Tobacco Control Coalition Inc v Philip Morris (Australia) Ltd [2000] FCA 1404

FEDERAL COURT OF AUSTRALIA Tobacco Control Coalition Inc v Philip Morris (Australia) Ltd

[2000] FCA 1404

TOBACCO CONTROL COALITION INC v PHILIP MORRIS (AUSTRALIA) LTD and PHILIP MORRIS LTD, W D & H O WILLS HOLDINGS LTD and W D & H O WILLS (AUSTRALIA) LTD and ROTHMANS HOLDINGS LTD and ROTHMANS OF PALL MALL (AUSTRALIA) LTD N1089 of 1999

WILCOX J 14 SEPTEMBER 2000 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N1089 of 1999

BETWEEN: TOBACCO CONTROL COALITION INC

Applicant

AND: PHILIP MORRIS (AUSTRALIA) LTD and PHILIP MORRIS LTD

First Respondents

W D & H O WILLS HOLDINGS LTD and

W D & H O WILLS (AUSTRALIA) LTD

Second Respondents

AND

ROTHMANS HOLDINGS LTD and ROTHMANS OF PALL MALL (AUSTRALIA) LTD

Third Respondents JUDGE: WILCOX J

DATE OF ORDER: 14 SEPTEMBER 2000

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. Order 2 made on 27 July 2000 be varied so as to substitute for the date "30 September 2000" the date "15 December 2000". 2. The costs of the motion for variation be reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N1089 of 1999

BETWEEN: TOBACCO CONTROL COALITION INC

Applicant

AND: PHILIP MORRIS (AUSTRALIA) LTD and PHILIP MORRIS LTD

First Respondents

W D & H O WILLS HOLDINGS LTD and

W D & H O WILLS (AUSTRALIA) LTD

Second Respondents

AND

ROTHMANS HOLDINGS LTD and ROTHMANS OF PALL MALL (AUSTRALIA) LTD

Third Respondents

JUDGE: WILCOX J

DATE: 14 SEPTEMBER 2000

PLACE: SYDNEY

EXTEMPORE REASONS FOR JUDGMENT 1 WILCOX J: On 27 July 2000, I made orders in respect of applications for the provision of security for costs. I ordered that, on or before 30 September 2000, the applicant, Tobacco Control Coalition Inc, provide security in the sum of $100,000 in respect of costs of each of the three sets of respondents. I did that by order 2. By order 3, I provided that, in the event of default by the applicant in providing security in accordance with order 2 to any particular set of respondents, subject to any contrary order of a judge of the Court, the proceeding stand dismissed with costs against those respondents. By order 4, I granted liberty to apply in relation to orders 2 and 3 on three days' notice. 2 The applicant has taken advantage of the liberty to apply reserved by order 4 and has made an application, by notice of motion filed on 12 September 2000, for an extension of time for the provision of security for costs, by substituting for the date "30 September 2000" the date "31 December 2000". The application is supported by an affidavit of Andrew Graham Penman, the chief executive officer of the applicant. Dr Penman deposes to contacts that he has made, with numerous organisations, in relation to the possibility of obtaining funding for the litigation. The affidavit does not state he has received any positive response to his applications; it would appear he is still awaiting responses to the applications for assistance he has made. 3 At the time of the hearing of the application for security for costs, the applicant was not represented by solicitors. The circumstances giving rise to that situation were recounted in my reasons for judgment of 27 July 2000 and need not be repeated. On 5 September 2000 a notice of change of solicitor was filed, bringing onto the record the firm of Turner Freeman as solicitors for the applicant. They briefed Mr J.W. Shaw QC and Mr A. Searle to appear on behalf of the applicant today. 4 Mr Shaw informed me, in response to a question which I asked at the commencement of his submissions, that the applicant accepted the criticisms I had made of the form of the application and the Statement of Claim. The applicant accepted the need for what Mr Shaw referred to as "radical surgery" to the pleadings. Whether or not the action can be rendered viable, in a legal sense, by radical surgery is a matter about which I do not propose to express any opinion at this stage. However, I accept Mr Shaw's statement that the applicant's new legal advisers, led by him, will give attention to the form of the pleadings and endeavour to overcome the significant deficiencies to which I pointed on 27 July. 5 Mr Shaw submits that the Court should take a "benign view" in respect of the application for extension of time. He has referred to authorities which support that approach. He also submits there would be no prejudice to the respondents if the application were granted. 6 In response to these submissions, various propositions were put by counsel for the respondents. Mr J L Sher QC, who appears with Mr S. O'Meara for the first respondent, points out, accurately, that there is no evidence to suggest there is a likelihood that the money will be obtained. He argues from that fact that there is no basis for extending the time. He says that, if anybody was interested in assisting the applicant financially, that person would already have said so. He also suggests that anybody who was interested in assisting the applicant's case would be better off bringing or financing a fresh action. 7 Mr M. Dicker of counsel, who appears for the second respondent, expressly concedes there is no doubt about the power of the Court to grant the application for extension of time. He points out, quite accurately, that the matter of security for costs was first mentioned in December 1999 and the security application was heard in February. He criticises the fact that little or nothing was done to raise security moneys between those dates and the present time. Mr Dicker also submits that the time sought by the applicant is far too long. He says that, if there is a need for some additional time to cover the absence of Dr Penman and others at an international conference during August and/or to take account of the distraction of the Sydney population with the Olympic Games, then it is appropriate merely to extend the time for about two weeks until, say, mid October. 8 Mr P H Greenwood SC, for the third respondent, refers to Dr Penman's letters seeking support. He suggests that Dr Penman has put a rosy picture before people to whom he has made application for assistance and has not averted to the problems in this case and, what Mr Greenwood sees as relevant, the fate of the litigation known as Nixon v Philip Morris, referred to in my judgment of 27 July. 9 I have reached the conclusion that I should extend the time for providing security, but not until 31 December. It is important that the matter of security be resolved before the end of the law year. I accordingly propose to extend the time until Friday, 15 December. From a practical point of view, that makes not a lot of difference; but this will enable the matter of security to be resolved before the end of the year. I do not want a situation arising where there are complications over the Christmas period, when the Registry will be on skeleton operation. 10 The reasons why I propose to extend time may be briefly stated. First, 30 September was a fairly arbitrary date; it seemed to me that about two months was appropriate. That is why I took 30 September. As counsel suggested, I was aware that the last couple of weeks of that time would be a period when many people would be involved with Olympic Games activities. In selecting the date, I say quite frankly that I thought it was highly unlikely that any further action would be taken. I thought the date would probably come and go, the self executing order would take effect and that would be the end of the matter. At that time there were no solicitors advising the applicant and there seemed to be no real activity by the applicant towards either raising any money or prosecuting the case. That situation has changed significantly in the last few weeks. 11 Solicitors are now involved, they are experienced litigation solicitors and I imagine they have not come into the case without careful consideration. They have briefed counsel, including a senior counsel who is prepared to become involved with the case. Dr Penman has made approaches to many people. Clearly, he has been very busy. He has not yet received a positive response but this does not surprise me. It would be expected it would take some time for any potential sponsor to make a decision, having regard to the necessity to investigate the merits of the claim. The potential sponsor might wish to obtain its own legal advice. 12 The critical matter, in my opinion, is that there is here no suggestion of prejudice to the respondents. Mr Shaw put the proposition in his opening submission that there was no question of prejudice; no respondent's counsel has suggested otherwise. I see, myself, no reason for imputing prejudice except the general point, as Mr Shaw acknowledges, that an extension of time means the case is not finally disposed of so soon. However, it is difficult to see this has any practical significance. If there was here a question of prejudice, the situation might well be quite different; but I see none and none is suggested. 13 I do not know whether an extension of time will be useful, so far as the applicant is concerned. It may be that, when December comes, the applicant is no further advanced in obtaining security. It may also be that the amount that is obtained, although perhaps sufficient to meet the present order, would not be sufficient to cover future costs. The applicant will have to give thought to that matter. The respondents have already foreshadowed applications for further security, if the case goes ahead. The applicant will have to form its own judgment about those matters. However, I am prepared to give the applicant a chance to put its house in order. As I said in my earlier judgment, the case raises issues of public importance. It is clear the applicant is taking its action under a feeling of public obligation, rather than for private interest motives. I think it is appropriate to take those matters into account in deciding whether there should be a further chance to obtain the security. 14 I vary order 2, made on 27 July 2000, so as to substitute for the date "30 September 2000", the date "15 December 2000". I reserve the costs of this motion. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.