Leonard Thomas Symington & Anor v Hoechst Schering Agrevo Pty Ltd & Ors [1997] FCA 969 (4 September 1997)

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE - Representative proceedings - Proceeding claiming damages in respect of losses flowing from contamination of cattle by a chemical - Eight distributors joined as respondents - Applicants' personal claim only against first respondent - Competency of proceedings against remaining respondents - Whether it is necessary in a representative action that the representative party have a personal claim against all respondents.

Federal Court of Australia Act 1976 , ss 33C and 33D

NG 581 of 1996

LEONARD THOMAS SYMINGTON and PATRICIA ANN SYMINGTON

v HOECHST SCHERING AGREVO PTY LIMITED, ICI AUSTRALIA OPERATIONS PTY LIMITED, RHONE-POULENC RURAL AUSTRALIA PTY LIMITED, NUFARM LIMITED, INCITEC LIMITED, DAVIDSON INDUSTRIES PTY LIMITED and FARMOZ CHEMICALS PTY LIMITED

JUDGE: WILCOX J

DATE: 4 SEPTEMBER 1997

PLACE: SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 581 of 1996

BETWEEN:	LEONARD THOMAS SYMINGTON and PATRICIA ANN SYMINGTON ApplicantS
AND:	HOECHST SCHERING AGREVO PTY LIMITED FIRST RESPONDENT ICI AUSTRALIA OPERATIONS PTY LIMITED SECOND RESPONDENT RHONE-POULENC RURAL AUSTRALIA PTY LIMITED THIRD RESPONDENT NUFARM LIMITED FOURTH RESPONDENT INCITEC LIMITED FIFTH RESPONDENT DAVIDSON INDUSTRIES PTY LIMITED SIXTH RESPONDENT and FARMOZ CHEMICALS PTY LIMITED SEVENTH RESPONDENT
JUDGE:	WILCOX J
DATE OF ORDER:	4 SEPTEMBER 1997
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. In relation to the notice of motion of the first respondent:

(a) the further hearing of that motion be adjourned to a date to be fixed with my associate in November or December 1997; and

(b) the applicants pay the first respondent's costs of the hearings today and on 24 June 1997.

2. In relation to the notices of motion of the other respondents, the proceeding as against each of them, be dismissed with costs.

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	NG 581 of 1996

BETWEEN:	LEONARD THOMAS SYMINGTON and PATRICIA ANN SYMINGTON ApplicantS
AND:	HOECHST SCHERING AGREVO PTY LIMITED FIRST RESPONDENT ICI AUSTRALIA OPERATIONS PTY LIMITED SECOND RESPONDENT RHONE-POULENC RURAL AUSTRALIA PTY LIMITED THIRD RESPONDENT NUFARM LIMITED FOURTH RESPONDENT INCITEC LIMITED FIFTH RESPONDENT DAVIDSON INDUSTRIES PTY LIMITED SIXTH RESPONDENT and FARMOZ CHEMICALS PTY LIMITED SEVENTH RESPONDENT

EXTEMPORE REASONS FOR JUDGMENT

WILCOX J: Before the Court are notices of motion wherein all seven remaining respondents seek to have the proceeding struck out as against them. The motions raise issues of general importance in relation to Part IVA of the Federal Court of Australia Act 1976 , which governs representative proceedings in this Court.

The applicants, Leonard Thomas Symington and Patricia Ann Symington, are graziers who conduct their business on a property known as "Uambi" near Wee Waa in northern New South Wales. They complain that cattle owned by them have ingested or absorbed a chemical called endosulfan which, they say, is marketed as a pesticide, under various brand names, by each of the respondents. The applicants claim they did not themselves use endosulfan products; rather, endosulfan products were sprayed, from aeroplanes, on the cotton fields which adjoin their property on three sides. They say the aerial spray drifted onto their property and contaminated vegetation and water ingested by their cattle.

The action was commenced on 17 July 1996 using Part IVA of the Act. The applicants sue on behalf of themselves and other persons ("the group members") who allegedly suffered losses when meat was rejected, cattle impounded and other precautions taken by regulatory authorities following the detection of endosulfan residues in beef and beef cattle. In an Amended Statement of Claim filed on 2 October 1996, the applicants described the group members in the following way:

"i. a group of identified owners of cattle who claim loss to value of the cattle; costs associated with testing and holding the cattle; and loss of profits;

ii. all other owners of cattle who suffer loss to the value of their cattle; costs associated with testing and holding the cattle; and loss of profits;

iii. a group of identified operators of feedlots who claim loss of profits from reduced, delayed or withheld throughput of cattle; costs of testing and holding the cattle; costs of testing fodder; administrative and other associated costs; loss of profits arising out of destruction of cattle, loss of contracts and loss of markets;

iv. all other operators of feedlots who suffer loss of profits from reduced, delayed or withheld throughput of cattle; costs of testing and holding the cattle; costs of testing fodder, administrative and other associated costs; loss of profits arising out of destruction of cattle; loss of contracts and loss of markets;

v. a group of identified fodder producers who claim loss to value of fodder produced by them;

vi. a group of unidentified fodder producers who suffer loss to value of fodder produced by them."

Paragraph 41 of the Amended Statement of Claim alleged that the group members exceed seven in number. The materiality of this allegation is that s 33C(1)(a) of the Act limits the use of the representative procedure to cases where seven or more persons have claims against the same person. The subsection reads:

"(1) Subject to this Part, where:

(a) 7 or more persons have claims against the same person; and

(b) the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and

(c) the claims of all those persons give rise to a substantial common issue of law or fact;

a proceeding may be commenced by one or more of those persons as representing some or all of them."

In Tropical Shine Holdings Pty Limited v Lake Gesture Pty Limited (1993) 45 FCR 457, I considered the proper interpretation of para (a), in light of the fact that s 33H(2) of the Act provides that, in describing or otherwise identifying group members, it is not necessary to name them or specify their number. The problem was to reconcile the two provisions. Section 33C(1)(a) seemed to require an assertion of the existence of more than seven persons with claims, whereas s 33H(2) relieved the applicant from having to specify the number. At 462 I said:

"I think the only way of making sense of section 33C(1)(a) is to interpret it as restricting the use of Part IVA to claims that, by their nature and assuming that they have substance, are shared by at least seven persons. I use the word `shared' in the sense explained by pars (b) and (c), that is, that the claims of all the persons are in respect of, or arise out of, the same, similar or related circumstances and give rise to a substantial common issue of law or fact. Interpreted in this way, the paragraph fulfils the function of weeding out cases that should clearly not be brought as representative proceedings because it is obvious that less than seven people share the claim whilst preserving the principle embodied in s 33H."

The application of this approach to the present case means it is not necessary for the applicants to specify the number of people who have claims against any particular respondent, but they must be able to satisfy the Court at some appropriate time that, by its nature and assuming it has substance, their claim against any particular respondent is shared with at least five other persons.

In this case, it is not yet clear that seven or more persons have a claim against any particular respondent. The difficulty faced by the applicants is that identification of the contaminant chemical, endosulfan, does not establish which of the several manufacturers or distributors of endosulfan supplied the product that caused contamination of particular cattle. In order to facilitate its application to crops, endosulfan is mixed with one or more other substances, the "delivery vehicle". Delivery vehicles vary between manufacturers but, as I understand counsel for the applicant, they are not detectable - or, at least, identifiable - in analyses of samples taken from affected cattle. Analyses of samples do not, therefore, identify the manufacturer of the contaminant endosulfan. Information on that point can only be obtained from sales or delivery records, or perhaps personal recollection. At this stage, little of this information is available. Although it seems more than seven persons suffered endosulfan contamination of their cattle, it is not yet possible to say there are at least seven persons whose cattle became contaminated by any particular respondent's product.

A further difficulty, from the point of view of the applicants, arises out of s 33D of the Act. That section is as follows:

"(1) A person referred to in paragraph 33C(1)(a) who has a sufficient interest to commence a proceeding on his or her own behalf against another person has a sufficient interest to commence a representative proceeding against that other person on behalf of other persons referred to in that paragraph.

(2) Where a person has commenced a representative proceeding, the person retains a sufficient interest:

(a) to continue that proceeding; and

(b) to bring an appeal from a judgment in that proceeding;

even though the person ceases to have a claim against the respondent."

The evident purpose of subsection (1) is to overcome the common law standing rule that says A may not bring a damages action on behalf of B against C. Normally a person can only bring an action for damages on his or her own behalf. If that rule was applied in representative proceedings, it would defeat their purpose. Section 33D(1) is designed to abrogate the common law rule but, of course, it does so only to the extent of the provision made by the subsection itself.

The first thing to note about the subsection is that it refers to a person, referred to in paragraph 33C(1)(a), who has "a sufficient interest to commence a proceeding on his or her own behalf". That is, one of the seven or more persons who have claims against "the same person" can bring a representative proceeding against that other person "on behalf of" the other six or more persons referred to in that paragraph. As I interpret this provision, it means that where there is a group of seven or more persons, all of whom have claims against a particular person, then any one of those seven or more persons has a sufficient interest to commence a representative proceeding against that person on behalf of the other members of the group. I think it is clear that the applicant - that is to say, the representative party - must himself or herself have standing to sue the particular respondent and, where there is more than one respondent, each of them. It is not enough that the applicant has standing to sue one respondent and other people have claims against some other respondent which arise out of similar or related circumstances and give rise to a substantial common issue of law or fact.

The present applicants claim the product supplied to their neighbours, which contaminated their cattle, was that of the first respondent, Hoechst Schering Agrevo Pty Limited. They concede they personally have no claim against the second, third, fourth, fifth or sixth respondents. The result is they have no standing to bring an action against those respondents. Accordingly, the action must be dismissed as against those respondents.

In relation to the first respondent, at the present time it does not appear there are seven or more persons with a claim against that respondent. However, as the applicants identify at least four people in that category and investigations are not yet complete, I think I should give them further time in which to complete those investigations.

On the other hand, I think it is reasonable to accede to the application made by counsel for the first respondent for an order that the applicants pay the costs incurred by his client in respect of the hearings today and on 24 June. Had the applicants told the first respondent that their research was still incomplete and they needed more time in which to demonstrate there was a group of seven, the first respondent, acting reasonably, would have allowed that time. No warning was given and the applicants seek adjournment of the current application. This has involved unnecessary expense.

The orders I make in respect of the various notices of motion are these:

(i) in relation to the notice of motion of the first respondent, I adjourn the further hearing of that motion to a date to be arranged with my associate in November or December 1997. I order the applicants to pay the first respondent's costs of today and of 24 June 1997;

(ii) in relation to the motions of the other respondents, I dismiss with costs the proceeding as against each of them.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox

Associate:

Dated: 4 September 1997

Counsel for the Applicant:	J E Rowe
Solicitor for the Applicant:	Peter Long & Co
Counsel for the First Respondent:	J Langmead
Solicitor for the First Respondent:	Clayton Utz
Counsel for the Second and Fifth Respondents:	G C McArthur
Solicitor for the Second and Fifth Respondents:	Phillips Fox
Counsel for the Third Respondent:	M Orlov
Solicitor for the Third Respondent:	Middletons Moore & Bevins
Counsel for the Fourth Respondent:	S Anderson
Solicitor for the Fourth Respondent:	Ebsworth & Ebsworth
Counsel for the Sixth and Seventh Respondent:	A S Bell
Solicitor for the Sixth and Seventh Respondent:	McCabe Brown
Date of Hearing:	4 September 1997
Date of Judgment:	4 September 1997