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 [2000] HCATRans 368 (21 June 2000).

Philip Morris (Australia) Ltd v Nixon [2000] FCA 229; (2000) 170 ALR 487

  • Australia
  • Mar 13, 2000
  • Federal Court of Australia, New South Wales Registry
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Parties

Plaintiff

  • Philip Morris (Australia) Ltd
  • Philip Morris Ltd
  • Rothmans Holdings Ltd
  • Rothmans of Pall Mall (Australia) Ltd
  • WD & HO Wills (Australia) Ltd
  • WD & HO Wills Holdings Ltd

Defendant

  • Alex Talay
  • Gregory Durkin
  • Michael Christopher Nixon
  • Robert Milne
  • Sandra Shepherd
  • Victor Bruce Williams

Legislation Cited

Acts Interpretation Act 1901

Federal Court of Australia Act 1976

Federal Court of Australia Amendment Act 1991

Jurisdiction of Courts (Cross-Vesting) Act 1987

Trade Practices Act 1974

Related Documents

Type of Litigation

Tobacco Control Topics

Substantive Issues

Type of Tobacco Product

None

"The primary Judge in the present proceedings took the view that, in determining whether claims are related, attention should be directed to matters of commonality rather than difference. He acknowledged that there were differences among the claims in the proceedings, but took the view that if the allegations of breach of s 52 of the TP Act or of a duty of care succeeded, the causes of all applicants and group members would be advanced. Equally, if the allegations failed, all claims would fail. The difficulty with this analysis is that it overlooks the range and scope of the allegations that the respondents had each contravened s 52 of the TP Act and breached a duty of care owed to each of the applicants and group members. This is not a case where the only major differences in the pleaded claims relate to reliance and damage. The allegations made against each of the respondents concern diverse conduct over a period of nearly forty years. As the Rothmans submissions point out: - pars 14(A) and 14(B) of the statement of claim allege advertising, marketing and promotion by each of the three sets of respondents over a thirty-nine year period in respect of a total of 182 different brands of cigarettes; - pars 14(C) and 14(D) of the statement of claim allege public statements and lobbying by each of the respondents over the same period, of which some 77 separate items have been particularised in Schedules C and D; and - par 15 alleges that class members were influenced directly or indirectly by “the conduct” without attempting to identify which part or parts of the conduct of the several respondents influenced particular group members or sub-classes of group members (or, for that matter, other people who, in turn, are said to have influenced the applicants or the group members)."
"The first consequence of these flaws is that, in my opinion, the statement of claim does not establish that the requirements of s 33C(1)(a) of the Federal Court Act have been met. As I have explained, the applicants do not plead a case based on the collective conduct of all three respondents. What is alleged, in essence, is that each of the respondents, over a period of twenty-five years or more, engaged separately in misleading or deceptive conduct. Each group member is said to have been influenced to smoke, continue smoking or fail to quit smoking by the conduct of one or other of the respondents. This does not constitute the pleading of a claim by all applicants and group members against all respondents, as s 33C(1)(a) requires. Rather, the statement of claim pleads that some applicants and group members have claims against one respondent, while others have claims against the other individual respondents. The statement of claim also alleges negligence on the part of the respondents over a period of some forty years."