(3) It was a separate and severable consideration payable by retailers to Mobil.
51 The facts adduced at trial may or may not make good those contentions. If they are made good then, prima facie, this aspect of the plaintiffs' case will be made out. If they are not made good then, prima facie, this aspect of the plaintiffs' case (and, indeed, the whole of the case) will fail. But whether this aspect of the case succeeds or fails depends not on the matters summarised in the statement of contentions but on the evidence that is adduced relating to the issue thus propounded. As with the limitation argument, I think, a determination of the underlying question is one to be made after the relevant evidence has been led and tested.
52 Accordingly, I would not order summary dismissal, or a stay, on this ground.
Trafficking in litigation
53 Mobil made a formal submission "that the judgment of the Court of Appeal in Fostif … was in error in relation to the issues of the approach to champerty, the doctrine of abuse of process, and the approach to be taken to Pt 8 r 13 of the Supreme Court Rules" and "that the approach taken by the trial judge in that matter … is to be preferred" (written submissions dated 21 June 2005, para 64). It submitted further that, even accepting what the Court of Appeal had said, there were still arguments open to it. Some of those arguments relate to the alternative formulation of its abuse of process argument - the fourth issue identified in para [4] above; and I shall consider them in that context. Others, however, related to the alleged trafficking in litigation.
54 Mason P in Fostif held at para [122] that the funder's "lack of independent interest in the proceedings and the profit motive driving [its] endeavours … do not establish champerty in the modern law, let alone abuse of process arming the respondents with a right to stay viable proceedings". At para [123], his Honour considered "the elusive notion of 'trafficking'.". He said that it appeared "to involve the funder taking some rule akin to that of an assignee in relation to claims that are incapable of assignment because they are bare causes of action for damages." He contrasted that with the present cause of action, saying that "[b]y contrast, the retailers' causes of action are for money had and received, historically a claim in debt. Debts are readily assignable, even to those who hope to recover more than they pay the assignor, without apparently engaging the principles about trafficking."
55 Although his Honour said that those views were "necessarily tentative", I think that I should take them as resolving the issue before me, and leave it to Mobil (should it wish to do so) to seek to persuade the Court of Appeal that his Honour's tentative views were incorrect.
56 In this context, I note that Mason P in Fostif at para [132] stated that "the court's basal inquiry should be whether the role of the particular funder has corrupted or is likely to corrupt the process of the court to a degree that attracts the extraordinary jurisdiction to dismiss or stay permanently for abuse of process." His Honour said that "[t]he standard of proof is high where (as here) the plaintiff has a genuine and viable cause of action." It follows, his Honour said, that the court would "lean in favour of moulding its remedy so as to eliminate the abuse, resorting to dismissal only as a last resort where this is impossible."
57 Mobil submitted "that this is too restrictive an approach, at least in circumstances where Federal jurisdiction is being exercised" (written submissions dated 21 June 2005, para 83). It submitted that this was a case within Federal jurisdiction; and that, in any event, the restrictive approach was satisfied.
58 Mobil's submissions on this point extended beyond trafficking in litigation to what it called "officiously stirring up conflicts". It submitted that those matters "are inconsistent with the due exercise of the judicial power of the Commonwealth in accordance with judicial process" (written submissions dated 21 June 2005, para 93). That was because the function of judicial power is "to quell controversies about rights, duties or liabilities which are susceptible to the application of judicial power". Thus, it submitted, it was oppressive for Firmstones to seek to engage Federal judicial power by stirring up controversy between retailers and Mobil.
59 In the light of the approach taken by Mason P in Fostif (and bearing in mind that Fostif was as much, or as little, a case within Federal jurisdiction as this case), I do not think that it is open to me to accept those submissions. I will therefore set out my findings on the facts relied upon by Mobil, and, as I have indicated, leave it to others to decide whether I am wrong in my conclusion that the point is settled by what Mason P said in Fostif.
60 It was agreed that neither Trendlen nor Firmstones had in their possession evidence of any demand made by Trendlen or any represented retailer on Mobil on or prior to 11 July 2003, relating to the payments that were the subject of these proceedings. It was further agreed that neither Trendlen nor any represented retailer had retained either Firmstones or Robert Richards and Associates (the solicitors on the record for Trendlen in these proceedings) prior to that date with respect to those claims.
61 Mr Firmstone (or his company - the distinction is of no present relevance) is behind the tobacco litigation. He initiated the tobacco cases, and then a number of petrol cases, of which this is one. He had no written authorisation from Trendlen before instituting these proceedings, but oral instructions had been given by Trendlen's principal, Mr Bradstreet, to Mr Proud, an employee of Firmstones. It is apparent that Mr Proud obtained some details from Mr Bradstreet of the way in which his company had dealt with Mobil, and ascertained that Trendlen did not have much (if anything) in the way of relevant documentation. Although Mobil criticised the instructions given by Mr Bradstreet to Mr Proud as "sparse", there is no reason to think that they were insufficient to enable Firmstones, having been given those instructions, properly to institute these proceedings on behalf of Trendlen as a representative action.
62 When these proceedings were instituted, Mr Firmstone himself had not spoken to anyone who might fall within the represented class, and it appears that the only retailer within the class that had given instructions to bring a claim was Trendlen. Against that background, it is not difficult to understand that, as Mr Firmstone frankly admitted, his dominant purpose in initiating the proceedings was his company's own profit (T 33.55); and that he was stirring up controversy where none existed (T 34.25), and using the Court's process for that purpose (T 34.30).
63 There was a dispute between the parties as to whether Mr Firmstone had control of the running of these proceedings. In reality, I think, he does. But it does not follow, and I do not find, that his degree of control is any way improper, let alone such as to lead to a real possibility that the Court's processes will be corrupted.
64 Firmstones enters into written agreements with each retailer who wishes to be represented. Those agreements set out clearly enough the rights that Firmstones has, as well as the benefits it will receive if the litigation is concluded successfully. Firmstones has retained Robert Richards and Associates in writing, whereby Mr Richards of that firm acts as the solicitor on the record for the plaintiffs (using this in the extended sense to encompass not only Trendlen but members of the represented class - or at least those who may "opt in"). As Mason P said in Fostif at para [137], "a measure of control is essential if the funder is to manage group litigation and also protect its own legitimate interests." In the present case, I do not think that the degree of control shown is improper, or more than is necessary and appropriate to enable Firmstones "to make the forensic decisions necessary to deal with determined and well-informed opponents" (ibid).
65 Mr Firmstone conceded that he sought to find the names of other retailers who had not evidenced any sign of controversy, so that he could obtain a profit (T 34.35), and that these proceedings will continue even if discovery or interrogatories is not ordered (T 34.40). It may be said, as to this latter point, that it is clearly in the interests of Trendlen and the more than 80 retailers who have so far opted in that the proceedings should continue.
66 Mobil submitted that in those circumstances there was no existing controversy between Mobil and the relevant retailers, and that the legal controversy was manufactured by Firmstones for its own profit. There is certainly no evidence of existing controversy, and I think the better view is that it is unlikely that there would have been any legal controversy apart from Mr Firmstone's actions. I think also that Mr Firmstone was not acting altruistically, and that he was motivated by a desire for profit. But even allowing for those matters, the reality is that if the litigation succeeds, it will succeed for the benefit of the plaintiffs (in the extended sense referred to above). Mr Firmstone has undertaken to meet the costs incurred, and to indemnify the plaintiffs against any adverse costs orders. There is no basis in the evidence for concluding that he or his company are unable to meet those undertakings. In the circumstances, and notwithstanding the very significant potential profit to Mr Firmstone, it cannot be said that the litigation has no potential benefit to others.
67 Thinking, as I do, that the approach that I should take to this issue is that indicated by Mason P in Fostif (notwithstanding its "tentative" character), I do not think that the facts as I have outlined them are sufficient to find that there is an abuse of process by reason of trafficking in litigation. I therefore conclude that the proceedings should not be struck out or stayed on this ground.
68 Mobil sought further factual findings in relation to Mr Firmstone's role and activities. I discuss those in the next section of these reasons.
Firmstones' conduct in these proceedings
69 I take the starting point from what Mason P said in Fostif at para [114]:
" … In my opinion, a conclusion about abuse of process must stem from a finding directed at the actual or likely conduct of the party in whose name the litigation is brought (or its agents). The court is not concerned with balancing the interests of the funder and its clients. Indeed, it is not concerned with the arrangements, fiduciary or otherwise, between the plaintiff and the funder except so far as they have corrupted or have a tendency to corrupt the process of the court in the particular litigation. It is only when they have that quality that the defendant has standing to complain about them … ".
70 At para [115], Mason P commented that representative proceedings, as well as ordinary proceedings, might be funded; and that where representative proceedings were funded, "the court has power to enquire into and mould orders and conditions protective of the arrangements with the funder". In that context, his Honour suggested, "matters additional to concerns for the processes of the court may be taken into account"; but that it was "an elision for these matters to intrude into an abuse of process enquiry."
71 Having considered at para [117] the possibility that arrangements between funder and party might be "harsh and exploitative", and at paras [116] and [118] the possibility that the funder might be tempted to stray from the paths of rectitude by reason of a large success fee, his Honour said at para [119] that "it is simply no business of a defendant to be taking up the cudgels on behalf of the funded litigants who are either parties or representative persons, invoking interlocutory processes ostensibly on behalf of the funded litigants but in reality in its own interest."
72 At para [126], his Honour pointed out that the court had power "for ensuring that matters proceed fairly as regards all members of the group, that its processes are not abused and that the risk of abuse is minimised". At para [137], his Honour indicated concern at "judicial paternalism" in relation to conflicts of interest between the funder and the class.
73 The concept of abuse of process involves the institution of proceedings for an improper purpose (Jago v The District Court of New South Wales (1989) 168 CLR 23, 71 (Toohey J)), or for a purpose that, in the eye of the law, the court's processes are not intended to serve (Jago at 47 (Brennan J)). As Mason CJ and Deane and Dawson JJ said in Walton v Gardiner (1993) 177 CLR 378 at 393, the concept of abuse of process extends to cases "in which the processes and procedures of the Court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness". In the same case, Brennan J at 410 spoke of the invocation of "the jurisdiction vested in a court or tribunal for a purpose alien to that which its exercise is intended to serve" as amounting to an abuse of process.
74 Thus, as Mason CJ, Deane and Dawson JJ said in Walton at 393, and as Brennan J said in the same case at 411-412, there will be an abuse of process where the proceedings are "foredoomed to fail" or "will inevitably and manifestly fail"; or where they duplicate proceedings already determined (even though no estoppel may arise). The joint judgment added the instance of proceedings instituted in a court in circumstances where, although the court has jurisdiction in the technical sense, it is a clearly inappropriate forum. And Brennan J instanced proceedings that duplicate others already pending.
75 Both the concept and the examples focus attention on two things. One is the purpose for which proceedings are instituted. The other is the impact of those proceedings on the person against whom they are brought. In the present case, I think that the judgment in Fostif clearly establishes that no improper purpose exists simply because the person who is responsible for bringing the proceedings (even though not a party) will stand to make a profit if they succeed. One purpose of the proceedings - even if not, in Mr Firmstone's mind the dominant one - is to produce an outcome beneficial to the plaintiffs (in the extended sense). Thus, I think, a consideration of the purpose for which these proceedings are brought does not of itself indicate that they are an abuse of process.
76 Nor do I think that the proceedings are oppressive, so as to amount to abuse of process, simply because of their impact on Mobil. On Trendlen's case, Mobil has received money to which in justice and equity it is not entitled. The case cannot be dismissed as hopeless; indeed, if the analogy with Roxborough holds up, it is likely to succeed. The proceedings can only be oppressive to Mobil in the sense that any proceedings brought against any wrongdoer, for civil rectification of or recompense for the wrong, are oppressive. I do not think that the law goes so far as to recognise that it is oppressive to call upon a wrongdoer to rectify a wrong. Nor do I think, in the circumstances of this case, that it can be oppressive for Mobil to be called to account for its retention of the money in question.
77 To the extent that it may be appropriate to consider both aspects together, I do not think that, combined, they are to be characterised as an indicator of abuse of process. The whole, in this respect, is no more than the sum of its parts.
78 Thus, on general grounds, I do not think that the manner of institution or form of the proceedings, including in that Firmstones' role as instigator, often sells lead to oppression.
79 I turn now to consider a particular complaint relating to one aspect of Firmstones' conduct.
Firmstones' settlement offer
80 This complaint relates to a settlement offer made by Firmstones to Mobil. That offer was made after the decision of Einstein J in the tobacco litigation, and before the Court of Appeal allowed the appeal from his Honour's decision. There was a controversy between the parties as to whether evidence of that offer was admissible (Evidence Act 1995, s 131) and as to whether Mr Firmstone could be cross-examined on it. With the concurrence of the parties, I admitted both evidence of the settlement offer and Mr Firmstone's cross-examination of it on the voir dire, and indicated that I would rule on the question of admissibility in these reasons. Before I turn to that controversy, I will indicate (if it is not apparent from what I have said already) that, but for it, there is nothing in this case that would warrant any different conclusion to that indicated, on the equivalent arguments, by the Court of Appeal in Fostif.
81 Mobil submitted that evidence of the offer, and Mr Firmstone's cross-examination in relation to it, should be admitted pursuant to s 131(2)(k) of the Evidence Act, by which the "without prejudice" privilege established by s 131(1) does not apply to, relevantly, a document prepared in furtherance of a deliberate abuse of a power. By s 131(6), the "power" referred to is one conferred by or under an Australian law. Santow J has held, in relation to the equivalent proviso relating to client legal privilege (s 125(1)(b)), that the bringing of legal proceedings is the exercise of a power conferred by or under an Australian law: Kang v Kwan [2001] NSWSC 698 at para [37 (12)]. Thus, his Honour said in the same sub paragraph, "a dishonest communication to the Court, in furtherance of a purpose standing outside the (legitimate) scope of the relevant legal process so as to amount to an abuse of process, would invoke s 125(1)(b)" because it would be "a deliberate abuse of a power".
82 In the present case, the relevant communication - Mr Firmstone's settlement offer - was not made to the Court. It therefore falls outside the category recognised by Santow J in Kang. But I do not think that his Honour intended to lay down an exhaustive definition of this aspect of abuse of power (ie, bringing or defending proceedings in abuse of the process of the Court). Nonetheless, in the present case, if the proviso is to be invoked, two things must be demonstrated: