrick Matters on 19 August 2003 and 3 October 2003. 7 The Rothmans defendants relied on the affidavits of Andrew John Christopher sworn on 13 August 2002 and 3 October 2003. Mr Christopher annexed correspondence with Maurice May & Co to the latter affidavit demonstrating that continued professional costs were incurred on behalf of the Rothmans defendants after judgment was reserved on the earlier, pleading, motion.
8 Mr Francey, who appeared on behalf of the plaintiff, read a number of affidavits sworn by her, together with the affidavits of his instructing solicitor Maurice May, and Ms Dimaridis, a solicitor in Mr May's employ and two affidavits sworn by Simon Chapman on 10 May 2002 (referred to as SC1 and SC2 respectively).
9 Mr Sackar QC, who appeared with Mr O'Meara on the Philip Morris defendants' behalf, in a submission that was adopted by the Wills defendants and the Rothmans defendants, invited me for the purpose of determining the application for security orders, to proceed upon the following assumptions:
· The proceeding has been regularly commenced, · the proceeding is not vexatious, · the proceeding is not an abuse of the process of the Court, · the proceeding is not doomed to failure. 10 Part 53 r 2 of the Supreme Court Rules 1970 (the SCR) provides: "2(1) Where, in any proceedings, it appears to the Court on the application of a defendant - (a) that a plaintiff is ordinarily resident outside the State; (b) that a plaintiff is suing, not for his own benefit, but for the benefit of some other person and there is reason to believe that the plaintiff will be unable to pay the costs of the defendant if ordered to do so; (c) subject to subrule (2), that the address of a plaintiff is not stated or is mis-stated in his originating process; (d) that a plaintiff has changed his address after the commencement of the proceedings with a view to avoiding the consequences of the proceedings; or (e) that there is reason to believe that a plaintiff being a body corporate will be unable to pay the costs of the defendant if ordered to do so, the Court may order that plaintiff to give such security as the Court thinks fit for the costs of the defendant of an incidental to the proceedings and that the proceedings stayed until the security is given. (2) The Court shall not order a plaintiff to give security by reason only of subrule (1)(c) if it appears to the Court that the failure to state his address or the misstatement of his address was made without intention to deceive. 11 It is not submitted that the defendants' applications for security orders come within the provisions of the SCR. I am invited to make the orders sought in the exercise of the Court's inherent power to regulate its own proceedings: Rajski v Computer Manufacturer & Design Pty Ltd [1983] 2 NSWLR 122. In order to understand the basis of the defendants' applications it is necessary to describe the nature of the claim that the plaintiff brings in some detail. 12 By the ASC the plaintiff pleads causes of action under Pts IVA and V of the Trade Practices Act 1974 (the TPA) and the equivalent provisions of the Fair Trading Acts of each State and Territory (the FTA). She alleges that the defendants conspired to engage in misleading or deceptive conduct, or in conduct that was likely to mislead or deceive, contrary to s 52 of the TPA (and the FTA equivalent provisions). In the alternative she contends that the defendants' conduct was unconscionable contrary to the provisions of s 51AA or 51AB of the TPA (and the equivalent provisions of the FTA). Her claim in unconscionability is dependent upon the same facts and circumstances as are pleaded in support of the claim brought under s 52 of the TPA.
13 Generally, the plaintiff pleads a case that the defendants agreed to engage in conduct to promote the benefits and pleasures of smoking and to deny or minimise the risks associated with smoking, including the likelihood of contracting smoking-related disease, and the risk of becoming addicted to nicotine. The conduct that the plaintiff pleads the defendants engaged in comprised the following elements: (1) Advertising, marketing and promoting cigarettes as enhancing the life and enjoyment of consumers, (2) promoting certain brands of cigarettes, described as menthol, mild, light or low tar (the 'less hazardous' cigarettes) representing them to be healthier than other cigarettes or safer to smoke than other cigarettes, (3) making public statements of various including denying the existence of reliable evidence concerning smoking and risks to health and of the effect of nicotine, (4) lobbying, including by making representations to the Federal and State Governments to desist from taking actions likely to be effective in reducing smoking related disease, (5) intentionally concealing knowledge of the association between smoking and nicotine addiction and smoking and disease, and (6) conduct relating to the uptake of smoking. 14 It is the plaintiff's case that conduct falling within these categories was misleading or deceptive, or likely to mislead or deceive, in that: (i) Smoking cigarettes does not enhance life and the enjoyment of life of consumers of cigarettes but rather it detracts from life and the enjoyment of it, (ii) cigarettes marketed as 'less hazardous' cigarettes are not healthy or healthier than other cigarettes nor safe to smoke or safer to smoke than other cigarettes, (iii) reliable evidence existed making a causal link between cigarette smoking and increased risk to health and between nicotine and addiction, (iv) the defendants did not have reasonable grounds for making the recommendations or representations to governments in connection with tobacco control measures, (v) the defendants were under an obligation to disclose their knowledge of the association between cigarette smoking and addiction to nicotine and cigarette smoking and the risk of contracting smoking related disease, (vi) the defendants should not have taken steps to maximum the occasions on which, and the likelihood that, persons would be induced to commence or continue or fail to quit cigarette smoking. 15 In the ASC the plaintiff pleaded her case by reference to a period commencing in January 1960. By the 2ASC she proposes to confine her claim to the period from 1 October 1974. The latter being the date on which the TPA commenced. 16 The claim that the plaintiff makes is one of considerable breadth. She pleads that she and "other persons" have smoked, or may smoke, cigarettes and as a consequence be exposed to the likelihood of contracting smoking-related disease (paragraph 2.13 of the ASC and the 2ASC). As a consequence of smoking the cigarettes she and "other persons" are said to have inhaled and/or ingested nicotine or that they may inhale and/or ingest nicotine (paragraph 2.14 of the ASC and of the 2ASC). As a further consequence of the inhalation or ingestion of nicotine the plaintiff pleads that she and "other persons" have been, or may be, subjected to the effect of nicotine (paragraph 2.15 ASC and paragraph 2.15 2ASC). 17 The plaintiff claims that she and "other persons" were influenced by the defendants' conduct directly in that they saw and/or heard and/or were aware of the defendants' conduct and/or indirectly in that they were influenced by others who saw and/or heard and/or were aware of the defendants' conduct and/or were influenced by others who were so influenced (paragraph 2.17 of the ASC and of the 2ASC). The plaintiff contends that the defendants' conduct had the effect of causing and/or contributing to her and "other persons" commencing to smoke, continuing to smoke, recommencing to smoke and/or not ceasing or quitting to smoke (paragraph 2.21 of the ASC and of the 2ASC). In addition, the plaintiff pleads that by reason of the influence of the defendants' conduct members of the general public, including herself and "other persons", had an inaccurate or distorted belief, impression or understanding of the relationship between smoking and disease, the likelihood of contracting smoking related disease, the relationship between smoking and addiction, and the effect of nicotine (paragraph 2.22 of the ASC and of the 2ASC). 18 As a result of the defendants' conduct the plaintiff pleads that a greater number of persons, including herself and "other persons", commenced smoking cigarettes and/or continued to smoke cigarettes and/or failed to quit smoking cigarettes than otherwise would be the case (paragraph 2.23(g) of the ASC and paragraph 2.23(d) of the 2ASC). She claims that she and "other persons" have suffered or are likely to suffer loss and damage by reason of the defendants' conduct (paragraph 2.24 of the ASC and of the 2ASC).
19 The particulars of loss or damage pleaded include that the plaintiff contracted emphysema necessitating lung replacement surgery, with consequent pain and suffering, and financial and/or economic loss (paragraph 2.24(b) of the ASC and of the 2ASC).
20 In addition to the particulars of her own loss and damage the plaintiff particularises the claim in this way: "The plaintiff and other persons have contracted and/or are likely to contract smoking related disease, with all the attendant consequences thereof, including but not limited to: pain and suffering, medical and hospital expenses, loss of income, and loss of enjoyment and amenity of life" (paragraph 2.24(a) of the ASC and of the 2ASC). 21 The relief claimed includes declarations that the defendants have engaged in conduct that was misleading or deceptive and/or unconscionable and that the plaintiff and/or "other persons" have suffered, or are likely to suffer, loss or damage by that conduct (paragraph 3.9(d) of the ASC and paragraph 3.2(d) of the 2ASC).
22 The plaintiff claims injunctive relief pursuant to s 80 of the TPA (and the equivalent provisions of the FTA). The orders that she claims include orders that each of the defendants disclose to the plaintiff and "other persons", and such public health or regulatory authorities as the Court may select, certain documents as described. Orders are also sought that each of the defendants issue corrective statements concerning the health risks of cigarette smoking and the addictive properties of nicotine and that they fund public education programs and programs to assist people to stop smoking.
23 The plaintiff also claims relief pursuant to s 87(1) of the TPA (and the equivalent provision of the FTA) to compensate her and "other persons" in whole or in part for any loss or damage that has been suffered by them and to prevent or reduce any loss or damage that is likely to be suffered by the them caused by the defendants' conduct. The orders sought pursuant to s 87(1) of the TPA include orders that an amount of money be paid that is sufficient to compensate the plaintiff and "other persons" for loss or damage suffered by them together with an order that an amount of money be paid sufficient to provide compensation to the plaintiff and "other persons" for loss or damage likely to be suffered by them as the result of the defendants' conduct. These amounts are to include the reasonable cost of hospital, medical, surgical and dental care and treatment for persons suffering from, and who may suffer from, smoking related disease as a result of the defendants' conduct and to reimburse health care providers for the their treatment costs (paragraph 3.12 of the ASC and paragraph 3.4 of the 2ASC). 24 Issues raised by the plaintiff's claim concern the conduct of the defendants over a period of almost thirty years. The claim embraces every item of advertising or other promotional material published by the defendants over this period together with every public statement made by, or on behalf of, them.
25 No particulars are given of the "other persons" who are said to have been directly or indirectly influenced by the conduct of the defendants and on whose behalf claims for compensation under s 87(1) are made. Mr Francey in outlining the plaintiff's case on the earlier, pleading, motion submitted that it would be open to the plaintiff to lead evidence of a survey nature in support of the contention that the defendants' contravening conduct caused and/or contributed to "other persons" commencing to smoke, continuing to smoke, recommencing to smoke or not ceasing or quitting to smoke cigarettes. It would seem that the plaintiff contemplates leading sample or epidemiological evidence in support of the contention that "other persons" have suffered, or are likely to suffer loss and damage.
26 The Philip Morris defendants filed a motion on 11 July 2002 claiming orders including, in prayer 2, a declaration that the plaintiff does not have the standing to bring a claim on behalf of "other persons". As I understand it the Wills defendants also challenge the ability of the plaintiff to bring such a claim. The Philip Morris defendants' motion together with motions filed by the Wills defendants and the Rothmans defendants were listed for hearing on 31 March 2003. On that occasion the parties were agreed that the convenient course was to address only those issues raised by prayer 1 of the Phillip Morris defendants' motion (the pleading challenge) and the like challenges brought by the other defendants. The challenge articulated in prayer 2 of the Phillip Morris defendants' motion was stood over together with the other defendants' motions. Any issue as to the plaintiff's ability to bring proceedings under the provisions of the TPA, not being a representative proceeding, claiming compensation in respect of an unparticularised group of "other persons" has not been determined. The present application is to be approached upon the basis that the plaintiff's claim is an arguable one. 27 The defendants acknowledge that to the extent that the plaintiff brings a claim for personal injuries, whether at common law or pursuant to the provisions of the TPA, they cannot be heard to contend that a security order should be made. However, in their submission the structure of the present proceeding is such as to overwhelm the plaintiff's personal claim. I am invited to infer from statements made by Mr Francey during the hearing of the earlier motion that the plaintiff has had no choice in the way that the claim has been framed. In this respect my attention was drawn to the following passages the transcript: "Francey: In this case we are proceeding from this mammoth, giant, joint plan that Spender J talked about (a reference to the judgment in Philip Morris (Australia) Ltd v Nixon [2000]. Which in fact we have uncovered and pleaded, and we are progressing along the way to advancing the case. (T 153) … That is probably a convenient time for me to deal with that aspect of the matter before coming to the way in which we've tried to structure the claim, because another factor we would want your Honour to take into account in deciding what level of specificity is required at this point as opposed to an acceptable degree of generality is to take into account what happens if this claim cannot go ahead. I can assure your Honour that this is probably the last opportunity for this to be dealt with in any comprehensive way. You might have a few individual cases like in the McCabe (a reference to the McCabe v British American Tobacco Australia Services Ltd [2002] VSC 73; British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197) case last year with document destruction. But my attitude was when Maurice May came to see me, if I'm going to be doing this for nothing or on spec I'm not going to be doing it for one person. It's just not worth my time. If you want to expose the entirety of the conduct and try to achieve comprehensive relief and do what Myriam Cauvin wants to do is to stop the people ending up in the same situation that she ended up in, she doesn't even want full compensation. Mr Sher generously put it back at $500,000 or 1 m. Now, if that is an offer, I will take instructions and she will probably take it. The fact is that you will see from her affidavit that what she said is she wants to be independent of the disability pension, she wants to have her medical expenses and future medicals covered, she wants to provide for her son and she wants to have centres set up to help other people who are addicted to help them become un-addicted for a variety of reasons … " (T 161-162). … So, for example, the Court could constitute these proceedings as representative proceedings under the Federal Court Act , since we comply with the requirements of the broad canvas and the giant, joint plan, in which case under the Trade Practices Act the Court could make orders on behalf of any person, if we worked out an acceptable definition of group members, but that is a procedural thing far down the track if that's the way the case got conducted, and the Court was interested in providing comprehensive relief for everyone, given that the statement of claim is framed in a way that eliminates time limit problems for everyone. So anybody who has a smoking related disease, however long ago, is eligible to make a claim. If they get a disease in the future, they can make a claim. The Court can order that a fund be established to make provision for people who suffer harm in the future, and the Court can make orders that remedy the effects of the conduct and prevent or reduce harm. That is the scope of result that the Court is able to achieve, if we get there, and it has the benefit, as I say, of time limits being overcome and people not having to commence their own proceedings, but there has to be some manageable way of conducting the litigation and we don't know who else wants to make claims. That is what we are trying to get around, and that's why the pleading has been framed in the way that it is, because it has to be at a level of generality that gives all these other people an opportunity to participate. So we can't deal with Myriam Cauvin bought a packet of cigarettes off Y company at X shop reading such and such a sign, because it defeats the whole purpose of the exercise and wastes my time, so that's why we've done it the way we've done it (T 176-177). We have sought to invoke to provide the broadest possible scope of liability. (T 205). Is our statement of claim seriously to be struck out with potentially millions of people able to be compensated or harm prevented because we replicate a section from the Act (T 207). We are prepared to meet any language problem in the document and we have gone through their objections, we will go through every argument that your Honour upholds and ensure that this statement of claim is as good as it can possibly be, as long as it is understood that what it is directed to is a particular goal. (T 130). So we took those into account when we amended the statement of claim. That is reflected in both the first and second defendants' written submissions and revised attachment "A", and Mr Beach's revised schedules, because we have taken into account their criticisms. But, your Honour, we are not going to amend the statement of claim to delete the reference to 'others' and we are not going to amend the statement of claim to delete references to way in which the defendants and those represented by them conspired together and engaged in particular forms of conduct or as part of a giant plan (T 206-207). So that raises problems in terms of quantification of harm and the effect of the conduct. The extent to which harm from smoking is attributable to the conduct pleaded, that's going to be a problem for us. We're going to have to work out how to deal with that. We've got to be able to establish that at least certain people have suffered harm. Your Honour, then what we say is - say we produce 1,000 people from various States and Territories, all of whom are able to demonstrate harm to the same extent, for example, that Ms Cauvin can. Then the Court is faced with this situation: do you give those 1,000 people $1m or $ 2m each or whatever it is? Or do you say, 'hold on, if there is 1,000 people like that and there's 1.6 million who are going to get smoking-related disease, maybe some funds should be set up with a scheme that provides compensation for everyone, because it's going to be fairer and more equitable. … Ms Cauvin, as I said, at the moment all she wants is to be off the pension, have her medical expenses covered, to provide for her son and prevent harm to other people so they don't end up in the same situation as her. She's not going to make too great an inroad. Other people may want to make claims, but it seems to me that if that is the level of potential claimants, it's pointless of them all tripping along to the Supreme Court. (T 186) 28 In the defendants' submission the plaintiff is bound by the statements and concessions made by Mr Francey during the course of the hearing; Haller v Worman (1861) 3 LT 741, Yonge v Toynbee [1910] 1 KB 215 at 233-234 and Neale v Lady Gordon Lennox [1902] 1 KB 838 at 843.
29 The defendants also point to the terms of the letter from Maurice May &Co to which I have referred at [4] above: "Moreover, that conduct has caused, and has the potential to cause, wide spread loss or damage to numerous other persons. In these circumstances, to seek wide-ranging declaratory and injunctive relief to expose the conduct and remedy the effect of the conduct is surprising given the Trade Practices Act specially provides for such relief. The fact that it is sought to establish an unprecedented regime for compensatory relief is also simply a consequence of the conduct of your clients and the other parties to the conspiracy." 30 The question raised by the present application is whether the ordinary principles that tell against the making of a security order in respect of an impecunious litigant who is resident within the jurisdiction have application to the "broad canvas" case that the plaintiff pleads. She concedes her impecuniosity and yet seeks to pursue a case that is vast in scope and is likely to involve discovery on a massive scale in circumstances in which there exist no prospects for her to pay costs should an order be made against her.
31 The defendants submitted that it is relevant to take into account that the litigation brought by the plaintiff raises issues concerning their conduct over nearly thirty years. The scope of interlocutory proceedings, including discovery, is likely to be great. It is reasonable to consider that legal costs of a most substantial order will be incurred by each of them in defence of the proceedings. Mr Francey observed that the plaintiff has access to a very large number of documents said to bear on the issues raised by her pleading. In this respect he took me the affidavits of Professor Chapman. Mr Francey submitted that it was conceivable that the case could be run without the plaintiff requiring discovery from the defendants. This aspect of the future conduct of the proceedings was not further developed. It is a stance that was at odds with the stance adopted on the earlier occasion. During submissions on the pleading challenge on a number of occasions reference was made to the plaintiff's ability to furnish fuller particulars of her claim after discovery: "Mr Francey: One needs to accept that there is going to be interlocutory processes and case management, and orders for statements and witnesses, or expert witnesses, or whatever else is involved, plus discovery and the interrogatories and the like. Say, for example, are the pleadings, once the defences are on, of a kind that will enable the categories of documents to be defined that the defendant should be required to discovery? That is something we would have to undertake to present, and the Court would probably need to approve it given the scale of discovery that is involved and things like that" (T 220-221). 32 It was accepted by all parties that a consideration of the merits of a plaintiff's claim is a relevant factor when determining whether to make a security order. In this respect Mr Francey took me to the affidavits of Professor Chapman, SC1 and SC2. In his submission having regard to this material and in light of the failure of the defendants to adduce evidence that it was their intention to defend the claims made against them I should determine the matter upon an assessment that it is highly likely that the plaintiff will be able to establish the contraventions of the TPA (and the FTA equivalent provisions) that she pleads and that some remedial injunctive relief will be ordered by the Court. 33 Mr Francey's submission there was no evidence that the claim was to be defended did not impress me as one of substance. The defendants enjoyed a substantial measure of success on their applications to strike out parts of the ASC. The present position is that the plaintiff's motion for leave to deliver the 2ASC is yet to be heard and, thus, no defence has been filed. Mr Sackar informed me that the proceedings would be defended and that the allegations of conspiracy are in issue. I deal with the present application upon the basis that the proceedings will be defended and that they will be lengthy and involve substantial cost. In this respect I do not attach weight to the suggestion that I have noted above that it was "conceivable" that the litigation might be conducted without the plaintiff obtaining discovery.
34 It is difficult in a proceeding such as this one to arrive at a realistic assessment of the plaintiff's prospects of success. The litigation is on a grand scale and both the ASC and the 2ASC are possessed of novel features. It seemed to me, on occasions, that Mr Francey was inclined to underestimate the difficulties that may present themselves in seeking to establish the plaintiff's case. The bald assertion that there are in the public domain a large number of documents that are said to establish the case may be to put the matter rather too high. That point seemed to me to be well illustrated by Mr Sackar's submission concerning a document titled "Position Paper", which is annexed to Professor Chapman's affidavit. The "Position Paper" was particularised in paragraph 2.4 of the ASC in support of the plaintiff's assertion that between mid-1976 and late 1977 the companies represented by the defendants and others met and conspired to engage in conduct that was misleading or deceptive or likely to mislead or deceive, amongst other things by procuring their subsidiary companies, including the defendants, to engage in such conduct. I struck out paragraph 2.4 of the ASC. The plaintiff in the 2ASC seeks to plead a case relying upon the same conspiracy and she particularises the "Position Paper" in paragraph 2.4. I make no comment on the pleading in this respect beyond noting that the "Position Paper" continues to have prominence to the case that the plaintiff seeks to make (that each of the defendants was a party to a conspiracy to generate and maintain a false medical controversy concerning smoking and addiction and smoking and smoking-related disease). It may be that the plaintiff can establish that the "Position Paper" is a disingenuous document created in furtherance of the conspiracy that she pleads. But the document alone does not seem to me to prove that fact.
35 In Melville v Craig Nowlan & Associates Pty Ltd [2002] NSWCA 32; 54 NSWLR 82 the claimant relied on Bryan E Fencott and Associates v Eretta Pty Ltd (1987) 16 FCR 497 at 514 in which French J said: "Where there is a claim prima facie regular and disclosing a cause of action, I see no reason why the Court would, in the absence of evidence, proceed on the basis that the claim was other than bona fide with a reasonable prospect of success".
Heydon JA observed of this approach, at [121]: "But it does not follow from the fact that a claim discloses a cause of action that it has a reasonable prospect of success. To state a cause of action which can survive a strike out application is to comply with formal and legal requirements; whether the cause of action so stated will succeed depends on other legal matters and evidentiary matters." 36 I approach this application upon the footing that the plaintiff's claim is arguable.
37 In supplementary written submissions the Philip Morris defendants contended: "Australian courts have recognised that the 'general rule' that 'poverty is no bar to a litigant' does not prohibit the Court ordering an impecunious, natural person to provide security for costs: see, for example, Cunningham v Olliver (unreported) Federal Court of Australia, Burchett J, 21 November 1994 at [6]; Woodhouse v McPhee (1997) 80 FCR 529 at 531; Ryan v Great Lakes Council (1998) 154 ALR 584 per Wilcox J. More recently in Bray v F Hoffmann-La Roche Ltd (2003) 200 ALR 607 (a case concerning whether security for costs ought be ordered in a representative proceeding under Pt IVA of the Federal Court Act ), Finkelstein J was of the view that (at [252]): '[I]f there is still a rule that an order for security should not be made against an impecunious natural person (for a criticism of the absoluteness of this rule see Melville v Craig Nowlan & Associates (2002) 54 NSWLR 82), the rule may have little application to many class actions.' In Melville v Craig Nowlan & Associates (2002) 54 NSWLR 82 ( Melville ), the Court of Appeal unanimously held that the plaintiff's impecuniosity is only a factor to be considered by the Court in the exercise of its discretion to order security for costs against an impecunious natural person: see also Carriage v Stockland (Constructors) Pty Ltd (No. 2) [2002] NSWLEC 121 per Talbot J; Carriage v Stockland (Constructors) Pty Ltd (No. 2) [2002] NSWLEC 217 per Pain J." 38 While the cases upon which the defendants rely are concerned with the exercise of the discretion to order security pursuant to the provisions of the Federal Court Act 1976 (Cth) or the Land and Environment Court Act 1979 (NSW) in their submission the reasoning of these decisions has application to the circumstances of this case. In particular it is submitted that it may be appropriate to order an impecunious plaintiff to provide security for costs where she prosecutes proceedings not only on her own behalf but on behalf of a vast number of "other persons". 39 Principal reliance was placed by the defendants on the judgment of Heydon JA (with whom Young CJ in Eq agreed) in Melville. In this respect Mr Sackar drew attention to his Honour's remarks at [102]: 'There is, however, one significant difference between the type of litigation to which the traditional rules as to security for costs applied, including the rule to which the claimant appeals, and s 123(1) litigation. Leaving aside instances of statutory standing, leaving aside the role of the Attorney-General (acting either alone or on the relation of another), and leaving aside the capacity of citizens to utilise the prerogative writs to control government action, most civil litigation was traditionally conducted by one person or a small group of persons seeking to vindicate rights enforceable only by that person or persons. If D broke a contract to which P was the only other party, in general only P could enforce it. If D committed a tort against P and no-one else, in general only P could complain. Hence if P were impecunious, the effect of ordering a stay until security for D's costs was provided was to prevent D's breach of the law from being remedied at all. In its practical operation, the rule against orders that impecunious natural persons provide security for costs overlaps with the disinclination of courts, in their discretion, to make orders the effect of which would be to frustrate the particular litigation. So far as D's conduct extended beyond actionable damage to P alone and damaged the public, any plaintiff had to comply with the criteria for standing stated in Boyce v Paddington Borough Council [1903] 1 Ch 109, which, even as modified by such High Court cases as Australian Conservation Foundation Inc v Commonwealth of Australia (1980) 146 CLR 493, were not easy to satisfy. But provisions permitting 'any person' to commence litigation have abolished standing requirements. Like the equivalent words in s 80(1) of the Trade Practices Act 1974 (Cth) ( Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591), the words 'any person' in s 123(1) are not to be read as meaning anything different from what they say: Sydney City Council v Building Owners and Managers Association of Australia Ltd (1985) 2 NSWLR 383 at 386-387. It is true that before the enactment of s 80 in 1974 and s 123 in 1979, there were numerous statutes granting standing to affected persons or to any person. But these statutes tended to operate in specific and limited areas. They did not apply in fields as extensive as the fields of human activity to which the Trade Practices Act (Cth) and the Environmental Planning and Assessment Act apply. They did not alter the general character of civil litigation as being litigation between one or a small number of injured plaintiffs and one or a small number of defendants. Personal right and remedy were generally closely linked. If a plaintiff was debarred by a stay until provision of security from proceeding with litigation, the wrong committed or threatened by the defendant was incapable of remedy. That is not true where standing is wide and unrelated to a legal wrong specifically injuring the particular plaintiff."
His Honour continued by observing that a very large number of natural persons and corporations were capable of enforcing the provisions of the Environmental and Planning and Assessment Act . He went on to say at [102]: "[L]itigation under s 123(1) is still of a totally different kind from the type of litigation in which the courts worked out the general rule that poverty did not bar access to the court."
40 Important to Heydon JA's reasoning in Melville was the consideration that even if an order for security operated to bring the proceedings to an end in so far as the applicant was concerned, a person capable of providing security might institute similar proceedings within the relevant time. In this sense it was not apt to see the litigation, in the sense of the merits of the dispute, being stifled by the making of the order. 41 In this proceeding the defendants contend that the "general rule" (that an impecunious personal litigant within the jurisdiction not be made subject to a security order) should not apply since the plaintiff is seeking to enforce the rights of potentially millions of people. Any one or more of this substantial number of persons, including public health authorities, regulatory authorities and health care providers might bring the same, or a substantially similar, proceeding. It could not be said that an order for security against the present plaintiff would "prevent the merits of the controversy from being determined". 42 In the defendants' submission the plaintiff bears the onus of establishing that a security order would prevent her from advancing the claim. In their submission she has not adduced evidence of the circumstances in which proceedings of this breadth came to be brought and maintained or in support of the proposition that a security order would stifle them. There was no evidence that that plaintiff has sought to raise funds to meet the costs of the litigation or of any inquiries made by her to identify from among the "others persons" those who might be able to provide security.
43 In support of the above submission the defendants relied on the observations of Heydon JA in Melville at [126] and on the decision of the Full Federal Court in Bray v F Hoffmann-La Roche Ltd (2003) 200 ALR 607. In the latter respect they point to the observations of Carr J at [142]: "Much would depend upon the number of group members involved, their financial circumstances and in particular whether an order for security for costs might stifle the proceedings. In that regard, in my opinion, it was for the applicant to adduce evidence about the likely effect of any order for security for costs. She chose not to do so and in my view, the discretion having been miscarried [by the trial judge], it should be exercised again."
44 Mr Francey submitted that Melville was not of application to the present proceeding since it concerned the power to make an order for security under the Land and Environment Court Act in relation to a claim brought to vindicate the provisions of the Land and Environment Act. He noted that among the factors bearing on the exercise of the discretion to make a security order pursuant to the provisions of s 69(3) of the Land and Environment Court Act in Melville that the Court took into account was the means of the defendant. 45 The defendants were content for me to approach the matter upon the basis that each of them is a corporation of substance. The discretionary consideration to which Heydon JA referred in Melville relating to the circumstances of the true respondent in that case is not raised by the present proceedings.
46 Heydon JA's observations in Melville that I have set out at [39] above, concerning the considerations raised by litigants bringing claims under legislation that allows open standing were expressed to be applicable to litigation under s 80(1) of the TPA as much as to litigation pursuant to s 123(1) of the Environmental Planning and Assessment Act 1979. However, his Honour was concerned with the construction of s 69(3) of the Land and Environment Court Act 1979. The claimant in Melville sought to contend that the general words of s 69(3) were to be read down so as to incorporate the general rule that a natural impecunious litigant resident within the jurisdiction would not be required to provide security for costs. At paragraph [99] and following his Honour set out the history of the "general rule". He cited Sykes v Sykes (1989) LR 4 CP 645 at 647 per Bovill CJ: "By the law of this country a party is not precluded from enforcing his rights in a Court of law by reason of his poverty. In many cases, no doubt, the inability of an unsuccessful litigant to pay costs to his successful adversary works hardship; but it is for the legislature to provide a remedy, not for us."
His Honour posed the question raised by the application in Melville in these terms at [99]: "The issue under debate in these proceedings is whether s 69(3) has provided a remedy".
His Honour went on to refer to the judgment of Bowen LJ in Cowell v Taylor (1885) 31 Ch D 34 at 38 and then to say at [101]: "By 'basic rule' Sir Robert Megarry V-C meant, and by 'general rule' Bowen LJ meant, that the rule is a strict one, though it is subject to specific exceptions (eg, in relation to appeals, and nominal plaintiffs). They did not mean that generally insolvent plaintiffs will not be ordered to provide security, unless in the specific circumstances of a particular case a court thinks it just to make the order. As Baggallay LJ said in Cowell v Taylor (at 37): 'The rule is that anyone may sue without giving security, in any but excepted cases'. While it is possible that the 'rule' is less absolute than these formulations would suggest, and while there may be room for debate about the true nature of the rule ( Morris v Hanley [2000] NSWSC 957 at [11] - [21]), whatever the scope of the rule, the claimant contends that it has not been abolished by s 69(3). In consideration that submission, it is convenient to assume that the rule is an absolute one, and that it is a rule of fundamental importance." 47 Heydon JA concluded that the claimant's arguments that words of s 69(3) should be read down (so as to incorporate the general rule) were to be rejected. In this respect he said at [110]: "While the general law rule is of a kind which would call for clear language if it were to be abolished, it is hard to see how language much clearer than that used in s 69(3) could have been employed." 48 There has been no statutory change to the "general rule" with respect to proceedings in this Court. Heydon JA was content to deal with the submissions in Melville upon an assumption that the "general rule", to which Bowen LJ referred in Cowell v Taylor, was a strict one, though subject to specific exceptions. His Honour noted that it was possible that the "rule" was less absolute than the formulations in Cowell v Taylor would suggest. In this respect he cited the judgment of Young J in Morris v Hanley. Young J in concurring with the reasons of Heydon JA in Melville added some comments of his own adhering to the views that he had expressed in Morris v Hanley. The decision in that case was reversed in the Court of Appeal, but not for reasons that called into question his Honour's statement of the general principles.
49 In Morris v Hanley Young J considered the nature of this Court's inherent power to make an order for security for costs in a case involving a natural litigant. After reviewing the history, his Honour said: "[18] The fundamental reason that the so-called 'poverty rule' is really just one of the factors that a Court looks at to consider the basic question of whether it would be vexatious to allow the proceedings to continue without security. It is seldom correct to limit the Court's jurisdiction and discretion under such a general proposition by honing down too finely a sub-rule or guideline. [19] The practical reason is that the suggested restatement is probably too restricted because it is directed too much to the circumstances of this particular case. The situations that cause the Court particular concern are cases where there is a litigant in person who is alleged by the defendant to have an obsession against the defendant and who brings very expensive proceedings against the defendant with little intervention by lawyers. One such case was Rajski v Computer Manufacture and Design Pty Ltd [1982] 2 NSWLR 443 and on appeal [1983] 2 NSWLR 122. … … [21] It is quite clear that when one is considering the general matter of vexatious conduct warranting security for costs under the inherent power, one of the matters that the Court takes into account is the question of the non-availability of funds on the part of the plaintiff. … … [23] The leading cases show that the factors a Court must take into account when considering the general question as to whether the inherent power should be exercised to order security for costs include: (a) Whether the plaintiff's claim is bona fide and not a sham; (b) whether the plaintiff has a reasonably good prospect of obtaining the orders he or she seeks; (c) whether an order for security would bring the proceedings to an end; (d) whether the plaintiff has a want of assets and how this was brought about; (e) whether there is anyone standing behind the plaintiff who might benefit from the action but who is unwilling to contribute to the risk involved in the action; and (f) the question of delay. [24] This list is a non-exhaustive list of guidelines and one must not loose sight of the basic question as to whether the action is harassing and vexatious. For a more exhaustive list see Colbran on Security for Costs (Longman Profession Melbourne, 1992) ch 14." 50 The plaintiff's claim is a bona fide one and not a sham.
51 The plaintiff acknowledges that she is impecunious. This is a not a case in which it is suggested that the plaintiff has divested herself of assets with a view to immunising herself from the consequences of the litigation. There is nothing to suggest that absent her medical condition she would have been in a position to fund litigation as ambitious as the present.
52 There is no evidence that the plaintiff has persons standing behind her in the sense of any identified individual or group of individuals who might benefit from the action, but who is unwilling to contribute to the risk involved in it. 53 Mr Beach drew attention to the manner in which the litigation has been conducted to date. In particular he pointed to the circumstance that paragraphs in the ASC that had been struck out are repleaded in the 2ASC. I understood Mr Beach to invite me to approach the matter upon the basis that the future conduct of the litigation was likely to unnecessarily drawn out by reason of the reluctance on the part of the plaintiff's legal representatives to conduct it in an orderly way. I have not heard from Mr Francey on the issues raised by the proposed 2ASC. Whatever the validity of the criticisms that are made of the 2ASC it does not seem to me appropriate to view the plaintiff's claim as analogous to the cases that Young J had in mind in paragraph [19] of his judgment in Morris v Hanley.
54 The plaintiff has a personal claim that she brings against each of the defendants. She seeks to make a case that by reason of the defendants' agreement to engage in conduct that was false and misleading and/or unconscionable she was influenced so as to continue smoking and/or not to stop smoking cigarettes. This claim brought under the provisions of the TPA (and the equivalent provisions of the FTA) is said to have forensic advantages in that she overcomes causation difficulties that might attend a common law claim for damages for personal injuries brought against one or more of the defendants. Mr Francey notes that she is, in any event, time barred in respect of such a claim. The plaintiff's personal TPA case raises the broad conspiracy allegations. She has a right to bring proceedings to enforce the TPA: Truth About Motorways Pty Limited v Macquarie Infrastructure Investment Management Limited [2000] HCA 11; 200 CLR 591.
55 In Rajski v Computer Manufacturer and Design Pty Ltd [1982] 2 NSWLR 443 Holland J observed at 448: 'In my opinion, the inherent jurisdiction to award security for costs cannot validly be said to be restricted to Halsbury's examples or other examples in the decided cases in the sense of denying the existence of the power for any other cases."
In that case his Honour had earlier referred to the Court's inherent power to regulate its own practice and procedure to procure "proper and effective administration of justice and prevent abuse of process" (at 447). As I have noted, Young J referred to the "basic question" being whether it would be vexatious to allow proceedings to continue without security. If it is to be said that to allow the present proceeding to continue without security would be vexatious it seems to me it would be because of a view that it is not open to a litigant to plead a claim pursuant to the TPA (and its FTA equivalent provisions) with respect to an unparticularised group of "other persons" claiming relief under s 87 of the TPA including in the way of compensation for the loss and damage occasioned to these "other persons". As I have noted, such a challenge has not been determined. 56 I have concluded, upon the assumptions that I was invited to make, that I should not impose an order for security upon the plaintiff. The observations of the majority in Melville, while of application to claims under the TPA as well as to claims under the Environmental Planning and Assessment Act, concerned the powers conferred on the court by the Land and Environment Court Act. I am not persuaded that the defendants have established that the Court's inherent jurisdiction should be invoked to make a security order in a case that is regularly commenced, arguable, not vexatious and brought by a natural impecunious litigant resident within the jurisdiction.
(i) Dismiss each of the first and second defendants', third and fourth defendants' and fifth and sixth defendants' motions claiming security for costs.
(ii) The defendants are to pay the plaintiff's costs of the motion **********
Last Modified: 12/22/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Myriam CAUVIN
PHILIP MORRIS LIMITED
[2002] VSC 73
[2002] VSCA 197
(2003) 200 ALR 607
(1987) 16 FCR 497
(1997) 80 FCR 529
(1998) 154 ALR 584
(2002) 54 NSWLR 82
(1980) 146 CLR 493
(2000) 200 CLR 591
(1985) 2 NSWLR 383
Each of the first and second defendants’, third and fourth defendants’ and fifth and sixth defendants’ motions for security for costs was dismissed. The defendants were ordered to pay the plaintiff’s costs of the motions.