Philip Morris (Australia) Ltd & Ors v. Nixon & Ors
This was a representative action against 6 tobacco companies on behalf of a group of smokers, all of whom had allegedly contracted a smoking-related disease. The applicants alleged that the members of the representative action had started and continued to smoke due to the conduct of the tobacco companies. Among other things, they alleged that the companies had marketed cigarettes as enhancing life; marketed some cigarettes as healthy or healthier than others; cast doubt about the link between smoking and health risks; and failed to warn or adequately warn about the health risks of smoking. The applicants claimed this conduct was misleading or deceptive in contravention of the Trade Practices Act 1974 and/or constituted common law negligence.
The respondent companies had brought a number of applications seeking to strike out the applicants' statement of claim, as a result of which the applicants had amended their pleading several times. This was an appeal by the respondent companies against the decision of a lower Court to allow the applicants to file a further amended statement of claim (see Nixon v Philip Morris (Australia) Ltd (1999) 165 ALR 515).
The Court found that the applicants' claim remained fundamentally flawed. In particular, the Court found that it was inappropriate for the case to proceed as a representative proceeding pursuant to Part IVA of the Federal Court of Australia Act; among other things, because it would be near impossible to determine which aspects of which respondent's conduct influenced which group member and to what degree. The possible combinations of factual circumstances were "near limitless". Therefore, it was not clear that the claims of the group members were in respect of, or arising out of, the same, similar or related circumstances as required for a representative proceeding. Indeed, it was not clear that there were any questions of law or fact common to all claims.
The Court ordered that the proceedings no longer continue as representative proceedings, but gave leave to each member of the group to file a statement of claim on an individual basis.
The applicants sought special leave to appeal this decision in the High Court of Australia, but were refused. See: Nixon v Philip Morris (Australia) Ltd & Ors  HCATRans 368 (21 June 2000).