Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 56 (5 February 1999)

Last Updated: 10 February 1999

FEDERAL COURT OF AUSTRALIA

Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 56

PRACTICE AND PROCEDURE - three representative proceedings under Part IVA of Federal Court of Australia Act 1976 (Cth) - group members suffered economic loss as the result of cessation of supply of gas in Victoria - abuse of process - whether any of the proceedings vexatious or oppressive - whether proceedings issued for improper purpose of "fishing" or to "capture the market" for the claims of group members - whether any common issues relating to misleading or deceptive conduct and negligence are substantial common issues of law or fact - whether proceedings should be consolidated - whether proceedings are inappropriate as representative proceedings under Pt IVA- whether two solicitors may appear on the record

WORDS & PHRASES - "substantial common issue of law or fact"

Federal Court of Australia Act 1976 (Cth)- Pt IVA, ss 33C(1), 33N(1)(d)

Federal Court Rules O 29 r 5

Gale v Denman Picture Houses Ltd [1930] 1 KB 588 cited

White Industries (Qld) Pty Ltd v Flower & Hart [1998] FCA 806; (1998) 156 ALR 169 cited

Silkfield Pty Ltd v Wong (1998) 159 ALR 329 applied

Tropical Shine Holdings Pty Ltd v Lake Gesture Pty Ltd (1993) 45 FCR 457 cited

BETWEEN:	JOHNSON TILES PTY LTD (ACN 004 576 103) Applicant
AND:	ESSO AUSTRALIA LIMITED (ACN 000 018 566) Respondent
AND BETWEEN:	GREGORY ALAN DEAN and others according to the schedule Applicants
AND:	ESSO AUSTRALIA LIMITED (ACN 000 018 566) Respondent
AND BETWEEN:	EDDIE PIETROBUONO Trading as Mel's Pizza and Pasta Bar (on his own behalf and representing the persons referred to in paragraph 1 of the Statement of Claim herein) Applicant
AND:	ESSO AUSTRALIA RESOURCES LTD (ARBN 000 444 860) Respondent
JUDGE:	MERKEL J
DATE OF ORDER:	5 FEBRUARY 1999
WHERE MADE:	MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 519 OF 1998 VG 524 OF 1998 VG 526 OF 1998

BETWEEN:	JOHNSON TILES PTY LTD (ACN 004 576 103) Applicant
AND:	ESSO AUSTRALIA LIMITED (ACN 000 018 566) Respondent
AND BETWEEN:	GREGORY ALAN DEAN and others according to the schedule Applicants
AND:	ESSO AUSTRALIA LIMITED (ACN 000 018 566) Respondent
AND BETWEEN:	EDDIE PIETROBUONO Trading as Mel's Pizza and Pasta Bar (on his own behalf and representing the persons referred to in paragraph 1 of the Statement of Claim herein) Applicant
AND:	ESSO AUSTRALIA RESOURCES LTD (ARBN 000 444 860) Respondent
JUDGE:	MERKEL J
DATE OF ORDER:	5 FEBRUARY 1999
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

In VG 519 of 1998 and VG 524 of 1998:

1. The proceedings be consolidated.

2. Leave be granted to Messrs Slater & Gordon and Maurice Blackburn & Co to appear as solicitors on the record in the consolidated proceeding on condition that until further order they nominate one address for service and engage one set of counsel to represent the applicants and group members.

3. Leave be granted to the applicants to amend the application and their statement of claim in accordance with the amended statement of claim filed on 7 December 1998, the submissions for the applicants filed on 9 December 1998 and these reasons for judgment.

4. Upon the serving and filing of the amended application and the amended statement of claim in accordance with this order within seven days, the notices of motion dated 29 October 1998 of Esso Australia Ltd be dismissed.

5. Esso Australia Limited pay the applicants' costs of and incidental to the notice of motion.

6. Adjourn the giving of further directions in the consolidated proceeding to 9.30am on 22 February 1999.

7. Liberty to apply be reserved.

In VG 626 of 1998:

1. The proceeding no longer continue as a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) and until further order prosecution of the proceeding be stayed.

2. The notice of motion given by Esso Australia Ltd dated 29 October 1998 otherwise be dismissed.

3. Each party is to bear its or his costs of and incidental to the notice of motion dated 29 October 1998.

4. Liberty to apply be reserved.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 519 OF 1998 VG 524 OF 1998 VG 526 OF 1998

BETWEEN:	JOHNSON TILES PTY LTD (ACN 004 576 103) Applicant
AND:	ESSO AUSTRALIA LIMITED (ACN 000 018 566) Respondent
AND BETWEEN:	GREGORY ALAN DEAN and others according to the schedule Applicants
AND:	ESSO AUSTRALIA LIMITED (ACN 000 018 566) Respondent
AND BETWEEN:	EDDIE PIETROBUONO Trading as Mel's Pizza and Pasta Bar (on his own behalf and representing the persons referred to in paragraph 1 of the Statement of Claim herein) Applicant
AND:	ESSO AUSTRALIA RESOURCES LTD (ARBN 000 444 860) Respondent
JUDGE:	MERKEL J
DATE:	5 FEBRUARY 1999
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

Introduction

1 On 25 September 1998 an explosion and fire occurred at the Longford gas plant in the State of Victoria. The plant was owned, operated and conducted by a company or companies in the Esso group of companies. As a consequence of the explosion, reticulated gas ceased to be available to gas consumers in the State of Victoria until the resumption of supply on 12 October 1998.

2 On 29 September 1998 Slater & Gordon, acting as solicitors for Johnson Tiles Pty Ltd, commenced a proceeding in the Court on behalf of their client as a representative party pursuant to Pt IVA of the Federal Court of Australia Act 1976 (Cth) ("the Act"). The proceeding, which was against Esso Australia Limited, claimed damages on behalf of all represented persons ("the Johnson Tiles proceeding"). The represented persons were defined in the application as all persons who, as at the date of the filing of the application, have suffered injury, loss or damage as a consequence of the stoppage of supply of gas from the Longford plant.

3 On 29 September 1998 Maurice Blackburn & Co, acting as solicitors for Gregory Alan Dean and four other applicants, commenced a proceeding on behalf of those applicants as representative parties pursuant to Pt IVA of the Act. The proceeding, which was against Esso Australia Limited and seven other respondents, claimed damages suffered by the group members to whom the proceedings related as a result of the interruption or cessation of supply of gas in Victoria after 25 September 1998 ("the Dean proceeding"). The group members were defined in the application as members of certain unions who had been stood down from their employment as a result of the interruption or cessation of supply of gas commencing on and from 25 September 1998 and domestic and commercial consumers who had a contract for the supply of gas produced from the Longford Plant. Subsequently, consent orders were made for the dismissal of the claims against all respondents to the Dean proceeding other than Esso Australia Limited.

4 On 30 September 1998 Harry Nowicki & Co solicitors commenced a proceeding on behalf of Richtrail, a corporation, as a representative party pursuant to Pt IVA of the Act claiming damages against Esso Australia Limited on behalf of group members. The group members were defined as all persons who at the date of the filing of the application have suffered injury, loss or damage by reason of the interruption or cessation of supply of gas from the Longford plant on and after 25 September 1998. Subsequently, the application was amended by the substitution of Eddie Pietrobuono as applicant and of Esso Australia Resources Ltd as respondent. The application was further amended by the group members being defined as all persons who are or were on 25 September 1998 proprietors of restaurant and/or take-away food businesses carried on at premises situated in Victoria and who, as at the date of the filing of the application, had suffered injury, loss or damage by reason of the interruption or cessation of supply of gas from the Longford plant. In these reasons I refer to the third proceeding as "the Pietrobuono proceeding".

5 Esso Australia Limited and Esso Australia Resources Ltd (which are referred to in these reasons separately and collectively as "Esso") have moved the Court for orders that the proceedings be struck out on the ground that they are an abuse of process. In the alternative, Esso has applied for an order that the proceedings no longer continue as proceedings under Pt IVA of the Act.

6 Slater & Gordon and Maurice Blackburn & Co, recognising the difficulties inherent in two representative proceedings against the same defendant on behalf of the same represented parties for the same loss, entered into an agreement dated 6 November 1998 to enable them to jointly conduct only one representative action under Pt IVA. Pursuant to that agreement application has been made to the Court by senior counsel instructed by both firms of solicitors for the consolidation of the Johnson Tiles and Dean proceedings, or alternatively, for the continuation of only one of the proceedings but with both firms of solicitors as solicitors on the record acting for the applicants in the representative proceeding that is permitted to continue.

7 Senior counsel appearing on behalf of Pietrobuono in the Pietrobuono proceeding has applied to the Court for orders that enable that proceeding to be maintained on behalf of the proprietors of restaurant and/or take-away food businesses which suffered loss as a result of the explosions and for that group of represented persons to be excluded as represented persons in the Johnson Tiles and the Dean proceedings.

8 As a consequence of the various applications before the Court the following issues have arisen:

* whether any of the proceedings should be struck out or dismissed as an abuse of process;

* whether the Court should order that any of the proceedings no longer continue as a representative proceeding under Pt IVA of the Act;

* in the event that the Court does not make the orders sought by Esso, which of the proceedings should continue as a representative proceeding under Pt IVA of the Act.

Abuse of Process

9 Abuse of process was said by Esso to have arisen by reason of:

* the multiplicity of proceedings;

* the issue of proceedings for the impermissible object of engaging in "fishing";

* commencement of the proceedings for the collateral and improper purpose of solicitors capturing the "market" or "clientele" of persons wishing to bring class actions to recover the loss they suffered as a result of the explosion.

10 In reliance on the above matters Esso contended that the proceedings were an abuse of the process of the Court and should be struck out or dismissed accordingly. Senior counsel for Esso supported his submissions by reference to the alleged failure of the proceedings to satisfy the requirements of Pt IVA of the Act. Ultimately, senior counsel put separate and detailed submissions in relation to that aspect of the matter and it is appropriate that those submissions be dealt with as a separate issue to abuse of process. However if, and to the extent that, the proceedings fail to satisfy the requirements of Pt IVA the failure may be relevant to the abuse of process submission.

(a) Multiplicity of Proceedings

11 It is well established that, prima facie, it is vexatious and oppressive for a second or subsequent action to be commenced in a court in Australia if an action between the same parties is already pending with respect to the same subject matter in an Australian court. In such circumstances it would lie on the party who brings the second action to show that it was not so: see The Christianberg (1885) 10 PD 141 at 148 per Lord Esher M R and Slough Estates Ltd v Slough Borough Council [1968] Ch 299 at 315. Esso submitted that it was an abuse of process for the Dean and the Pietrobuono proceedings to be issued, as those proceedings were proceedings between the same parties with respect to the same subject matter as the Johnson Tiles proceeding.

12 Senior counsel for the applicants in the three proceedings did not dispute the principles relied upon by Esso but submitted that their respective proposals for the continuation of the proceedings avoided vexation or oppression. In substance, senior counsel for the applicants in the Johnson Tiles and the Dean proceedings contended that it was appropriate for the consolidated proceeding, or for only the Johnson Tiles proceeding, to continue as a Pt IVA proceeding. Senior counsel for Pietrobuono contended that, whatever the fate of the Johnson Tiles and Dean proceedings, those proceedings should not continue in respect of the parties represented in the Pietrobuono proceeding.

13 In the present matter the principle of oppression and vexation, to which I have referred, must be considered in the context of Pt IVA of the Act. A representative proceeding can be issued without leave of the Court, although the Court can order that a proceeding no longer continue as a representative proceeding under Pt IVA (see ss 33L, 33M and 33N) or that individual issues or issues that are not common issues be determined separately (see ss 33Q, 33R and 33S). Also, the Court has ample power under the inherent jurisdiction, the Rules of Court and the Act (see for example s 33N(1)(d)) to direct which representative proceeding is to continue as a proceeding under Pt IVA where more than one is issued.

14 A representative proceeding under Pt IVA will come before the Court for directions at an early stage. As Pt IVA provides for notice to group members to enable them to opt out (see ss 33X and 33J) the Court will determine at an early stage the appropriate course of the proceeding, including the time at which notice is to be given to represented parties to enable them to opt out. If at that stage, as has occurred in the present case, there are several representative proceedings it will be incumbent upon the Court to determine which of those proceedings should be permitted to proceed as representative proceedings under Pt IVA. Plainly, the Court will seek to avoid a situation of ordering the giving of the opt out notice in respect of a proceeding which may not be an, or the, appropriate representative proceeding. Thus, at an early directions hearing, questions of vexation and oppression can, and will, be considered by the Court.

15 In the present case, if the principle contended for by senior counsel for Esso were to be accepted, it would have the consequence of "first come first served" in respect of all Pt IVA proceedings irrespective of whether the "first to come" was the, or an, appropriate vehicle for a representative proceeding. In my view such an approach which would, prima facie, treat any subsequent proceedings as vexatious and oppressive would not be in accordance with principle, authority or the object of the statutory scheme to "enhance access to justice, reduce the costs of proceedings and promote efficiency in the use of court resources": see Second Reading Speech, House of Representatives, Hansard 14 November 1991 at 3174-3176.

16 Accordingly, at an early stage, when the Court is required to consider the giving of notice to group members the issue of the appropriateness of any particular proceeding as a representative proceeding under Pt IVA will require consideration. Where more than one such proceeding has been issued the Court will determine which of the proceedings is to continue under Pt IVA. A number of factors, including avoidance of vexation and oppression, are relevant considerations in that regard. In such circumstances, prima facie, the commencement of a bona fide representative proceeding prior to the Court giving substantive directions (including the giving of notice to group members) in an existing but overlapping representative proceeding will not, of itself, be vexatious and oppressive.

17 As I shortly explain, I am of the view that the Dean and the Pietrobuono proceedings were commenced as bona fide representative proceedings. Those proceedings have come on for directions hearings at the same time as the Johnson Tiles proceeding. The Court is able to make appropriate orders and directions to obviate vexation and oppression. In these circumstances I am not satisfied that the commencement and prosecution to date of either the Dean or the Pietrobuono proceeding is vexatious or oppressive.

Fishing

18 Esso contended that each of the proceedings was commenced without the parties knowing whether they had a case or not. In substance, it was contended that the proceedings were in the nature of a "fishing bill" to try and find out whether the applicants have a case or not. Reliance was placed on the following passage of Scrutton LJ in Gale v Denman Picture Houses Ltd [1930] 1 KB 588 at 590:

"A plaintiff who issues a writ must be taken to know what his case is. If he merely issues a writ on the chance of making a case he is issuing what used to be called a "fishing bill" to try to find out whether he has a case or not. That kind of proceeding is not to be encouraged. For a plaintiff after issuing his writ but before delivering his statement of claim to say, "Show me the documents which may be relevant, so that I may see whether I have a case or not," is a most undesirable proceeding."

See also Lyons v Kern Konstructions (Townsville) Pty Ltd (1983) 47 ALR 114 at 130 per Fitzgerald J.

19 It was contended on behalf of Esso that:

* the applicants have conceded that they do not know what caused the explosion at the Longford plant on 25 September 1998;

* proceedings were issued with undue haste and were premature;

* the applicants have not properly identified or formulated their causes of action and at least some evidence that supports each element of their causes of action.

20 In these circumstances Esso submitted that the proceedings, being in the nature of fishing, ought to be dismissed as an abuse of process particularly when the availability of pre-trial discovery, non-party discovery and similar procedures (see O 15A) is considered.

21 In my view it is necessary to distinguish between a proceeding, which is issued for the purpose of determining whether a party has a case or not, from a proceeding where a party, acting bona fide, commences the proceeding for the purpose of obtaining the relief sought but at the date of issue may not be aware of the evidence and the material facts which will be necessary to support the various elements of the causes of action relied upon. In the former case there are substantial grounds for contending that the proceeding has not been issued for the purpose of the applicant obtaining the relief sought, but for the collateral purpose of what has been described in the cases as a "fishing bill". However, in the latter case the proceeding is not an abuse of process, as such. Rather, it is a case where the pleading may be struck out on the ground that it is inadequately particularised with leave being granted to deliver a properly particularised statement of claim. In some cases, such as where the relevant facts are known only by the respondent, the Court may order limited discovery before requiring particulars or striking out the Statement of Claim: see Egg and Egg Pulp Marketing Board v Korp Tocumal Trading Co Pty Ltd [1963] VR 378 at 381-382 per Adam J and Lyons at 124-131 per Fitzgerald J.

22 In order to support Esso's case that the proceedings were issued prematurely, senior counsel for Esso cross-examined the solicitors responsible for the commencement of the Johnson Tiles and the Dean proceedings.

23 Mr Styant-Browne, a partner of the firm of Slater & Gordon, was responsible for the commencement of the Johnson Tiles proceeding. His evidence, which I accept, is as follows. He had been acting for Johnson Tiles in relation to an earlier disruption to gas supply caused by an ice plug at the Longford plant in June 1998. Mr Styant-Browne became aware of the explosion and the cessation of supply shortly after 25 September 1998 and took immediate steps to prepare a representative proceeding. Although he said he would have preferred to issue the proceeding at a later point in time, Mr Styant-Browne did not do so as his principal concern was that the State of Victoria might introduce retrospective legislation which would immunise a number of parties, including Esso, in respect of liability for claims for damages arising as a result of the explosion. Mr Styant-Browne said that Johnson Tiles' legal advisers prepared the proceedings over the weekend and had them settled by senior counsel to enable their issue on 29 September 1998. He said the urgency arose as a consequence of the Government refusing to give any assurances that there would not be retrospective legislation of the kind feared by him. Prior to issuing the proceeding the proposed application and statement of claim were sent to Johnson Tiles which authorised the issue of the proceeding in the form it was in when commenced on 29 September 1998.

24 At the time the proceeding was issued the legal advisers acting for Johnson Tiles had considered its claims and formed the view that there were two "very valid causes of action" relied upon in the proceeding. When challenged by senior counsel for Esso as to the basis of the belief Mr Styant-Browne gave the following evidence.

"The section 52 claim was that by representations made either by agents of Esso, by Esso directly or by its conduct, it had asserted that there would be continuity of supply of gas and that people had relied on those representations, which included conduct, and that they had been breached.

Which people relied?---The members of the class.

You didn't speak to every member of the class obviously?---No.

You assumed the class?---Well, I assumed reliance on the part of the applicant or a applicant. I may not have identified who the applicant was but I was satisfied that there were enough people - seven or more - who would fit that description.

In relation to the negligence claim, you assume negligence?---I think I said that I don't know what caused the explosion. My view at that time was that there was a very high standard of care which attached to Esso as the monopoly suppl[ier] to 1.2 million Victorians who depended on the continuity of supply of gas, and that standard of care required Esso to design a system so that in the event you had this adverse incident, whatever the cause, even if there was no negligence involved in the adverse incident itself, it was negligent. That fact alone - the design of that system and the maintenance and operation of that system such that you have an explosion and you shut down the state - I identified and had a belief that that was a negligent act and that constituted a cause of action.

You use the word "I" significantly, don't you? That's exactly what you thought. You took that - - -?---I wasn't the only one who thought that but there were other people on the team who agreed with me.

And they're all lawyers that took that view?---Yes."

25 I am satisfied that the proceeding issued by Slater & Gordon on behalf of Johnson Tiles was not in the nature of a "fishing bill" as contended by Esso. The proceeding was issued on the basis of instructions received from Johnson Tiles which authorised the issue of the proceeding in the form it was in on 29 September. The proceeding was also issued for the purpose of obtaining the relief sought and not for the collateral purpose for ascertaining whether or not a case may be made out. Whilst it is true that the expert evidence was to the effect that the cause of the explosion at the Longford plant was unknown, I am satisfied that it was not unreasonable, improper or an abuse of process for the proceeding to be issued in the circumstances explained by Mr Styant-Browne. In my view the commencement of the proceeding was not an abuse of process.

26 Whilst the factual basis supporting each element of the cause of action relied upon is required to be pleaded (see Qantas Airways Ltd v Cameron [1996] FCA 1483; (1996) 66 FCR 246 at 298 per Lehane J) in some instances that requirement may only be able to be satisfied after interlocutory processes, such as discovery, have enabled the applicant to ascertain and formulate the material facts supporting each element of the causes of action relied upon. In the present matter I expect that much of the information required by the applicants to properly plead their claims in negligence and in relation to the alleged breach of s 52 of the Trade Practices Act 1974 (Cth) ("the TPA") will only be able to be obtained after discovery and other interlocutory processes. Indeed, as part of those processes the Court has already made an order for inspection of the Longford Plant by an inspection team nominated by the applicants to enable them to commence to investigate the cause of the explosion.

27 Senior counsel for Esso briefly cross-examined the two solicitors representing Dean. Criticism was made of the absence of evidence to support the causes of action alleged. The absence of evidence is not surprising in the special circumstances of the present case. Plainly, once the unprecedented explosion had occurred resulting in the cessation of gas supply throughout Victoria, a serious issue inevitably arose as to whether those circumstances had come about as a result of the negligence or other wrongful conduct on the part of Esso or its employees. In such circumstances, it is sufficient to say that I am satisfied that it was not unreasonable, improper or an abuse of process for the Dean proceeding to be commenced.

28 The solicitor responsible for the issue of the Pietrobuono proceeding was not cross-examined. I am not satisfied that there was any abuse of process involved in the issue of that proceeding.

Collateral Purpose

29 Esso contended that the collateral purpose of the applicants, in particular of Slater & Gordon in issuing the Johnson Tiles proceeding, was a desire to be the first to commence a representative proceeding and to do so irrespective of whether the action was premature or constituted fishing. In substance, it was said that the purpose of Slater & Gordon, as the alter ego of Johnson Tiles, was to issue the first representative action and therefore capture or corner the market for all potential claims for damages arising out of the interruption or cessation of gas supply resulting from the explosion at the Longford plant.

30 In White Industries (Qld) Pty Ltd v Flower & Hart [1998] FCA 806; (1998) 156 ALR 169 at 239-241 Goldberg J considered the principles applicable to abuse of process in the context of collateral purpose. His Honour observed (at 239) that in that context, abuse of process:

"involves a party using court proceedings and procedures for a purpose unrelated to the objectives which the Court process is designed to achieve."

31 In response to the suggestion by senior counsel for Esso that Slater & Gordon had commenced the proceeding to capture a "market" and "clientele", Mr Styant-Browne gave the following evidence:

"You appreciate that a firm of solicitors instituting, earlier than later, before other firms get involved, you can in effect capture a market, capture a clientele?---No, I don't accept that.

You don't accept that's the result?---I think under Part IVA there is - if you want me to take you through it - but there is a discretion in the court to choose who the most appropriate representative party is, which is a clear power which is given to the court under Part IVA. So the mere fact of issuing first, doesn't guarantee you of holding the class action because it's open to anyone else to make application - or the court of its own motion to decide that the representative party is not the appropriate applicant, and to appoint another one, and with that would go whoever the solicitors of that particular individual happened to be. So I don't subscribe to the school of thought that says, "First in, best dressed, you get it."

No, but you do subscribe to the school of though that says that if you institute large class actions and you get the appropriate media coverage you, that is your firm, is more than likely to - I think as you may have said - "capture the class, and the larger the class, the more pressure we can bring to bear on the respondent." Is that true?---Yes, it is, that's one of the factors that operates in whether to issue quickly.

That's what you said to the media at the time, didn't you?---I may well have, yes.

That's what I'm really suggesting to you. That's one of the motives that you had in instituting these proceedings, to capture the class and obviously - as your firm is - it's better off, the larger the class then the more control you have over this particular litigation?---Yes.

That was a very important factor when you've competitors such as Maurice Blackburn that they do the same thing?---It wasn't. Look, there's no way I would issue a proceeding within two working days, if it wasn't for the threat of retrospective legislation."

32 I am satisfied that the Johnson Tiles proceeding was issued for the purpose of obtaining the relief sought by Johnson Tiles on its own behalf and on behalf of group members and not for the collateral purpose of capturing "a market" or "clientele" as was suggested by senior counsel for Esso.

33 Further, it is the applicant's purpose rather than the motive of its solicitor for acting in the matter that is relevant. Esso's submission, in reality, relates to the alleged motive of Slater & Gordon in acting as solicitors in the proceeding, rather than to the applicant's purpose in procuring a proceeding to be issued by its solicitors acting on its behalf.

34 I am also of the view that the two subsequent proceedings commenced by Dean and Richtrail were for the purpose of obtaining the relief sought and not for any collateral purpose.

Part IVA

35 Esso has applied to the Court for an order that the proceedings not continue as representative proceedings under Pt IVA. The grounds relied upon by Esso are that:

* the proceeding did not comply with the requirements of s 33C(1) of the Act;

* it is in the interests of justice for the Court to make an order under s 33N(1)(d), as it is inappropriate that the claims be pursued by means of a representative proceeding.

36 Section 33C(1) provides as follows:

"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."

Section 33N(1) relevantly provides:

"The Court may, on application by the respondent or of its own motion, order that a proceeding no longer continue under this Part where it is satisfied that it is in the interests of justice to do so because:
(a) ...
(b) ...
(c) the representative proceeding will not provide an efficient and effective means of dealing with the claims of group members; or
(d) it is otherwise inappropriate that the claims be pursued by means of a representative proceeding."

37 The pleadings in the Johnson Tiles and the Dean proceedings have had a troubled history. The parties have made their final submissions on the Pt IVA issues on the basis of the proposed pleadings being a statement of claim filed on 7 December 1998 and the earlier amended Application (which will have to be further amended to accord with the recent proposed amended statement of claim and the written submissions filed on 9 December 1998). In these circumstances, notwithstanding that the proposed pleadings do not coincide with the pleadings as they currently stand, I am prepared to deal with the application of Esso under Pt IVA on the basis of the proposed pleadings, but prior to the making of orders I intend to regularise the pleadings situation by providing for the proposed pleadings to become the actual pleadings, subject to typographical errors and other formal amendments which may be necessary to give effect to the matters raised in these reasons for judgment. Further, as the applicants in the Johnson Tiles and the Dean proceedings propose that the matter proceed on the pleadings proposed for the Johnson Tiles proceeding, I will deal with the matters arising under Pt IVA in those proceedings on the basis of the proposed pleadings in that proceeding.

38 Finally, although the Pietrobuono proceeding relies on substantially the same causes of action pleaded in the Johnson Tiles proceeding, the pleading is not identical. However, I am satisfied that the differences in the pleading do not have the consequence that any different result should arise in relation to the Pt IVA issues in the Pietrobuono proceeding to that which would arise in relation to the Johnson Tiles proceeding.

39 Accordingly, in considering the Pt IVA issues I will initially confine my consideration to the proposed pleadings in the Johnson Tiles proceeding.

40 The group members to which the Johnson Tiles and the Dean proceedings relate fall into three categories. The first category are business users being persons, including corporations, who on 25 September 1998 were customers of a gas retailer having a contract for the supply of gas for the purpose of operating a business and who suffered damage to property and/or pecuniary loss as a result of the interruption or cessation of supply of gas in or near Victoria commencing on or from 25 September 1998. The second category are domestic users being persons who on 25 September 1998 were customers of a gas retailer having a contract for the supply of gas for domestic purposes and who suffered pecuniary loss as a result of the September stoppage. The third group are stood down workers being persons who suffered pecuniary loss by reason of being stood down from their employment as a result of the September gas stoppage.

41 Each proceeding is presently only against Esso Australia Ltd although the applicants propose to join Esso Australia Resources Ltd as a respondent on the basis that it is effectively the owner, controller or operator of the Longford plant. Two causes of action are relied upon. The first is in negligence and the second is on the basis of misleading and deceptive conduct by Esso in contravention of s 52 of the TPA and its Victorian statutory counterpart, being s 11 of the Fair Trading Act 1985 (Vic). The federal cause of action is an essential element in the representative action: see s 33G.

42 The claim in negligence may be summarised as follows:

* the business users and the domestic users, as was well known by Esso, were dependent upon Esso as their sole supplier of gas for a secure, reliable, adequate and continuous supply of gas;

* the stood down workers were likewise dependant upon Esso as the sole supplier of gas to their respective employers;

* Esso knew or ought reasonably to have known and foreseen that, in the event of a cessation or interruption of a supply of gas to the domestic users, the business users or the employers of the stood down workers, all of the group members would suffer loss and damage;

* by reason of the above matters Esso owed a duty of care to each of the group members in the design and operation of the Longford plant;

* the interruption to and cessation of supply as a result of the explosion and fire that occurred at the Longford plant on 25 September 1998 were caused by Esso's negligence and breach of its duty of care as particularised in the amended statement of claim;

* as a consequence of the above matters each of the group members suffered financial loss and damage.

43 Apart from the issue of dependence or reliance upon Esso for supply and proof of individual loss, the remaining issues do not depend on the individual circumstances of each of the group members.

44 The claim of misleading and deceptive conduct may be summarised as follows:

* prior to 25 September 1998, Esso by its conduct had induced persons in the State of Victoria to assume that they could organise their business, employment and personal affairs on the basis that the supply of gas to gas users for the foreseeable future was secure, reliable, continuous and adequate for all of their purposes;

* the conduct primarily relied upon was, in effect, the failure of Esso to inform the public of the risk of interruption or cessation of supply of gas, notwithstanding that it was aware of and involved in general advertising in Victoria of the availability to gas users of a secure, reliable, continuous and adequate supply of gas for all of their purposes;

* by reason of Esso's conduct the group members were induced to assume that they could depend upon Esso for a secure, reliable, continuous and adequate supply of gas for all of their purposes;

* Esso's conduct was misleading or deceptive because its gas production, distribution and storage facilities were insufficiently diverse and were inadequate to ensure a secure, reliable, continuous and adequate supply of gas to gas users for all of their purposes;

* the group members suffered loss and damage by reason of the misleading and deceptive conduct of Esso.

45 As with the negligence claim, apart from the issue of inducement to depend or rely upon Esso for supply and proof of individual loss, the remaining issues do not depend on the individual circumstances of each of the group members.

46 The questions of fact or law common to the claims of Johnson Tiles and Dean and the represented persons were, in substance, the following:

* whether Esso engaged in a course of conduct which was likely to mislead people, including the group members, into believing that the supply of gas in Victoria would be secure, reliable, continuous and adequate for all of their purposes;

* whether the supply of gas in Victoria was secure, reliable, continuous and adequate for all of the purposes of the group members;

* whether Esso owed a duty of care to the business users, the domestic users and the stood down workers;

* whether the September gas stoppage was caused by any want of due care or breach of duty by Esso in the design and/or operation of the Longford plant.

47 The primary submission of Esso was that the substantial issue of fact arising in the negligence claim was the individual dependence or reliance of the represented persons upon Esso for the secure, reliable, adequate and continuous supply of gas without disruption. Similarly, so it was said, the substantial issue of fact arising in the misleading and deceptive conduct claim was that Esso, by its conduct, had induced each of the group members into assuming and therefore depending upon the secure, reliable, continuous and adequate supply of gas without disruption. Esso contended that the significance of the individual circumstances of each group member in establishing Esso's liability for negligence and misleading and deceptive conduct was such that it could no longer be said that the claims of the group members gave rise to a "substantial" common issue of law or fact as was required by s 33C(1)(c). In the alternative it was put that the individual aspects of the claims of group members were such that those individual aspects, the individual proof required of loss and damage and claims of the magnitude made in the present case, both as to the number of persons and quantum potentially involved, made it inappropriate that the proceeding continue as a representative proceeding. Esso also contended that the three classes of business users, domestic users and stood down workers did not constitute a "safe, reliable or adequate definition for a class of 1.3 million claimants, especially where proof of individual reliance or dependence is required".

48 Recently a Full Court in Silkfield Pty Ltd v Wong (1998) 159 ALR 329 considered the operation of s 33C(1) of the Act. The following principles were stated in the joint judgment of O'Loughlin and Drummond JJ:

* where the issue is raised that proceedings having been improperly commenced as representative proceedings, the Court is required to make a judgment on the substantiality of the common issue on the basis of the way in which the action is currently framed in the application and statement of claim (at 336, 340 and 342);

* s 33C(1)(c) does not permit an action to be commenced under Pt IVA merely because there is an issue of fact or law common to the claims of all group members; the common issue must have the additional quality of being a "substantial" common issue. In that context, the common issue must be an issue with "some special significance for the resolution of the claims of all group members" or be "likely to have a major impact on the conduct and outcome of the litigation" (at 342 and 344);

* where determination of the common issues was capable of achieving resolution of all, or a significant part, of the issues of liability raised by the individual claims the common issues would be "substantial" issues. The circumstances of the particular case may show that while resolution of the common issues may not determine the liability of the respondent to all group members, it may nevertheless determine what is, in a practical sense, an issue that is the, or one of the, key issues in the dispute between the respondent and all group members (at 344-345);

* where the common issue is only one of a number of issues that has to be determined to resolve each group members' claims, is of no more importance practically or legally to the outcome of all of the members claims than any of the non common issues in each claim and determination of the common issue in representative proceedings is highly unlikely to achieve the purposes of the legislation (that is, the economic disposition of any individual group members claim or the cost effective use of legal resources, including court resources, in disposing of a large number of claims) it will not be capable of being a "substantial" common issue (at 345);

* the kind of case that can best be run as a representative proceeding is one arising out of a "mass wrong" that is, out of a single act, omission or course of conduct or the same conduct, omission or course of conduct repeatedly made or engaged in, and thus a case in which one or a handful of representative parties are able themselves to give the evidence necessary to present a large part of the case for all group members (at 347).

49 Part IVA is a major advance in achieving real, rather than illusory, access to justice by many who would otherwise have no realistic prospect of such access. It would be unfortunate if the general requirement of "a" substantial common issue led the Court to adopt an overly legalistic approach to Pt IVA. Whilst the principles enunciated in the majority judgment in Silkfield offer important guidance as to the operation of s 33C(1), it is to be borne in mind that the criterion of "a substantial common issue" is imprecise, involves questions of degree and, importantly, an evaluation dependant upon the particular facts and circumstances pleaded. The evaluation requires the determination of whether any of the issues of law or fact common to the claims of the group members is a substantial issue. If there is more than one common issue then the evaluation required is whether the common issues, whether separately or cumulatively, are "substantial" in the sense discussed in Silkfield.

50 The majority judgment in Silkfield used terms such as an issue of "some special significance" to, or which is "likely to have a major impact" on, the outcome of the litigation or which is a "key" issue in the dispute, as an indication of an issue that will satisfy the criterion in s 33C(1)(c). Using such criteria the majority concluded that only one question, which concerned the accuracy of one of nine representations pleaded, was both a live issue and common to the claims of all group members. It was in that context that their Honours concluded (at 346) that there was no reason to think that litigation of the common issue would be likely to resolve wholly, or to any significant degree, the claims of an entitlement to damages of all group members which would require and depend on the examination of their individual circumstances.

51 Esso placed considerable reliance on the dependence of the claims of group members upon their individual circumstances. Although that dependence is plainly a relevant factor, it would be quite wrong to treat Silkfield as authority for the proposition that merely because a representative proceeding requires examination of the individual circumstances of particular claimants in relation to liability, that that has the consequence of resulting in the common issues not being substantial. As pointed out above, what is required is an evaluation of the significance of "a" or "the" common issues to the resolution of the litigation.

52 In the present case I am in no doubt that the claims of all of the group members give rise to substantial common issues. The common issues identified above are issues of "special significance" for the resolution of the claims of all the group members and their resolution "is likely to have a major impact on the conduct and outcome of the litigation". Whilst it may be correct to say that the resolution of the common issues will not be determinative of the claims of each group member, as some evidence will have to be given of their individual circumstances on the issues of dependence and reliance, their resolution will nevertheless satisfy the principles stated in Silkfield. The common issues, in a practical sense, are key issues in the dispute between Esso and the group members.

53 I have adverted to the significance of individual circumstances to the negligence and s 52 claims. I am satisfied that although they may form critical elements in the chain of proof of matters necessary to establish liability in each cause of action, this is not a case where the significance of those matters is such that they result in the common issues not being substantial. Indeed, each of the common issues is a significant and key issue; separately and cumulatively they amount to "substantial" issues in the proceeding. For example, the issues of fact and law relating to whether Esso was negligent or acted in breach of duty (para 13 of the proposed statement of claim) and the overlapping issues relating to whether Esso engaged in misleading conduct (para 18) are plainly common issues that satisfy the principles stated in Silkfield.

54 Further, as was pointed out by O'Loughlin and Drummond JJ (at 345) the issue of substantiality is to be considered in the context of the objectives of Pt IVA. Those objectives were stated in the Second Reading Speech (Hansard at 3174-3175) as follows:

"The new representative proceeding provided in the Bill is based on the existing representative action procedure in the Federal Court and in State supreme courts. The Bill gives the Federal Court an efficient and effective procedure to deal with multiple claims. Such a procedure is needed for two purposes. The first is to provide a real remedy where, although many people are affected and the total amount at issue is significant, each person's loss is small and not economically viable to recover in individual actions. It will thus give access to the courts to those in the community who have been effectively denied justice because of the high cost of taking action.

The second purpose of the Bill is to deal efficiently with the situation where the damages sought by each claimant are large enough to justify individual actions and a large number of persons wish to sue the respondent. The new procedure will mean that groups of persons, whether they be shareholders or investors, or people pursuing consumer claims, will be able to obtain redress and do so more cheaply and efficiently than would be the case with individual actions."

55 The present matter is likely to involve claims for economic loss by an unprecedented number of persons; the evidence suggests in excess of one million. The claims of the domestic users, many business users and the stood down workers are likely to fall into the first category referred to by the Minister whilst many of the claims of the business users are likely to fall within the second category. Thus in the present case, unlike Silkfield, determination of the common issues in representative proceedings is likely to achieve the economic disposition of individual group members claims and the cost effective use of legal resources, including court resources, in disposing of an extraordinarily large number of claims. In my view, to the extent regard is to be had to the purposes of Pt IVA, that confirms my view of the substantiality of the common issues.

56 The present case is akin to that described by O'Loughlin and Drummond JJ (at 447) as the kind of case that can "best be run as a representative proceeding" being one which arises out of an alleged "mass wrong". In particular, the present case is one in which it is likely that a handful of representative parties are able themselves to give the evidence necessary to present "a large part of the case for all group members": see O'Loughlin and Drummond JJ at 347.

57 Senior counsel for Johnson Tiles and Dean accepted that determining the existence of the duty of care, in accordance with the principles discussed in Pyrenees Shire Council v Day (1998) 192 CLR 330, and in particular the principles relating to proximity, may require consideration of some different facts and circumstances, in respect of the three classes of group members. However, in my view the commonality of many of the issues of fact and law arising in relation to the existence of a duty of care (if any) owed by Esso to members of the three groups, and breach of that duty, suggest that any separate issues that may arise as to the existence of a duty of care in relation to the three categories would not deny the common issues of fact and law, relevant to the determination of the negligence claim, the requisite characterisation of "substantiality". In any event, as there are three categories of group members the claims in each category may be determined independently in either the same proceeding (for example with applicants representing each category joining the claims of the three groups in one proceeding) or in three separate proceedings (which can be consolidated under O 29 r 5). If separate proceedings were issued in respect of each of the groups the existence of a duty of care would be a common issue for each group. A different result does not occur if the claims of the three groups are joined in the one proceeding. For reasons that I later explain, consolidation of the Johnson Tiles and the Dean proceedings is appropriate with three separate applicants, each of which is a member of the relevant group, representing the members of that group. Accordingly, in my view the existence, and breach, of a duty of care will be a common issue under s 33C(1)(c) for the purposes of the claims of each group.

58 In any event, as explained above, I am satisfied that the other issues relied upon as common issues are sufficiently substantial to satisfy the criterion of substantiality in s 33C(1)(c).

59 Plainly, the claims of the group members are in respect of or arise out of the same, similar or related circumstances: see Silkfield per O'Loughlin and Drummond JJ at 341 and Zhang v Minister for Immigration, Local Government and Ethnic Affairs [1993] FCA 489; (1993) 45 FCR 384 at 404-405.

60 I am also satisfied that at the date of the issue of the proceedings seven or more persons had claims against Esso of the kind described in s 33C(1)(b) and (c). Esso contended that the applicants had not identified at least seven persons who had claims of the kind required by s 33C(1). The sub-section was considered by Wilcox J in Tropical Shine Holdings Pty Ltd v Lake Gesture Pty Ltd (1993) 45 FCR 457 at 462:

"I think the only way of making sense of s 33C(1)(a) is to interpret it as restricting the use of Pt 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 evidence clearly establishes that the claims of the kind referred to in s 33(1)(b) and (c) are "shared" by at least seven persons in each group. Indeed, the evidence suggests that such claims are shared by an extraordinarily large number of persons. I would add that even on a literal approach to s 33C(1)(a) the evidence given in the present case establishes that the claims the subject of each of the proceedings were claims by more than seven persons.

61 It was also claimed by Esso that even if I was of the view that the common claims did satisfy the requirements of s 33C(1), the sheer volume of potential claims made the litigation virtually unmanageable as representative proceedings. That was said to be particularly so because each case would require the individual circumstances of each claimant to be considered in establishing liability and quantum. However, the magnitude of the claims is a factor that arises from the magnitude of the "mass wrong" alleged by the applicants. Obviously, the greater the extent of the alleged wrong, the greater will be the number of claimants and the magnitude of the claims. If such a situation is said to be the kind of case that can be best run as a representative proceeding (O'Loughlin and Drummond JJ at 347) it would be anomalous for such an action to be said to be inappropriate as a representative proceeding because of its magnitude and the practical difficulties which arise in achieving resolution of the claims. Further, the present case as currently framed will enable a limited and manageable number of represented persons to be called to give evidence of their individual circumstances to enable the key issues of fact and law to be determined.

62 Finally, the Federal Court's ample discretionary and procedural powers under the Rules of Court, the individual docket system of case management and Pt IVA (see for example ss 33Q, 33R and 33S) will ensure that the practical difficulties that may arise can be overcome.

63 For the above reasons I therefore do not accept the submissions of Esso that the proceedings brought as a result of the Longford explosion should no longer continue as representative proceedings under Pt IVA.

Which proceeding should be permitted to be prosecuted?

64 On the basis of the proceeding presently proposed, it would be vexatious and oppressive for Esso to be subjected to more than one representative proceeding under Pt IVA unless I was satisfied that it was in the interests of justice that a second proceeding should be permitted to continue.

65 Senior counsel acting on behalf of the applicants in the Johnson Tiles and the Dean proceedings accepted that principle and contended that the consolidated Johnson Tiles and Dean proceeding should continue as a representative proceeding under Pt IVA.

66 Senior counsel acting on behalf of Pietrobuono opposed that course contending that restaurateurs and take-away food premises were specialised businesses that required separate representation. I am unable to accept that contention. Firstly, I am not satisfied that the claims of restaurateurs and take-away food businesses raise any significantly different issues of law or fact than the claims of other business users. Whilst, ultimately the quantum of such claims may involve some special questions, that matter can be considered if, and when, it arises: see s 33Q. In my view, the other matters relied upon by senior counsel do not require or warrant separate representation at this stage. I would add that I do not accept that the separate claims of employers as business users and those of their employees as stood down workers raise a conflict of interest issue as was contended.

67 There is a further difficulty. There is no reason why the solicitors acting in the Pietrobuono proceedings cannot co-operate with and assist the solicitors conducting the other proceeding in the prosecution of that proceeding by offering or suggesting appropriate representative parties if those parties have any distinct circumstances that may require special consideration. Nothing that I order in the present cases would prevent or inhibit such co-operation.

68 Finally, I am of the view that there should only be one proceeding against Esso. It is in the interests of justice and appropriate that that proceeding be either the Johnson Tiles, the Dean proceeding or the consolidated proceeding. Those proceedings represent the claims of the three groups of persons that have suffered economic loss as a result of the explosion at the Longford plant. The evidence establishes that both firms have a substantial body of support from the represented persons. Further, I am satisfied that the combined resources of Slater & Gordon and Maurice Blackburn & Co are likely to be necessary to efficiently conduct the proceeding and adequately represent the interests of the group members (see s 33T of the Act). It is in the public interest that consideration be given to such matters in a case such as the present if the Court is required to select which of several different proceedings before the Court is to continue as a representative action under Pt IVA.

69 I turn to consider whether the Johnson Tiles and the Dean proceedings should be consolidated under O 29 r 5. The Court's discretion under O 29 r 5 is broad: see Re Ling v Commonwealth of Australia [1995] FCA 1410; (1995) 130 ALR 596 at 600. I have formed the view that consolidation of the Johnson Tiles and Dean proceedings under O 29 r 5 is desirable. There are several applicants in the Dean proceeding. I expect that they include members of the domestic user and stood down worker groups. Johnson Tiles is a member of the business users group. In my view, it is desirable that a member of each group be its representative.

70 Senior counsel for the applicants in each proceeding conceded that the main objective sought to be achieved by consolidation was for both solicitors, Slater & Gordon and Maurice Blackburn & Co, to be solicitors on the record in the consolidated proceeding. Although in the usual course the Rules provide for only one solicitor to appear on the record (see O 4 r 4(1)(c), I am satisfied that there is no reason why two solicitors cannot be solicitors on the record in a proceeding if that course is warranted. Whilst separate representation at trial should not be permitted where there are co-plaintiffs (see Lewis v Daily Telegraph Ltd (No 2) (1964) 2 QB 601 at 612) having two solicitors on the record in the present case will not have that result as there is agreement that they are to jointly engage one set of counsel to represent all applicants and group members. In these circumstances, the consequence of both solicitors appearing on the record as a result of consolidation is not a factor which warrants refusing to order consolidation of the two proceedings. If, in the future, a question arises as to separate representation by reason of the fact that there are two solicitors on the record then that question will be able to be resolved by the Court in a manner which avoids injustice or unfairness to Esso or the represented persons. At the present time the fact that such a problem may theoretically arise is not sufficient reason to refuse the application for consolidation.

71 Senior counsel for Esso submitted that if I made an order for consolidation there should only be one address for service. I accept that that should be so and propose to direct that the two solicitors nominate one address for service.

72 In all the circumstances, I am of the view that consolidation of the Johnson Tiles and the Dean representative proceedings is appropriate. For the reasons set out above the consolidated proceeding is to be the only proceeding which is to continue as a representative proceeding under Pt IVA.

Conclusions

73 I propose to make orders to the following effect:

(a) In the Johnson Tiles proceeding and the Dean proceeding:

(i) the proceedings be consolidated;

(ii) Messrs Slater & Gordon and Maurice Blackburn & Co be solicitors on the record in the consolidated proceeding on condition that until further order they nominate only one address for service and engage one set of counsel to represent the applicants and group members;

(iii) the applicants be granted leave to amend the application and the statement of claim in accordance with the amended statement of claim filed on 7 December 1998, the submissions for the applicants filed on 9 December 1998 and these reasons for judgment;

(iv) upon the serving and filing of the amended application and the amended statement of claim within seven days, the notices of motion dated 29 October 1998 given by Esso Australia Ltd be dismissed;

(v) Esso Australia Limited pay the applicants' costs of and incidental to the notice of motion;

(vi) adjourn the giving of further directions in the consolidated proceeding to 9.30am on 22 February 1999;

(vii) liberty to apply be reserved;

(b) In the Pietrobuono proceeding:

(i) the proceeding no longer continue as a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) and until further order prosecution of the proceeding be stayed;

(ii) the notice of motion given by Esso Australia Ltd dated 29 October 1998 otherwise be dismissed;

(iii) each party is to bear its or his costs of and incidental to the notice of motion dated 29 October 1998;

(iv) liberty to apply be reserved.

74 In addition to ordering that the Pietrobuono proceeding not continue as a representative proceeding under Pt IVA, I also propose to order that the proceeding be stayed until further order. As I am presently of the view that, prima facie, multiple proceedings against Esso should not be prosecuted simultaneously in relation to the loss suffered as a result of the September stoppage at this stage, it is appropriate to stay the further prosecution of the Pietrobuono proceeding until further order. It may well be that some individuals, including Pietrobuono, will opt out of the consolidated representative proceeding after notice has been given to group members. If that occurs consideration can then be given to whether Pietrobuono's proceeding or any other proceeding should be permitted to continue prior to the resolution of the consolidated representative proceeding.

75 In respect of costs it seems to me that Esso has been unsuccessful in its application to the Court to bring to an end the representative proceedings commenced against it. The applicants in the Johnson Tiles and the Dean proceedings have been successful in obtaining the orders they sought. In those matters costs ought to follow the event.

76 Although an order is to be made on the motion of Esso in the Pietrobuono proceeding that that proceeding no longer continue as a representative proceeding, that was only one aspect of the contest between Pietrobuono and Esso. Esso did not succeed on other aspects of its motion against Pietrobuono. In all the circumstances it seems to me that each of the parties should bear its or his own costs of the motion in the Pietrobuono proceeding.

77 A number of the detailed submissions, which were made by senior counsel on behalf of Esso, were critical of certain aspects of the proposed amended pleading in the Johnson Tiles proceeding. However, senior counsel's challenge was to the validity of the proceeding as a representative proceeding rather than to pleading issues which are more appropriate for determination as a separate issue. In these circumstances, the granting of leave to the applicant to amend the application and the statement of claim in the manner indicated in my proposed orders is to be without prejudice to the right of Esso to raise such issues, as may be advised, in respect of the pleadings in their amended form.

78 An issue also arose as to whether Esso Australia Resources Ltd is to be treated as a party to the Johnson Tiles or the Dean proceedings. That company is not a party to either proceeding. In the course of argument senior counsel for Esso did not indicate resistance to appropriate orders joining the company if proper application was made for its joinder: I have dealt with the present motions on the assumption that that situation has not changed. Of course, if the proposed joinder is resisted or does not occur that may require reconsideration of my proposed orders in the Pietrobuono proceeding as at present that is the only proceeding under Pt IVA against Esso Australia Resources Ltd.

I certify that the preceding two hundred and thirty-three (233) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Associate:

Dated:

VG 519 of 1998:

Counsel for the Applicant:	Mr J Burnside QC Mr H Borenstein and Mr I Waller
Solicitor for the Applicant:	Slater & Gordon
Counsel for the Respondent:	Mr J Middleton QC Mr M Derham QC Mr A Kelly and Mr G Harris
Solicitor for the Respondent:	Middletons Moore & Bevins
Date of Hearing:	26 November 1998
Date of Judgment:	5 February 1999

VG 524 of 1998:

Counsel for the Applicant:	Mr J Burnside QC Mr H Borenstein and Mr I Waller
Solicitor for the Applicant:	Maurice Blackburn & Co
Counsel for the Respondent:	Mr J Middleton QC Mr M Derham QC Mr A Kelly and Mr G Harris
Solicitor for the Respondent:	Middletons Moore & Bevins
Date of Hearing:	26 November 1998
Date of Judgment:	5 February 1999

VG 526 of 1998:

Counsel for the Applicant:	Mr R Robson QC Mr M Hines Mr A Rodbard-Bean and Ms R Cantley-Smith
Solicitor for the Applicant:	Harry Nowicki & Co
Counsel for the Respondent:	Mr J Middleton QC Mr M Derham QC Mr A Kelly and Mr G Harris
Solicitor for the Respondent:	Middletons Moore & Bevins
Date of Hearing:	26 November 1998
Date of Judgment:	5 February 1999