Myriam Cauvin v Philip Morris Limited - [2003] NSWSC 631 - NSWSC 2003 case summary — Zoe

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Myriam Cauvin v Philip Morris Limited

[2003] NSWSC 631

Supreme Court of NSW|2003-08-01|Before: Bell J

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Court

Supreme Court of NSW

Decision date

2003-08-01

Before

Bell J

Source

Original judgment source is linked above.

Judgment (179 paragraphs)

[1]

CITATION : Myriam Cauvin v Philip Morris Limited (ACN 004 694 428) (Including as representative of the Companies set out in Schedule 1 of the Statement of Claim) & Ors [2003] NSWSC 631 HEARING DATE(S) : 31/3/03, 1/4/03, 2/4/03 JUDGMENT DATE : 1 August 2003

[2]

JUDGMENT OF : Bell J at 1 DECISION : Strike out those parts of the statement of claim that are set out in the Schedule that is annexed to these reasons; Dismiss the seventh defendant's motion for summary dismissal.

[3]

Civil Liability Amendment (Personal Responsibility) Act 2002 Fair Trading Act 1987 LEGISLATION CITED : Federal Court of Australia Act 1976 (Cth) Supreme Court Rules 1970 Trade Practices Act 1974 Trade Practices Amendment Act 1977 Banque Commerciale SA en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 Bendix Mintex v Barnes (1997) 42 NSWLR 307 Braybrook v Wright [1916] WN 74 Carnie v Esanda Finance Corporation Limited (1994-1995) 182 CLR 398 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd (1997) 155 ALR 714 Dare v Pulham (1982) 148 CLR 658 CASES CITED : General Steele Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Giorgianni v The Queen (1985) 156 CLR 473 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 Philip Morris (Australia) Ltd v Nixon [2000] FCA 229; 170 ALR 487 State of Western Australia v Bond Corporation Holdings Ltd & Ors (1991) ATPR 41-081 Tobacco Control Coalition Incorporated v Philip Morris (Australia) Ltd & Ors [2000] FCA 1004 Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11; 74 ALJR 604 Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] FCA 918 Yorke v Lucas (1985) 158 CLR 661 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) 7th Defendant - IMPERIAL TOBACCO AUSTRALIA LTD (ACN 046 148 681) FILE NUMBER(S) : SC 11301/02 Plaintiff: N. Francey 1st & 2nd Def: J.Sher QC / J. Sackar QC/ S. O'Meara COUNSEL : 3rd & 4th Def: D. Beach SC / M. Wheelahan 5th & 6th Def: I. Jackman / S. Goodman 7th Def: L. Foster SC / I. Pike Plaintiff: Maurice May & Co 1st & 2nd Def: Allens Arthur Robinson SOLICITORS : 3rd & 4th Def: Corrs Chambers Westgarth 5th & 6th Def: Baker & McKenzie 7th Def: Gilbert & Tobin

[16]

11 The defendants placed particular emphasis on the judgment of Foster J in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Ltd (1998) ATPR ¶ 41-633. In that case, dealing with a claim brought pursuant to s 52 of the TPA, his Honour said at 40,977: "In the forefront of the statement of claim are contentions that the respondent has acted in breach of s 52 of the Act in that it has engaged in conduct, in trade or commerce, that is misleading or deceptive. In this connection it is important to remember that, as Fox J said in Brown & Anor v Jam Factory Pty Limited & Anor (1981) ATPR ¶40-213 at 42,928; (1981) 53 FLR 340 at 348: - 'Section 52(1) is a comprehensive provision of wide impact, which does not adopt the language of any common law cause of action. It does not purport to create liability at all; rather does it establish a norm of conduct, failure to observe which has consequences provided for elsewhere in the same statute, or under the general law.' It necessarily follows that when the section is sought to be used in litigation as the foundation of a cause of action or claim for some specific form of relief, it is imperative that the factual basis upon which the section is alleged to be brought into play must be stated with appropriate clarity in a statement of claim. This is, of course, a fundamental principle of pleading." 12 The plaintiff pleads causes of action against the seven defendants, and a number of overseas companies identified in Schedules 1 - 4 that are said to be represented by them, pursuant to Pts IVA and V of the Trade Practices Act 1974 (TPA) and the equivalent provisions of the Fair Trading Acts of each State and Territory (as identified in Schedule 5) (the FTA). The defendants, and the companies that they represent, are alleged to have 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). The plaintiff pleads in the alternative that the defendants' conduct was unconscionable contrary to the provisions of s 51AA or 51AB of the TPA (and the FTA equivalent provisions). The plaintiff's claim in unconscionability depends upon the same facts and circumstances as are pleaded in support of the claim brought under s 52 of the TPA.

[41]

28 The only particulars provided in support of the assertion in paragraph 1.24 that PM, MPI and PMC were at all relevant times involved in the affairs or activities of the Philip Morris defendants and, by reference to paragraph 1.25, that the Philip Morris defendants acted at the direction, and it may be subject to the control, of PM, PMI and PMC are the matters set out in (a) and (b). These particulars assert that PMC and/or PM and/or PMI are and have been for several years, directly or indirectly, a shareholder in one or other or both of the Philip Morris defendants and that the Philip Morris defendants have, in effect, distributed for sale within Australia cigarettes manufactured by or for PM and or manufactured cigarettes under brand names of PM and/or PMC at various times, presumably pursuant to some licence agreement or other arrangement or understanding between the respective companies. From March 1986 the second defendant was a wholly owned subsidiary of PMC. 29 In paragraph 1.2 the plaintiff pleads that at all relevant times the Wills defendants had BAT as their ultimate holding company. The only particulars provided in support of the assertion in paragraph 1.24 that BAT, B.A.T. Industries, BAT Investments and BATUKE were at all relevant times involved in the affairs or activities of the Wills defendants and, by reference to paragraph 1.25, that the Wills defendants acted at the direction, and it may be subject to the control, of BAT, B.A.T. Industries, BAT Investments and BATUKE are the matters set out in (c), (d) and (e). BAT and/or BAT Investments is, or are, said to be and to have been for several years directly or indirectly, including through BATA, a shareholder in one or other or both of the Wills defendants. BATA is a reference to the sixth defendant (paragraph 1.3(a)). BATUKE is and is said to have been for several years directly or indirectly involved in the export to Australia of cigarettes manufactured by or for BAT and BAT Investments. One or other or both of the Wills defendants are said to have distributed for sale to consumers within Australia cigarettes manufactured by or for B.A.T. and/or BAT Investments and/or manufactured cigarettes under brand names of B.A.T. and/or BAT Investments presumably pursuant to some licence agreement or other arrangement or understanding between the respective companies. The references to B.A.T. in paragraph 1.24(e) are confusing. Schedule 2 refers to B.A.T. Industries plc. In paragraph 1.15 B.A.T. Industries, P.L.C. is referred to as "B.A.T. Industries". British American Tobacco p.l.c. in Schedule 2 is referred to in paragraph 1.14 as British American Tobacco, P.L.C. ("BAT"). In paragraph 1.15 BAT is alleged to be the successor to B.A.T. Industries. I take the reference to "B.A.T." in paragraph 1.24(e) to be a reference to B.A.T. Industries. 30 The only particulars provided in support of the assertion in paragraph 1.24 that RJR or RJR Holdings were at all relevant times involved in the affairs or activities of the Rothmans defendants and, by reference to paragraph 1.25, that the Rothmans defendants acted at the direction, and it may be subject to the control, of RJR or RJR Holdings are the matters set out in (f). These particulars assert that one or other or both of the Rothmans defendants have distributed for sale to consumers within Australia cigarettes manufactured by RJR or RJR Holdings, and/or manufactured cigarettes under brand names of RJR or RJR Holdings presumably pursuant to some licence agreement or other arrangement or understanding between the respective companies. 31 The only particulars provided in support of the assertion in paragraph 1.24 that Imperial and/or Imperial Group were at all relevant times involved in the affairs or activities of ITA, by reference to paragraph 1.25, that ITA acted at the direction, and it may be subject to the control, of Imperial and/or Imperial Group are the matters set out in (g). These particulars assert that Imperial and/or Imperial Group are and have been for several years directly or indirectly a shareholder in ITA. 32 The existence of some common shareholding and/or of a contractual arrangement for the distribution of cigarettes does not seem to me to provide a sufficient basis for the assertion that the defendants have the same interest in the proceedings as the companies that they are said to represent. The position of the second defendant in the period since March 1986 is in a different category since the plaintiff pleads that from that date the second defendant has been the wholly owned subsidiary of PMC. However, the pleading remains inadequate in that it is asserted that the acts, actions, activities and conduct of the Phillip Morris defendants were acts done, actions performed, or activities or conduct engaged in at the direction of the companies represented by them without differentiation between the first and second defendants or PM, PMC and PMI or, for that matter, the companies named in Schedules 2, 3 and 4.

[42]

33 In his written submissions Mr Beach SC, who with Mr Wheelahan appeared for the Wills defendants, took up the question of whether there are "numerous persons" such as to attract the operation of Pt 8 r 13(1). He referred to the discussion of the history of the rule in the judgment of Toohey and Gaudron JJ in Carnie at 415. Their Honours observed that the rule is drawn from an English rule that was, in turn, derived from the practice of the Court of Chancery. In this context their Honours referred to a passage in the judgment of Lord Macnaghten in Duke of Bedford v Ellis [1901] AC at 8: "The old rule in the Court of Chancery was very simple and perfectly well understood. Under the old practice the Court required the presence of all parties interested in the matter in suit, in order that a final end might be made of the controversy. But when the parties were so numerous that you never could 'come at justice', to use an expression in one of the older cases, if everybody interested was made a party, the rule was not allowed to stand in the way. It was originally a rule of convenience; for the sake of convenience it was relaxed." 34 Mr Beach also referred me to Braybrook v Wright [1916] WN 74 noting that in that case five parties had been found not to be so numerous as to admit of a representation order. 35 Mr Francey submitted that the requirement that there exist "numerous persons" having the "same interest" in proceedings for the purposes of Pt 8 r 13 of the SCR is satisfied. As I understood his argument he did not contend that the total of eleven companies identified in Schedules 1 - 4 constituted "numerous persons" within the meaning of the rule. Rather he submitted that the potential existed for numerous persons to be joined as defendants to the proceedings. These being persons who had participated in the international conspiracy that is pleaded in paragraph 2.4. For ease of management of the proceedings the plaintiff had elected to sue the defendants each as representing a limited number of overseas companies with whom the defendants were said to be closely associated. Thus, in supplementary written submissions Mr Francey contended: "It is not the point that the plaintiff has chosen to have certain of the defendants represent certain only of the overseas companies, nor that there are only eleven represented companies identified. The requirement of numerocity is satisfied by the vast array of companies and individuals said to have been involved in the implementation of international conspiracy in Australia: see the following sections of the amended statement of claim: · Note (i) (page 5). · Paragraph 2.4 and particulars there under (pages 15 - 17) - in particular the document identified in particular (d) lists seven companies and fifteen individuals (document behind tag 6 JK in the first and second defendants' pleadings and particulars bundle). · Paragraph 2.5 and particulars thereto (page 17) - the document identified at particular (a) involves correspondence between two additional individuals representing the former Wills companies and the Philip Morris companies (document behind tab 6 JK of the first and second defendants' pleadings and particulars bundle). · Moreover, paragraph 2.5 recites the incorporation of the Tobacco Institute of Australia Limited and that company and persons involved in the TIA's activities over a twenty year period potentially could have been included in the proceedings. · Paragraphs 2.26 - 2.41 (pages 44 - 48) - these paragraphs recite the involvement of the defendants and the companies represented by the defendants in the contravening conduct of the various defendants extending to include individuals in accordance with the definition contained in Note (i). 36 The above submission seems to me to be misconceived. The mechanism provided by Pt 8 r 13 of the SCR is one that allows for the representation of numerous plaintiffs, or numerous defendants, so as to avoid the practical inconvenience that may flow from having numerous parties to the proceedings. The plaintiff seeks to have each of the Philip Morris defendants, the Wills defendants, the Rothmans defendants and ITA represent a relatively small number of overseas companies. In total the number of overseas companies that the plaintiff seeks to have the defendants represent is not numerous. There is no reason why they could not be conveniently joined to the proceedings should the plaintiff wish to do so.

[44]

38 A central challenge that the defendants make to the pleading is that it asserts broad and wide ranging allegations that are unconnected to the case that the plaintiff makes arising out of her own circumstances. This criticism is encapsulated in the written submissions filed on behalf of the Philip Morris defendants (at paragraph [14]): "The fifty-three pages of the pleading advance an amorphous mass of wide ranging allegations. That the pleading is accurately described as amorphous is exposed by one reading of the document. Many of the paragraphs of the pleading include vague, argumentative and rhetorical allegations that are, in turn, headed by vague, argumentative and rhetorical headings. The numbering of the paragraphs of the pleading does not assist in disclosing any logical structure to the statement of claim. To the extent that the pleading makes any allegations concerning the plaintiff, those allegations are swamped in wide ranging allegations concerning conspiracies, involvement in breaches of the TPA (and ' the equivalent provisions' ) and the ' conduct ' - all or most of which can have no connection with the plaintiff." 39 Section 52(1) of the TPA provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 51AA provides that a corporation shall not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States or Territories. Relevantly, s 51AA does not apply to conduct that is prohibited by s 51AB. Section 51AB provides that a corporation shall not, in trade or commerce, in connection with the supply or possible supply of goods to a person, engage in conduct that is, in all the circumstances, unconscionable. 40 The plaintiff claims relief pursuant to s 80 and s 87(1) of the TPA and the equivalent provisions of the FTA. Section 80(1) of the TPA permits the court to grant an injunction to restrain conduct, or threatened conduct, that contravenes Pt IVA or Pt V. The court may make such an order on the application of the Australian Competition and Consumer Commission or any other person. In Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] HCA 11; 74 ALJR 604, Gleeson CJ and McHugh J observed: "[13] It has been established for more than twenty years that s 80 means what it says. In Phelps v Western Mining Corporation Ltd ((1978) 33 FLR 327) the Full Court of the Federal Court rejected an argument that the words 'any other person' in s 80 should be read down as meaning that only persons who are affected by a contravention of Pt V could seek relief under s 80. … [17] As Bowen CJ observed in Phelps v Western Mining Corporation Ltd (at 330 - 331), the purpose of s 52 is to protect the public from being misled or deceived. An application for injunctive relief under s 80 is, in its nature, one for the protection of the public interest. The same may be said of s 163A. Any public protection of the applicant's own business or other interests is incidental or collateral. What is sought to be established by the determination of a court is a violation by the respondent of a statutory norm of conduct, and the existence of a duty or liability."

[47]

43 The proceedings in Nixon were brought pursuant to Pt IVA of the Federal Court of Australia Act 1976 (Cth) (the FCA). The relief sought by the applicants included relief under the general law and the TPA. The applicants in Nixon did not plead a case based on the collective conduct of all the defendants. The pleading was found to have failed to comply with the terms of s 33C(1)(a) of the FCA, which requires as a condition of the commencement of representative proceedings pursuant to Pt IVA, that the group members have claims against the same person. In Nixon the statement of claim was found to be so seriously defective, and the case advanced by the applicants so untenable, that the pleading was struck out and leave to replead as a representative proceeding was refused by a majority of the Full Court. 44 In Nixon Spender J and Hill J were of the opinion that the applicants should not be afforded a further opportunity to replead their application as a representative proceeding. Spender J in Nixon observed at [4]: "The 'Broad Canvas' case that the applicants wish to allege is one that relies on 'collective conduct' of all respondents as being a cause of each applicant and class member failing to cease smoking after 1 October 1974. While the term 'collective conduct' is disarmingly seductive, on analysis, in the context of causation, it has to involve one of two assertions: either every piece of persuasion, every lobbying effort and every statement was part of a single campaign to which each of the six respondent companies was a party, and moreover, that campaign was causative of each class member's loss or damage; or alternatively those particular parts of the claimed 'collective conduct' which influenced any particular applicant or group member (while the conduct of only one or more of the respondent companies) was conduct for which each of the other respondent companies shared causal responsibility, because, for example, those companies were party to a giant joint plan with the other companies, or aided or abetted or were knowingly concerned in the conduct of that company or those companies which was or were engaged, as principal or principals, in the particular influencing conduct. [5] As to the first alternative, it simply cannot be that all of the conduct of all of the respondents (since either 1960 or 1974) was a cause of each applicant and each group member's failure to cease smoking: such a case is so manifestly untenable as to fall within O 20 r 2 and O 11 r 16 of the Federal Court Rules . [6] As to the second alternative, being the assertion that some part of the alleged campaign of deceit and misinformation, in which each of the respondents is said to have been involved, had a causal effect on the decision by each applicant and group member to fail to cease smoking after 1 October 1974, the questions posed by Sackville J in [158] of his reasons (while asked in a difficult (sic: different) context) are highly material on whether leave to replead a represented proceedings should be granted. There his Honour asks: 'Would it be possible to particularise such a case in a manner that makes it clear how class members are said to have been influenced by advertisements or public statements they may never have seen? Is it feasible to contemplate continuing representative proceedings when the smoking history of and factors influencing members of the represented class are likely to vary so substantially?' 45 Mr Francey submitted that in these proceedings the plaintiff has pleaded the broad canvas case and that to this extent the criticisms of the statement of claim in the Nixon proceedings are not relevant. In Nixon Sackville J was critical of the statement of claim in a number of respects that were independent of its deficiencies in pleading a group proceeding. It will be necessary to return to these criticisms in due course.

[49]

47 The plaintiff seeks to make a case that each of the defendants is liable for the conduct of each of the other defendants by reason of the fact that each conspired with the others to contravene both s 52 and the unconscionability provisions of the TPA (and the equivalent provisions of the FTA). To this end the plaintiff relies on s 75B of the TPA which provides: "75B(1) A reference in this Part to a person involved in a contravention of a provision of Part IV, IVA, IVB, V or VC, or of section 75AU or 75AYA, shall be read as a reference to a person who: (a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by threats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention." 48 Section 75B was inserted into the TPA by the Trade Practices Amendment Act 1977 which commenced on 1 July 1977. In the course of oral argument Mr Francey acknowledged that in the way the claim is pleaded the plaintiff depends upon the provisions of s 75B. He sought to confine her claim to one arising from 1 July 1977 (T 181). He submitted that the use of the expression the "relevant period" to embrace the period from January 1960 to the date of the claim remains appropriate since it is the plaintiff's case that the defendants engaged in misleading conduct of the type described in paragraph 2.16 from a time prior to the enactment of the TPA, in some instances dating back to 1960. This forms part of the factual material upon which the plaintiff relies notwithstanding that the conduct was not unlawful prior to the enactment of the TPA and that the defendants' joint liability for it does not arise prior to 1 July 1977. 49 The complaint that the defendants make, and that was not addressed by Mr Francey, is that no facts or insufficient facts are pleaded to explain the basis upon which the case is put against each defendant dating back to January 1960. Broadly put, her case is one of collective conduct on the part of the defendants to promote a false medical controversy concerning the health risks associated with smoking. The first material fact pleaded in this respect is the agreement of the first six defendants made in January 1975. Schedule "C" contains summaries of statements attributable to the Philip Morris, Wills and Rothmans defendants that date back to 1962. These are particulars of the allegation of conduct relating to the making of public statements contained in paragraph 2.16(C). It is not clear how prior to January 1975, when the plaintiff pleads the agreement between the first six defendants to engage in conduct that was misleading or deceptive, or likely to mislead or deceive (paragraph 2.3), the plaintiff relies on statements made by one or more defendants in the case she brings against all defendants.

[57]

The defendants submit that paragraph 2.3 pleads a conclusion and not a material fact. The assertion that the defendants engaged in conduct that was misleading or deceptive or likely to mislead or deceive "in the manner set out in the statement of claim" is challenged as imprecise. Finally, the particulars are said to not support the allegation. The reactivation of a committee with a set of anodyne objectives of the character of those set out in subparagraphs (i) - (iii) is said to hardly be a particular of an allegation of a conspiracy to engage in misleading and deceptive conduct. 57 The plaintiff does not plead a cause of action in conspiracy at common law. Her cause of action is confined to claims brought under the TPA and/or the FTA equivalent provisions. As I understand Mr Francey's submission, the material fact pleaded in paragraph 2.3 is the agreement of the Philip Morris, Wills and Rothmans defendants. The characterisation of the agreement as being, "to engage in conduct that was misleading or deceptive or likely to mislead or deceive in the manner set out in this statement of claim" is not well expressed. However, when read in the context of the statement of claim as a whole I consider that it is clear that the agreement alleged is an agreement to engage in the conduct that is described in paragraph 2.16, that conduct being alleged to have the quality of being misleading or deceptive, or likely to mislead or deceive, in the manner identified in paragraph 2.19. For the reasons earlier given the opening words, "During the relevant period and particularly" will be struck out, however, I do not propose to strike out the balance of the paragraph. The heading "The Australian Conspiracy" is unnecessary and has a tendency to cause prejudice and embarrassment and will be struck out. 58 I consider that the particulars of paragraph 2.3 are capable of supporting the allegation of the agreement upon which the plaintiff relies. It will be necessary for the plaintiff to deliver further and better particulars of this allegation in due course. The pleading of an internet address as a particular of the allegation in paragraph 2.3 was the subject of complaint. The mere recital of an internet address without more is embarrassing. As I understand Mr Francey's submission the effect of the document is set out in (a)(i), (ii) and (iii).

[66]

69 As I have noted, the plaintiff's claim is reliant on s 75B of the TPA (and the FTA equivalent provision). In Yorke v Lucas (1985) 158 CLR 661 the High Court considered the elements of accessorial liability under s 75B of the TPA. In that case it was alleged that the respondent's liability in respect of contraventions of s 52 of the TPA arose pursuant to s 75B(a) and (c). It was held that to fall within (a) it was necessary to establish that the person intentionally aided, abetted, counselled or procured the contravention. In order to form the requisite intent the person must have knowledge of the essential matters which go to making the contravention. Equally, before a person may be liable to a contravention as a party to it, for the purposes of s 75B(c), it is necessary to establish that the person was an intentional participant. The necessary intent, again, is based upon knowledge of the essential elements of the contravention. Significant to the reasoning in the joint judgment in Yorke was the circumstance that, while s 75B is an adjunct to the imposition of civil liability, it is derived from concepts found in the criminal law. There was no indication that when introduced into the TPA these concepts should be given some new or special meaning. Their Honours referred to Giorgianni v The Queen (1985) 156 CLR 473 noting that, for the purposes of the criminal law, secondary participation in the commission of an offence requires intent based upon knowledge notwithstanding that the offence is one of strict liability. 70 Mr Francey submitted that Yorke was concerned with the accessorial liability of persons under s 75B(a) and (c). The case the plaintiff brings is one of conspiracy pursuant to s 75B (d). In oral submissions he postulated that a person who has entered into a conspiracy to engage in a false controversy over smoking and disease might not have actual knowledge of every act carried out in furtherance of the conspiracy by a co-conspirator and yet, nonetheless, remain liable in respect of the acts carried out in furtherance of the conspiracy. Accepting this submission for present purposes, it does not seem to me to answer the point that is taken. Paragraph 2.11 pleads constructive knowledge of the association between smoking and smoking related diseases or smoking and addiction (the matters pleaded in paragraphs 2.8 - 2.10). The agreement upon which the plaintiff relies is to engage in the conduct described in paragraph 2.16 being conduct that promoted the benefits and pleasures of smoking and denied or minimised the risks associated with it (including the risk of contracting smoking-related disease and of becoming addicted to smoking through the effect of nicotine). This conduct is alleged to have contravened the provisions of Pts IVA and V of the TPA because, inter alia, the defendants knew that there was reliable evidence causally linking cigarette smoking to increased the risk of contracting smoking-related disease and that nicotine was addictive. This is the false controversy to which Mr Francey referred. One cannot agree to promote a false controversy without knowledge of the matters that make it false. The pleading of constructive knowledge in paragraphs 2.11 and 2.12 is misconceived. The words in paragraph 2.11 "or one or more of them" and "(b) ought to have known" will be struck out. The words "or one or more of them" and "or ought to have known" wherever appearing in the particulars to paragraph 2.11 will be struck out. The words "or one or more of them" in paragraph 2.12 and paragraph 2.12(b) will be struck out as will the words "or one or more of them" and "or ought to have known" wherever appearing in the particulars to paragraph 2.12.

[97]

106 The pleading does not identify what features of the conduct particularised in the five elements set out in 2.16(A) to (E) involve representations as to a future matter or matters. Mr Francey submits that it is not necessary for the plaintiff to do so. It is his contention that it is sufficient to make clear in the statement of claim that the provisions of s 51A are to be relied upon. The identification of the representations as to future matters may be done by way of particulars in due course. In this way it is submitted the defendants will be put on notice of those matters in respect of which it is incumbent upon them to adduce evidence to the contrary if they seek to avoid the operation of the deeming provision. 107 In his written submissions Mr Francey relied upon the decision of French J in State of Western Australia v Bond Corporation Holdings Ltd & Ors (1991) ATPR ¶41-081 at 52,279: "In my opinion a party invoking the application of s 51A to a representation as to a future matter should make clear that is (sic: it is) doing so in that way the respondent will know that, if the representation was made, it has the burden of showing, and must plead, that it had reasonable grounds for making it. The duty of the applicant to make clear that it invokes s 51A is discharged if it pleads that the respondent did not have reasonable grounds for making the representation and that it was thereby misleading or deceptive. Alternatively, the applicant can plead the representation and say simply that it was misleading by virtue of s 51A. This approach is probably logically more consistent with the structure of the section." 108 I do not read the judgment in State of Western Australia v Bond as support for Mr Francey's contention that the present pleading is adequate with respect representations as to future matters. The representations the subject of the invocation of s 51A are not identified. The defendants are not on notice of the case made against them with respect to representations as to future matters. The balance of paragraph 2.19 after the words "or the FTA" will be struck out.

[178]

The following are struck out of the amended statement of claim: Note (d) The words "at all relevant times" wherever appearing Note (e) The words "the relevant period" wherever appearing Note (g) (v) Note (i) Note (h) Paragraphs 1.5 - 1.27 inclusive Paragraph 2.2 Paragraphs 2.34 - 2.41 inclusive "Companies represented by the defendants" in paragraphs 3.8, 3.9(c), The balance of paragraph 3.10 following the words "contravening conduct" The words "and the companies represented by the defendants in that conduct" in paragraph 3.11 The words "and companies represtented by the defendants" in paragraph 3.11(a), (h) and (i) The words "and companies represented by the defendants" in paragraph 3.12(c)(ii) and (iii) Schedules 1 - 4 inclusive The heading "The Australian Conspiracy" The words "during the relevant period and particularly" in paragraph 2.3 Paragraphs 2.4, 2.5 and 2.6 The words "or one or more of them" in paragraph 2.11 The words "(b) ought to have known" in paragraph 2.11 The words "or one or more of them" and "or ought to have known" wherever appearing in the particulars to paragraph 2.11 The words "or one or more of them" in paragraph 2.12 Paragraph 2.12(b) The words "or one or more of them" and "or ought to have known" wherever appearing in the particulars to paragraph 2.12 Paragraph 2.16(C)(b) The words "directly or indirectly" and "of the following kind" in paragraph 2.16(C) Paragraph 2.16(C)(j) Paragraph 2.16(C)(k) Paragraph 2.16(C)(l) Paragraph 2.16(C)(m) Paragraph 2.16(C)(n) Paragraph 2.16(C)(o) The words "conduct involving", "including" and "various" and "known to be effective" in paragraph 2.16(D) The words "remain silent about and/or" in paragraph 2.16(E) Paragraph 2.16(F) The references to statements attributable to the defendants prior to January 1975 in Schedule "C" The balance of paragraph 2.19 following the words "or the FTA" The word "specifically" wherever occurring in paragraph 2.19(A) - (E) Paragraph 2.19(C)(b), (j), (k), (l), (m), (n) and (o) The words "remained silent about and/or" in paragraph 2.19(E) Paragraph 2.19(F) The word "include" in particular (a) of paragraphs 2.20 Particular (b) of paragraph 2.20 Paragraph 2.23(d), (e) and (f) Paragraphs 2.26 - 2.33 Paragraphs 3.1 - 3.7 inclusive

Myriam Cauvin v Philip Morris Limited

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Judgment (179 paragraphs)

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