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IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION No. ;21 (f ~6 of 1993 1. TOBACCO IIdSZT1'CTTB OF AUSTRALIA 2. LIIvIIZBD (A.C.N. 005 498 359) Plaintiff The plaintiff was at all material times a duly incorporated oorporatioa. So far as relevant, the memorandum of association of the plaintiff provides that the STEPHE'N wOODwA *,*;D Defendant objects for which it i.ycluctZ. the foll~ to .. f.:.L .•.~K ; ~y. (i) p~~ ..•.. :Ft-.a:. ~'Yl -e~ M a l 2r.l • STATffiNSNT OF CLAIIM CLAYTON UTZ Solicitors Levels 27-35 No.1 O'Connell Strxt SYDNEY NSW 2000 DX: 370 Sydney Tel: 353 4000 Fax: 2517832 Ref: 150/956260 t /. /[ tobacco iadus ~try in Australia by the public, by all levels of Goverameat and of public admfnisttadoa ~; and by other . authorities, institutions or associatfons whether public or private. rii) to represent and to assist the tobacco industry in Australia in the legitimate 1SOMS12EC1 ISSUE 45 APPENDIX C

2. maintenance, support and furtherance of its interests. (iii) to tabe part in, carry on, develop and awourage, stimulate and aid research into tobacco and its products, into smoking and into any type of enirironmentat.factor which may affect human bealth and to do so by way of direct participation or by providing or contributing to funds to enable su, h research to be underW= by others or in such other manner as may ser-s desirable. (Iv) to engage in discussions and negotiations with and to determine or assist in the determination of matters of policy by or for all or any authorities, insdtutions or associations, whether Governmental public or private on matters rdating to or affecting directly or indirectly any of the foregoing matters. 3. The main bu.:-.ness and activity of the plaintiff is the advancement of the objects set out above. :, 4. The membership of the plaintiff is and at all material times has been comprised of the three manufacturers of cigarette and tobacco products in Austcalia. S. The plaintiff was the respondent at first instanee and the appellant on Appeal in proceedings instituted by Australian Federation of Consumer Organizations Inc in the Federal Court of Australia on 11 June 1987 being proceedings numbered 0253 of 1987 (the 'Proceedings"). 6. The defendanf was at all material times eagaged in uade.or commerce within the meaning of the Fair Trading Act (NSW) 1987 fn that the defendant by way of business or profeuional activity: O is the co-author of the book "Tobacco L.itigation"; (ii) is a consultant to Cashman & Partners the solicitors for Australian gSOMS1Z.BC1

3. Federation of Consumer Organisations Inc. (iii) is a consultant In connection with the provision of support services for litigation including in eonnection with scientific matters; (iv) is a consultant in relation to dealing with the media; (v) is a consultant in relation to advocacy matters; (vi) is a consultant in matters of Government and Public Affairs; (vii) is Executive Director of Action on Smoldug and Health Limited; (viii) is a Director of the Cancer Council NSW; ('~x) is a member of the Public Affairs and Behavioural Committee of the Australian Cancer Society; (x) is a prominent spokesperson against smoking; : 7. On 17 December 1992 and 10 March 1993 respectively the Full Court of the Federal Court of Australia published Reasons for Judgment and Supplementary Reasons for Judgment in the Proceedings. 8. Between 17 December 1992 and 8 January 1993 the defendant made certain statements in the media, which represented and inferred the following: () Th:.: the Full Court decision has confirme3 Judge Morling's factual findings that passive smoking is dangerous in ~at it causes lung cancer and respiratory disease in young children. Patsiculars 2GB Ne" • 17 December 1992 (ii) That the Full Court concluded or confirmed that passive smoking is dangerous in that it causes lung cancer and respiratory disease in young children. - Particulars . ~ 2GB News - 17 December 1992 ~, (iii) That It would be false and misleading for the Tobacco Institute to assert 1S0MS12.EC1

4. that the Full Court did not confirm that passive smoking is dangerous in that it causes lung cancer and respiratory disease in young children. Particulars , 2GB News - 17 December 1992 (tv) That it would be false and misleading for the Tobacco Institute to assert that there was a disagreement as to whether passive smoking causes lung cancer or respiratory disease In young children. PaT6culars 2GB News - 17 December 1992 (v) That all of the medical and scientific evid:nce in relation to passive smoking is to the effect that passive smoldng c:auses lung cancer and respiratory disease in young children. Particulars The World Today - 2BL Nationa1-17 December 1992 That there Is no medical or scientific evidence In relation to passive smoking which reports no increase in risk for lung cancer or respiratory dismsE in young children. , Ps-ticulals The World Today - 2BL National - 17 Decemb x 1992 (vii) That there is no medical or scientific evidence which suggests that passive smoking may not cause lung cancer or respiratory disease in young children. ParticulM3 The World today - 2BL National • 17 December 1992 (viiu') Thr? the Full Court made findings which established withoui doubt that pas..?vc smoking causes lung cancer and respirs{iory disease in young children. ± iSOMSi2.BCi

5. ParticLl rn Sarah Henderson - 2BL - 17 December 1992 ('ix) That the Pull Court well and truly established as a fact that passive saroking causes lung cancer and respiratory disease in young children. ParIS'ulars Sarah Henderson - 2BL - 17 December 1592 (x) Tb2t the Full Court had regard to all of the available scientific information concerning passive smoking and disease. EaWculars Sarah Henderson - 2BL - 17 December 1992 (xi) Th^t the Full Court found or concluded that passive smoking caused respiratory disease in young children and was aa important cause of lung Can.:-„rr in non smokers. ~. Particulars Sarah Henderson - 2BL - 17 December 1992 Fewings File - SAA - 18 December 1992 (xii) That the Full Court found or concluded, with certainty, that indoor smoking increased the:fsk of non smokers contracting respiratory disease in yvung children and lung cancer. Particulars gaaah Henderson - 2BL - 17 December M-2 Fewings File - SAA 18 December 1992, (xiii) Tbat the Full Court made findings in relation to the lack of credibility of the witne3ses who gave evidence on behalf of the Tobacco Institute in the Proceedings• Particulars Sarah Henderson - ZSL - 17 December 1992 tsoUsu.= , ao tft dn ~ ~

6. ~ (xiv) That the Full Court concluded or confir3ned `hat passive smoking cauxs lang cancer and respiratory disease. ^ J!Arficulau Herald-Sun Melbourne 17 December 1992 (xv) That a final report issued in early January 1993 by the United States Environmental Protection Agency in the United States of America has ecRcluded that heart disease is caused by passive smokiag. Particutats Murray Olds - 2UE - 8 January :99' s (xvi) That a final report issued in early January 1993 by the United States Environmental Protection Agency in the United States of America made findings that the evidence that has accumulatcd since 19861inking heart disease with passive smoldng is conclusive. Particu]ars Murray Olds - 2UE - 8 January 1993 9. The conduct ; tnz defendant referred to in paragrarh 8.bove was conduct in trade ~ or commerce within the meaning of Section 42(1) of eha ?air Trading Act (NSW) 1987 by reasc;n of the matt,cis referred in paragraph 6 above and because the reprexatations referred to in paragraph 8 above were calculated to affect the business of cigarette manufacturera, importers, distri'butors and retailers and the conduct of cigarette consumers. 10. In fact, C) The:=,uli Court decision did not confirm Judge elorling's factual findings that ;assive smoldng is dangerous in that it cau::6 lung cancer and , respiXatory disease in young children. P (Ii) The Full Court did not conclude or coafirm that passive tmoldng is . iSOMSiZ.ECl

7. dangerous in that it causes lung cancer and respiratory disease in young childrea. (iii) It ~rould not be false and misleading for'-the '"obacco Institute to assert tha.t the Full Court did not coafirm that passia e smoldng is dangerous in thnt it causes lung cancer and respiratory disease in young children. (1v) It :vould not be false and misleading for the Tobacco Institute to assert that there was a disagreement as to whether passive smojdng causes lung cancer or respiratory disease in young children. (v) Nc, all of the medical and scientific evidazce,in relation to passive szn..ildng is to the effect that passive smoldng mausea lung cancer and respiratory disease in young children. ;: (vi) Not all of the rnedical or scientific evidence in rdation to passive amn]dng reports an increase ia risk for lung cancer or respiratory disease in voung children. (vii) Z'h&e is medical or scientific evidence which suggests that passive am•:king may not cause lung cancer or re•=puatory disease In young chi'.Irr:a. ' ( The Full Court did not make findings which established without doubt that. passive smoldng causes lung cancer and respiratory disease in young ehildren. . , . .: ('ix) The Full Conrt did not well and truly establish as a fact that passive smo':dng causes lung cancer and respiratory disease 3n young children. . t. (x) The~Ful1 Court did not have regard to all of th ~ available scientific ; infoimation concerning passive saw]dAg aad dlaease. . F tsoMSiZ.sct ~ :. . .. O . G~ m

8. (xi) The Full Court did not find or conclude that passive smoYing caused respiratory disease in young children and was an important cause of lung cancer in non smokers. I I N) T!+e Full Court did not find or conclude, with certainty, that indoor sr^oldng increased the risk of non smokers contracting respiratory disease in 'young children and lung cancer. The Full Court did not make findings in relation to the lack of credibility of the witnesses who gave evidence on behalf of the Tobacco Institute in the Proceedings. (xiv) The Full Court did aot conclude or confirm that passive smokiiag causes ivng cancer and respiratory disease. (xv) T.; s:inat report issued in early January 1991 by United States E:ivi_*onmental Protaxioa Agency in the Uai 'id States of America has not ccmcluded that heart disease is caused by passive sinoldng. The final report issued in early January 1993 by United States Environmental Protection Agency ia the United States of America did not find that the evidence that has accumulated since 1986 linldng heart . disease with passive smoking is conclusive. . ii. By reawn c1 the matters set out in paragraph 10 ubovcthe conduct of the defendant was misleac;ing or decxptivG or likely to mislead or dapive within the meaning of Sactioa 42 pf the Fair Trading Act (NSW) 1987. , " .,. 1. A declarattc~t that each of the representations set out in paragraph 8~s nuslesdiag tsoMStZ.ECs

9. or deceptive ;r likely to mislead or deceive within the cuauing of Section 42(1) of the Pair Trawng Act (NSW) 1987. 2. An order ~restraining the defendant from: (a) broadcasting, transmitting, disseminating or publishing; or (b) ca,.,sing, procuring. permitting or arranging for the broadcasting, tra?smisaion, dissemination or publication through the medium of radio, tO_viyion, motion picture or audio visual.eass ;ttes or newspapers, periodicals or other publication or by mea.na c-: any other form of advertising or promotion; any of the represeatadons set out in paragraph 8 above In trade or commerce including in the course of the defendant's activities as: (1) a consultant to Cashman & Partners the solicitors for Australian Federation of Consumer Organisations Inc. (ii) a consultant in connection with the provision of support services for 1idAation including in connection with scientific matters; (iii) a c.,:asaltant in relation to dealinP with the melia; .. , , r. (iv) a caasultant in relation to advocacy matters; 1 (v) a consultant in matten of Government and Public Affairs; (vi) Executive Director of Action on Smoldng and Health Limited; (vii) a Director of the Cancer Council NSW; (viii) a member of the Public Affairs and Behavioural Committee of the Au:tralian Cancer Society;. (ix) a spolwperson against unoldng; 3. An order und~pr Section 65(1) of the Fair Trading Act OW) 1987 that the defeadaat publish or cause to be publish at the expenie 61 the defendant tuch advertisement through such media as to the Court may seem appropriate to correct each of the rqraeatations referred to in paragraph 8 above. iSOMSU.Mi ,

10. 4. Interest pursuant to Section 94 of the Supreme Court Act, 1970. 5. Such further=or,other, oorders as the Court may deer.~ fit. :i 6. Costs. To the Defeadasrt: Stephen Woodward of: 2A 8 Hampden St;eet PADDINGTON NSW 2021 You are liable to :uffe- judgment or an order against you unless t:ic prescribed form of aotioe of your appearaace is received in the Registry withia 14 days aftr' service of this Statement of Claim upon you ana you comply with the rules of Court relatiuiS to your defence. M 1SOMS12.BC1 -j Q CA j 0 ~