Neville Albert Marston & Anor v Statewide Independent Wholesalers Ltd; Ekaton Corporation Pty Ltd v Shahin Enterprises Pty Ltd; William Edwin Hall & Anor v British American Tobacco Australia Services Ltd; Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd, Joanne Margaret Gow & 2 Ors v Stuart Alexander & Co Pty Ltd, Garry George Adams & Anor v Philip Morris Limited, Arrilla Pty Ltd v ACN 001 259 301 Pty Ltd formerly Australian Independent Wholesalers Pty Ltd; Dale Leslie Berney v Australian Liquor Marketers Pty Ltd; Whelan & Hawking Pty Ltd v IGA Distribution (Vic) Pty Ltd; Sydney Richard Veitch Murray & Anor v Queensland Independent Wholesalers Ltd; William Edwin Hall & Anor v British American Tobacco Australia Ltd; Paul Ashley Neindorf & Anor v IGA Distribution (SA) Ltd; Barry George Williamson & Anor v Composite Buyers Ltd; Joanne Margaret Gow & 4 Ors v IGA Distribution Pty Ltd; William Edwin Hall & Anor v Statewide Tobacco Services Ltd; Gary Leslie Grey & Anor v Philip Morris Limited [2003] NSWSC 816

New South Wales Supreme Court

CITATION : Neville Albert Marston & Anor v Statewide Independent Wholesalers Ltd; Ekaton Corporation Pty Ltd v Shahin Enterprises Pty Ltd; William Edwin Hall & Anor v British American Tobacco Australia Services Ltd; Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd, Joanne Margaret Gow & 2 Ors v Stuart Alexander & Co Pty Ltd, Garry George Adams & Anor v Philip Morris Limited, Arrilla Pty Ltd v ACN 001 259 301 Pty Ltd formerly Australian Independent Wholesalers Pty Ltd; Dale Leslie Berney v Australian Liquor Marketers Pty Ltd; Whelan & Hawking Pty Ltd v IGA Distribution (Vic) Pty Ltd; Sydney Richard Veitch Murray & Anor v Queensland Independent Wholesalers Ltd; William Edwin Hall & Anor v British American Tobacco Australia Ltd; Paul Ashley Neindorf & Anor v IGA Distribution (SA) Ltd; Barry George Williamson & Anor v Composite Buyers Ltd; Joanne Margaret Gow & 4 Ors v IGA Distribution Pty Ltd; William Edwin Hall & Anor v Statewide Tobacco Services Ltd; Gary Leslie Grey & Anor v Philip Morris Limited [2003] NSWSC 816 revised - 25/09/2003 HEARING DATE(S) : 03/09/03, 04/09/03, 05/09/03 JUDGMENT DATE : 11 September 2003

JURISDICTION: Equity Division Commercial List JUDGMENT OF : Einstein J DECISION : Litigation funding arrangement proposed by opt-in procedure held to be against public policy and to constitute an abuse of the Court's process. Application for directions permitting plaintiffs to send 'Opt In' notices to target retailers sought to be represented rejected. Short minutes of order to be brought in.

CATCHWORDS : Practice and procedure - Abuse of process - Maintenance and champerty - Approach to be taken to litigation funding - Third party funder with no interest in outcome other than repayment and profit from the litigation - Special factors disclose abuse of courts process - Representative proceedings - General principles-Whether persons whom plaintiffs purport to represent have the "same interest" in the proceedings - Power to substitute another plaintiff in the place of a named plaintiff who had given up rights of action by settling with tobacco wholesalers before commencing proceedings purporting to be representative proceedings - Discovery - Discovery for the purpose of ascertaining the identities of those falling within class sought to be represented - Power of Supreme Court to order discovery for this purpose - Plaintiff tobacco retailers suing defendant tobacco wholesalers in actions for moneys had and received to recover amounts paid from 1 July 1997 to 5 August 1997 following the decision of the High Court of Australia in Roxborough v Rothmans of Pall Mall Ltd (2001) 208 CLR 516 - Principle of law established in Roxborough - Proceedings purporting to be representative proceedings commenced on the day prior to being statute barred - Attempt by funder to obtain Court directions permitting service upon target opt-in group of notices inviting participation in proceedings upon the non-negotiable basis that funder to receive 33 1/3 percent on amounts recovered from retailers-Members of proposed target opt-in group unable to commence their own proceedings by reason of expiry of limitations period - Funder with monopoly over the means of access to recovery held to be trafficking in the retailers litigation Business Franchise Licences (Tobacco) Act 1987 (NSW) Business Franchise (Tobacco) Act 1974 (Vic) Business Franchise (Tobacco) Act 1975 (WA) Business Franchise (Tobacco and Petroleum Products) Act 1984 (ACT) Corporations Act 2001 (Cth) Credit Act 1984 (NSW) Criminal Law Consolidation Act 1935 (SA) Criminal Law Act 1967 (UK) Criminal Code Act 1899 (Qld) Freedom of Information Act 1989 (NSW) LEGISLATION CITED : Limitations of Actions (Recovery of Imposts) Act 1963 Legal Practitioners Act 1995 (Qld) Legal Profession Act 1987 (NSW) Limitation of Actions Act 1974 (Qld) Maintenance and Champerty Abolition Act 1993 (NSW) Maintenance, Champerty and Barratry Abolition Act 1993 (NSW) Supreme Court of Judicature (Consolidation) Act 1925 (UK) Supreme Court Act 1970 (NSW) Tobacco Business Franchise Licences Act 1980 (Tas) Tobacco Products (Licensing) Act 1988 (Qld) Tobacco Products Regulation Act 1997 (SA) Wrongs Act 1958 (Vic) A Firm of Solicitors, Re [1992] 1 All ER 353 AG Australia Holdings Limited v Burton [2002] NSWSC 170 Baltic Shipping Co v Dillon (1993) 176 CLR 344 Bank of America National Trust Association v Taylor [1992] 1 Lloyd's Rep 484 Benning v WIT Capital Group Inc (1 November 2001, Supreme Court of Delaware, Veasey CJ, Berger and Steele JJ) Buxton & Lysaught Pty Ltd v Buxton [1977] 1 NSWLR 285 Cameron v National Mutual Life Association of Australasia Limited (No.2) [1992] 1 Qd R 133 Cardale v Watkins (1820) 5 Madd 18 Carnie v Esanda Finance Corporation Ltd (1995) 182 CLR 398 Cauvin v Philip Morris Ltd [2002] NSWSC 528 Clyne v New South Wales Bar Association (1960) 104 CLR 186 Condliffe v Hislop [1996] 1 WLR 753 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Denist v Freethy (1890) 24 QB 519 DJE Constructions Pty Ltd v Maddocks [1982] 1 NSWLR 5 Duke of Bedford v Ellis [1901] AC 1 Eisen v Carlisle & Jacquelin 417 US 155 (1973) Eisen v Carlisle & Jacquelin 52 FRD 253 (1971) Elfic Ltd v Macks (2001) 181 ALR 1 Faryab v Smyth [1998] EWCA 3503 Fauteck v Montgomery Ward & Co Inc 91 FRD 393 (1980), Firmstones Pty Ltd v Davies [2003] FCA 113 Freehill Hollingdale & Page v Bandwill Pty Ltd [2000] WASCA 150 Giannarelli v Wraith (1988) 165 CLR 543 Giles v Thompson [1994] 1 AC 142 Grovewood Holdings plc v James Capel & Co Ltd [1995] Ch 80 Ha v New South Wales (1997) 189 CLR 465 Halliday v High Performance Personnel Pty Ltd (in liq) (Sacs Group Pty Ltd) (1993) 67 ALJR 678 Heimann v Commonwealth (1935) 54 CLR 126 Hill v Archbol [1968] 1 QB 686 Hooper v Kirella Pty Ltd (1999) 96 FCR 1 Irish Shipping Ltd v Commercial Union Assurance Co Plc [1991] 2 QB 206 James Nelson & Sons Ltd v Nelson Line (Liverpool) Ltd [1906] 2 KB 217 J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [1984] 2 Qd R 413 Kamm v California City Development Company 509 F 2d 205 (1975) Latec Finance Pty Ltd v Jury [1960] 77 WN (NSW) 674 CASES CITED : McFarlane v EE Caledonia Ltd (No 2) [1995] 1 WLR 366 McLean v Burns Philp Trustee Co Pty Ltd (1985) 2 NSWLR 623 Magic Menu Systems Pty Limited v AFA Facilitation Pty Limited (1997) 72 FCR 261 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021 Martell v Consett Iron Co Ltd [1955] Ch 363 Moon v Atherton [1972] 2 QB 435 Movitor Pty Ltd, Re (1996) 64 FCR 380 Murphy v Bar Association of New South Wales (2001) 49 ATR 48 Muschinski v Dodds (1985) 160 CLR 583 National Australia Bank Ltd v Idoport Pty Ltd [2000] NSWCA 8 New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 New South Wales Bar Association v Somosi (2001) 48 ATR 562 Newton v Merrill Lynch, Pierce, Fenner & Smith 259 F 3d 154 (2001) Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 Oppenheimer Fund Inc v Sanders 437 US 340 (1978) Orr v Diaper (1876) 4 Ch D 92 Price v Rhondda Urban District Council [1923] WN 228 R (Factortame Ltd) v Secretary of State for Environment, Transport and the Regions (No 2) [2002] 4 All ER 97 Roberts v National Detroit Corp 87 FRD 30 (1980) Rondel v Worsley [1969] 1 AC 191 Roux v Australian Broadcasting Commission [1992] 2 VR 577 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 Sayers v Merck SmithKline Beecham plc [2002] 1 WLR 2274 Shaw v Real Estate Board of Greater Vancouver (1973) 36 D L R (3d) 250 Smits v Roach (2002) 55 NSWLR 166 Thai Trading Co (a firm) v Taylor [1998] QB 781 Tosich Constructions Pty Ltd; Ex parte Wily, Re (1997) 143 ALR 18 Trendtex Trading Corporation v Credit Suisse [1982] AC 679 Trendtex Trading Corporation v Credit Suisse [1980] QB 629 Trepca Mines Limited (No 2), Re [1963] 1 Ch 199 Stocznia Gdanska SA v Latreefers Inc (No 2) [2000] All ER (D) 148 Wayne County Produce Co v Duffy-Mott Co Inc 155 NE 669 (1927) Weldon v Neal (1887) 19 QBD 394 Wild v Simpson [1919] 2 KB 544 William Felton & Co Pty Limited, Re (1998) 145 FLR 211 Wong v Silkfield Pty Ltd (1999) 199 CLR 255 Yaffee v Powers 454 F 2d 1362 (1972) Neville Albert Marston, Ekaton Corporation Pty Ltd, William Edwin Hall, Fostif Pty Ltd , Joanne Margaret Gow, Garry George Adams, Arrilla Pty Ltd, Dale Leslie Berney, Whelan & Hawking Pty Ltd, Sydney Richard Veitch Murray, William Edwin Hall, Paul Ashley Neindorf, Barry George Williamson, Joanne Margaret Gow, William Edwin Hall, Gary Leslie Grey (Plaintiffs) IGA Distribution Pty Ltd (Defendant 50014/03) Statewide Independent Wholesalers Ltd (Defendant 50069/03) Shahin Enterprises Pty Ltd (Defendant 50070/03) British American Tobacco Australia Services Ltd (Defendant 50071/03) Campbells Cash and Carry Pty Ltd (Defendant 50072/03) Stuart Alexander & Co Pty Ltd (Defendant 50073/03) Philip Morris Limited (Defendant 50074/03) PARTIES : ACN 001 259 301 Pty Ltd (Defendant 50076/03) Australian Liquor Marketers Pty Ltd (Defendant 50077/03) IGA Distribution (Vic) Pty Ltd (Defendant 50078/03) Queensland Independent Wholesalers Ltd (Defendant 50079/03) British American Tobacco Australia Ltd (Defendant 50080/03) IGA Distribution (SA) Ltd (Defendant 50081/03) Composite Buyers Ltd (Defendant 50082/03) IGA Distribution Pty Ltd (Defendant 50083/03) Statewide Tobacco Services Ltd (Defendant 50084/03) Philip Morris Limited (Defendant 50103/03) FILE NUMBER(S) : SC 50069/03; 50070/03; 50071/03; 50072/03; 50073/03; 50074/03; 50076/03; 50077/03; 50078/03; 50079/03; 50080/03; 50081/03; 50082/03; 50083/03; 50084/03; 50103/03 Mr S Gageler SC, Mr M Leeming, Mr R Dick (Plaintiffs) Mr I Jackman SC, Mr S Goodman (Defendants - British American Tobacco Australia Services Limited 50071/03, British American Tobacco Australia Limited 50080/03, ACN 001 259 301 Pty Ltd, 50076/03)) Mr N Hutley SC, Ms R Pepper (Defendant - Stuart Alexander & Co Pty Ltd, 50073/03) COUNSEL : Mr M Abbott QC, Mr J Clarke (Defendant - Shahin Enterprises Pty Ltd, 50070/03) Mr H Insall SC (Defendants - Campbells Cash & Carry Pty Ltd (50072), Australian Liquor Marketers Pty Limited (50077), IGA Distribution (Vic) Pty Limited (50078), Composite Buyers Limited (50082) Queensland Independent Wholesalers Ltd (50079/03, IGA Distribution (SA) Limited (50081/03), IGA Distribution Pty Ltd (50083/03)) Ms Grace Monaco (sol) (Statewide Independent Wholesalers Ltd (50069/03)) Mr R MacFarlan QC, Mr J Hmelnitsky (Philip Morris Limited (50074/03) (50103/03), Statewide Tobacco Services Ltd (50084/03)) Robert Richards & Associates (Plaintiffs) Clayton Utz (Defendants - British American Tobacco Services Limited 50071/03, British American Tobacco Australia Limited 50080/03) Cridlands Lawyers (Defendant - Stuart Alexander & Co Pty Limited, 50073/03) SOLICITORS : Isles Selley Lawyers (Defendant - Shahin Enterprises Pty Ltd, 50070/03) Freehills (Defendants - Campbells Cash & Carry Pty Ltd (50072), Australian Liquor Marketers Pty Limited (50077), IGA Distribution (Vic) Pty Limited (50078), Composite Buyers Limited (50082), Queensland Independent Wholesalers Ltd (50079/03, IGA Distribution (SA) Limited (50081/03), IGA Distribution Pty Ltd (50083/03)) Moray & Agnew (Statewide Independent Wholesalers Ltd (50069/03)) Allens Arthur Robinson (Philip Morris Limited (50074/03) (50103/03), Statewide Tobacco Services Ltd (50084/03)) Speed and Stracey (ACN 001 259 301 Pty Ltd, 50076/03)