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Re Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc [1992] FCA 630; (1992) 111 ALR 61 (1992) 24 IPR 529 (1992) 38 FCR 1 (17 December 1992)

FEDERAL COURT OF AUSTRALIA

Re: TOBACCO INSTITUTE OF AUSTRALIA LIMITED And: AUSTRALIAN FEDERATION OF CONSUMER ORGANISATIONS INC.

No. G217 of 1991 FED No. 962 Number of pages - 146

Trade practices (consumer protection) [1992] FCA 630; (1992) 111 ALR 61

(1992) 24 IPR 529

(1992) 38 FCR 1

COURT

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION Sheppard(1), Foster(2) and Hill(3) JJ.

CATCHWORDS

Trade practices (consumer protection) - misleading or deceptive conduct - advertisement dealing with effects of environmental tobacco smoke on non-smokers (passive smoking) published in several newspapers each having substantial circulation - purport of advertisement that passive smoking not shown to be harmful to health of non-smokers - only consideration, tolerance and mutual respect - whether statements in advertisement that there was little evidence and nothing which proved scientifically that cigarette smoke causes disease in non-smokers misleading or deceptive - whether advertisement published "in trade or commerce" - whether injunctive relief warranted - proper construction of advertisement - consideration of types of persons to whom advertisement directed - analysis of complex scientific, medical and statistical evidence.

Trade Practices Act 1974, s.52

HEARING

SYDNEY 17:12:1992

Counsel for the Appellant: Mr. B.S.J. O'Keefe, QC,

Mr. S.P. Charles, QC and Mr. B.W. Walker

Solicitors for the Appellant: Clayton Utz

Counsel for the Respondent: Mr. N.F. Francey

Solicitors for the Respondent: Cashman and Partners

ORDER

THE COURT ORDERS THAT the matter stand over to a date to be fixed for argument on relief and costs and for consideration of the question whether the appellant should be granted leave to rely on a fresh submission based on the decisions of the High Court of Australia in Australian Capital Television Pty. Limited v. Commonwealth of Australia [1992] HCA 45; (1992) 108 ALR 577 and Nationwide News Pty. Limited v. Willis [1992] HCA 46; (1992) 108 ALR 681. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

Introduction SHEPPARD J. This is an appeal from a judgment of a judge of this Court (Morling J.) delivered on 7 February 1991 in an application in which the respondent sued the appellant for breaches of s.52 of the Trade Practices Act 1974 ("the Act"). On 15 April 1991 the learned primary Judge made orders giving effect to his reasons for judgment. The substantive orders which were made restrained the appellant from engaging in certain conduct including publishing, in trade or commerce, the advertisement which was the basis for the respondent's action. His Honour also restrained the appellant from making a number of statements in terms of those used in the third paragraph of the advertisement and from making statements that conclusions drawn in a certain scientific article were based on particular statistical detail. His Honour also ordered that the appellant pay the respondent's costs on what may be described as an indemnity basis. In the submission of the appellant, the respondent's application to this Court should have been dismissed with costs. Alternatively it was submitted that the case was, in any event, not one for injunctive relief. It was further submitted, that whatever the outcome, it was inappropriate to order costs on an indemnity basis.

2. The respondent, in order to succeed, needed to establish that the advertisement was published in trade or commerce, that being one of the requirements of s.52 of the Act. His Honour found that it was, but his finding in that respect is the subject of substantial challenge in the appeal. In the submission of the appellant there was insufficient evidence to warrant his Honour's conclusion that the advertisement was published in trade or commerce.

The Advertisement and its Circulation 3. The advertisement was published in a number of Australian newspapers on 1 July 1986. It was published prominently. For instance, the advertisement which appeared in the Sydney Morning Herald occupied half of page 8 of the newspaper for that day. The heading of the advertisement was in large bold type which said, "A Message from Those Who Do ... to Those Who Don't." Unquestionably the heading was intended to catch the eye of the reader of the newspaper and would have achieved its object in most cases. The advertisement was said to have been authorised by John Dollisson, Tobacco Institute, Goldfields House, Sydney. There is no issue between the parties that the Tobacco Institute referred to was the appellant. The

subject matter of the advertisement may be generally described as passive smoking. Its message was that, although non-smokers might suffer annoyance and discomfort as a consequence of persons smoking in their presence, the problem was no more than that. It was to be solved by tolerance and mutual respect of smokers and non-smokers for each others' rights. It was not to be solved by legislation. The clear purport of the advertisement was that environmental tobacco smoke i.e. smoke exhaled by persons smoking cigarettes or smoke escaping from cigarettes others were smoking - sidestream smoke - was not injurious to the health of non-smokers.

4. The respondent's case was based entirely on the third paragraph ("para. 3") of the advertisement which said:-

"And yet there is little evidence and none which proves scientifically that cigarette smoke causes disease in non-smokers." 5. It was that statement which was said to be misleading or deceptive. His Honour found that it was misleading and deceptive to say that there was little evidence that cigarette smoke caused disease in non-smokers and that it was also misleading and deceptive to say that there was nothing which proved scientifically that cigarette smoke caused disease in non-smokers.

6. Although the critical paragraph of the advertisement is the third, that paragraph ought not to be read in isolation. It needs to be read in the context of the whole of the advertisement. Rather than set the advertisement out in these reasons, I have appended a copy of it to them. The copy I have appended is a facsimile copy of the advertisement which appeared in the Sydney Morning Herald. It gives some idea of the prominence with which the advertisement was displayed. It is to be observed that the advertisement is printed in reasonably large type - larger than the ordinary newsprint used in the newspaper - and that part of the advertisement, although not the third paragraph, is printed in bold type.

7. The Sydney Morning Herald is a leading newspaper published principally in New South Wales but with circulation in other States and in the Territories. It is a matter of record that its circulation is of the order of 250,000 each day. It is unlikely that its readership would be less than 500,000. Other newspapers in which the advertisement was published included The Australian, The Australian Financial Review and the Daily Telegraph which then circulated principally in New South Wales. The advertisement was also published in The Age, which circulates principally in Victoria, but the advertisement was not published in that newspaper until 6 January 1987. The accumulation of this evidence leads to the conclusion that the reach of the advertisement was substantial. The potential number of readers must have amounted to many hundreds of thousands of persons. Newspapers are read by people across the whole spectrum of society. They are read by almost all age groups. Those in their middle and senior school years read them as do university students and students attending other places of tertiary education. They are read by the well educated and the poorly educated. They are read by the intelligent and the wary and also by the unsuspecting, the gullible and the impressionable. It is unnecessary to go on. Clearly those responsible for the advertisement intended that it should have the widest possible impact across all sections of society. Its message, as I have said, was, "There is no health hazard in being in the presence of a smoker. The only problem is one of tolerance, forebearance and understanding."

The Meaning of the Advertisement 8. A commencing point for the resolution of the issues in the appeal is to reach some conclusions about the meaning and effect of para. 3. Although it alone is relied upon by the respondent, it must be read in context. It is not appropriate to take part of an advertisement such as the one in question here and endeavour to ascertain in isolation the meaning of each of the critical words or phrases which is used. Rather an attempt should be made to measure the veracity of its message by reading it in context. One needs also to take into account the fact that many readers would not make a close study of the advertisement but would read it fleetingly and absorb its general thrust. On the other hand, others would be likely to read it more carefully. These would include persons directly touched by the problem. Such a person might be a smoker concerned at suggestions by non-smoking members of his or her family, fellow workers or friends that smoking in their presence would be deleterious to their health and not just an annoyance. The advertisement would

provide a base upon which a non-smoking wife might be persuaded by her smoking husband that his smoking posed no threat to the health and well being of their asthmatic child or indeed to the wife herself. Office or factory workers who were smokers might seek to use the advertisement to persuade management that it ought not submit to requests by their non-smoking colleagues to make buildings or parts of buildings non-smoking areas. The possibilities are limitless, but it ought to be inferred that possibilities such as I have envisaged were contemplated by the advertiser and that one of the purposes of the advertisement was to enable it to be used by smokers as ammunition to persuade others that their habit was not dangerous to the health of anyone except perhaps their own.

9. The advertisement in question related to a matter affecting the well being and health of the nation. Plainly the public interest was very much involved. Those responsible for the advertisement were under a heavy responsibility to be accurate about what was said in it. The advertisement ought to be strictly construed. It should not be given any benevolent construction favourable to the advertiser. Although words ought to be given their ordinary English meaning it needs to be recognised that some words or phrases will be capable of having more than one meaning. This is not a case of resolving such a problem by deciding that one particular meaning is the appropriate one. Rather, it is a case of ensuring that due allowance is made for the fact that different persons, each reading the advertisement reasonably and according to ordinary English usage, may reach different conclusions as to the meaning of particular expressions. Each of these possible meanings has to be allowed for. If one is misleading or deceptive there will be a breach of the Act, notwithstanding that the other meaning, if it were adopted, would not be untrue.

10. There was much discussion during the argument about whether the statements in the third paragraph were statements of fact or opinion. It was the submission of counsel for the appellant that no reader could reasonably think that the statements were otherwise than statements of opinion. I would reject that submission. I think that some readers may have taken that view. But it would equally be open to others to conclude that the advertiser was making factual statements about the state of the evidence and the state of scientific proof. I do not think that the point needs to be dwelt on, but I am reinforced in my conclusion by later statements in the advertisement which plainly are statements of fact. Reference is made to findings from the Institute of Cancer Research in England and its conclusions. Reference is also made to a study by a Vice-President of the American Cancer Society and to research at the Harvard School of Public Health. All those statements are statements of fact. So is the statement that major reviews on passive smoking over the last few years have concluded that passive smoking cannot be shown to be a health risk and also the reference to the remarks made at the 1984 Vienna Health Conference. In my opinion, all these statements, following as they do para. 3 of the advertisement, are intended to provide the reader with factual support for the general statements made in the third paragraph. The presence of these later statements leads me to think that the better view is that the statements made in that paragraph are statements of fact, but it is enough for present purposes to say that it was open to readers to infer that they were and to conclude that a significant number of readers would have so read them.

11. What in essence are those statements? They are:-

(a) There is little evidence that cigarette smoking causes disease in non-smokers. (b) There is nothing (i.e. no evidence) which proves scientifically that cigarette smoke causes disease in non-smokers. 12. In order to arrive at a conclusion on what those statements mean, it is necessary, tedious though the exercise be, to consider the meaning of each of a number of words and expressions. The words are, "evidence", "proves", "scientifically", "causes" and "disease". The expressions are "little evidence ... that cigarette smoke causes disease" and "nothing (i.e. no evidence) which proves scientifically that cigarette smoke causes disease".

13. The dictionary meanings to which I shall refer are from The Oxford English Dictionary, 2nd ed. (1989). Some of the words - "evidence", "proves" and "causes" - have well understood meanings in the law. Their legal meaning or their legal significance is referred to in dictionaries. But that is not the meaning to be

ascribed to them here. They should be given the ordinary meaning which they have when they are used in the general run of English expression whether written or oral.

14. "Evidence" is the quality or condition of being evident. It may be an appearance from which inferences may be drawn and thus an indication, mark, sign, token or trace. It also constitutes a ground for belief and it may be testimony or facts tending to prove or disprove any conclusion.

15. "Prove" may mean to make a trial of or to test. It may also mean to establish something as true, to make certain, to demonstrate the truth of by evidence or argument. Another meaning is to show the existence or reality of. "Proof" is that which makes good or proves a statement such as evidence sufficient or contributing to establish a fact or produce a belief in the certainty of something. "Scientifically" is a reference to something being done in a scientific manner i.e. according to the laws of science or by means of scientific or demonstrative reasoning. It is also a reference to something being done systematically, methodically or thoroughly. "Scientific" may mean the producing of knowledge or something which is demonstrative.

16. "Cause" used as a noun is that which produces an effect, i.e. that which gives rise to any action, phenomenon or condition. Cause and effect are correlative terms. When used as a verb, "cause" may mean to effect, to bring about, to produce or induce. It has other meanings, but they are not relevant.

17. Finally, "disease" is a condition of the body, or of some part or organ of the body, in which its functions are disturbed or deranged. It is a morbid physical condition, a departure from the state of health especially when caused by structural change.

18. With those various meanings in mind, it is now possible to come to the meaning of the critical expressions used in the advertisement. The first is the statement that there is little evidence that cigarette smoke causes disease. The use of the word "little" acknowledges that there is some evidence but the author of the advertisement is intending to give the impression that such evidence as there is not of great weight or consequence. Evidence in this context means, in my opinion, either an indication from which inferences may be drawn or facts tending to prove, in this case, that passive smoking causes disease in non-smokers. It is clear because of the distinction which the advertisement itself draws between evidence and scientific proof, that "evidence" is not being used in the sense of proof. The advertiser was not prepared to say that there was no evidence but contented himself with an expression which suggested that there was hardly any evidence i.e. facts which would tend to prove a causal link between environmental tobacco smoke and disease. That is, I think, the meaning which most people would ascribe to the expression but it would be open to a reasonable reader, using the alternative meaning of "evidence" to conclude that the advertisement meant that there was little indication of a causal link between passive smoking and disease. The two meanings may not, in practical terms, be very different.

19. The second expression is that there is nothing which proves scientifically that cigarette smoke causes disease in non-smokers. In the analyses which were undertaken in argument, much attention was paid to the expression "proves scientifically", but not a great deal of attention was paid to the use of the word "nothing" which is critical to the meaning of the expression as a whole. The word "nothing" is to be contrasted with the word "little" used to qualify the word "evidence" in the other statement. It thus becomes emphatic of what is being said and is a significant word to be taken into account in a consideration of the meaning of the expression. The meaning which the advertiser intended to convey was that there was not a thing, not a jot and not a tittle, which would prove scientifically that cigarette smoke caused disease. Thus, as the conclusion of the advertisement indicated, the advertiser intended the reader to believe that members of the community, particularly non-smokers, need have absolutely no concern about the effects of environmental tobacco smoke on their health.

20. The various meanings of "proves", "proof", "scientifically" and "scientific" to which I have referred show that the ordinary meaning of the expression "proves scientifically" is, generally speaking, the demonstration or establishment of something in a scientific manner i.e. according to the ways or methods

of scientists. But it needs to be understood that no field of scientific research is ever still. It continues to develop and, although scientists may speak of something being proved beyond reasonable doubt, they are speaking in terms of the state of scientific knowledge of the day. No doubt all scientists are searching for the ultimate truth but in no field is that found. Sometimes truths thought to have been established by earlier research are falsified by later investigations. That is indeed one of the matters upon which the appellant relies to persuade the Court that it was inappropriate to grant injunctive relief.

21. His Honour's judgment, and also that of Hill J. which I have had the advantage of reading, shows that the question whether passive smoking causes disease in non-smokers is a question upon which scientific research and discussion is continuing. It has been the subject of much research and consideration by many learned people since the advertisement was published. There are those who are satisfied of a causal link and those who are not. But what, in my opinion, does emerge is that a statement made, not to a group of scientists able to make judgments for themselves, but indiscriminately to the whole range of persons in the community, that there was nothing which proved scientifically that passive smoking caused disease in non-smokers was a very large statement indeed. Bearing in mind the circumstances in which it was made, it needs to be closely considered.

22. Subject to the question whether the advertisement was published in trade or commerce, the central question then is whether his Honour's conclusion that the two essential statements made in para. 3 were misleading or deceptive was erroneous. That necessitates a review of some of the evidence and a consideration of a number of the submissions which were made on behalf of the appellant. His Honour considered evidence of the impact of smoking on non-smokers in relation to a number of diseases. These were cancer, particularly lung cancer, respiratory diseases in young children, asthma and otitis media, an inflammation of the middle ear sometimes called "sticky" or "glue" ear. The question whether passive smoking could cause or might cause cancer became the pivotal issue in the case. More time and more witnesses were called in relation to this matter than any other. But it is not the matter to which I shall first attend. I think it preferable to consider asthma first of all. Asthma

23. His Honour's conclusion in relation to asthma was ((1991) 27 FCR 149 at pp 264-5) that he was satisfied that the respondent had established that the statement made in para. 3 of the advertisement was misleading and deceptive insofar as it applied to the disease of asthma. His Honour said that that was so whether the relevant date be regarded as 1 July 1986, the date of principal publication, or any date thereafter. A principal submission made on behalf of the appellant in challenging his Honour's finding was that the evidence did not establish that smoking or passive smoking caused asthma; its only effect was to trigger symptoms (usually difficulty in breathing) of an underlying and pre-existing disease. It was submitted that, whilst passive smoking might aggravate or exacerbate an asthmatic condition, there was no evidence which established that smoking or passive smoking was responsible for the disease itself.

24. The evidence given in the case about asthma is summarised in his Honour's judgment. The account I give of it comes from that summary. Dr. Breslin said that the standard definition of asthma was paroxysmal generalised airways obstruction which varies spontaneously or as a result of treatment. He said that basically asthma was a narrowing of the airways. Asthma was a disease of the airways and not of the lung tissue. He said that the airways of asthmatics "narrowed down easily". The reason for this was that they were twitchy or hypersensitive. He said that airways narrowed down as a consequence of a variety of stimuli, so that when a person had twitchy airways and episodes of wheeze, chest tightness, shortness of breath and measurable objective changes of their lung function, they had the disease of asthma. Dr. Breslin said that there was a large volume of evidence which confirmed that passive smoking was "a frequent and very troublesome trigger for bronchial asthma in many patients."

25. Professor Phelan said that he thought of asthma "as an inherited predisposition to the development of the condition or disease called asthma." It was an inherited predisposition in the airways. Various trigger factors could lead to narrowing of those airways that resulted in the symptoms of asthma. He said that to him asthma was a disease causing symptoms that interfered with the patient's normal activities. Professor Phelan said that in his view passive exposure to cigarette smoking seemed to have a significant effect on

asthmatic symptoms and that cessation of smoking by parents led to an improvement in asthmatic symptoms in their children.

26. Professor Witorsch, who was called in the appellant's case, drew the distinction above referred to between asthma and an attack of asthma. He said that environmental tobacco smoke did not cause the disease of asthma but that it might produce or exacerbate symptoms in some asthmatics. In relation to the difference between Dr. Breslin and Professor Witorsch, his Honour said (p 262):-

"It seems to me that the difference between Professor Witorsch and Dr. Breslin on the question of asthma is really one of semantics. They appear to agree that environmental tobacco smoke produces symptoms of asthma in some persons. But Professor Witorsch regards smoke as causing attacks of asthma, whereas Dr. Breslin regards it as causing asthma. I gained the impression that Professor Witorsch's experience in this field is much less than Dr. Breslin's. Professor Witorsch conceded that some individuals with asthma may have attacks that are precipitated by environmental tobacco smoke (T 3092). He also agreed that when some asthmatic patients are asked what causes them to have acute attacks of asthma they include environmental tobacco smoke amongst the causes (T 3099). He also agreed that the word 'disease' can be taken to refer to, inter alia, acute disease and latent disease. I think it is difficult to say that an attack of asthma sustained by a person who suffers from an underlying condition of asthma does not constitute an episode of a latent disease." 27. There were some criticisms made by counsel for the appellant of remarks made by his Honour concerning Professor Witorsch, particularly his statement that Dr. Witorsch's experience was less than that of Dr. Breslin. I have considered these, but the evidence which his Honour accepted was a matter peculiarly for him. I have not found the criticisms which were made such as to warrant the conclusion that his Honour fell into error in the way that he approached the evidence of the various witnesses. In any event, so it seems to me, the strength of the attack made by counsel for the appellant on his Honour's findings in relation to asthma lies not in particular criticisms of his findings about the relative reliability of witnesses, but in the proposition that the evidence established that environmental tobacco smoke does not cause the disease of asthma. The most it does is to make it symptom producing in some persons. It followed, so counsel submitted, that the two critical statements in the advertisement, so far as they might be thought to have applied to asthma were, not only not shown to be false; they were true.

28. Earlier I referred to the dictionary meaning of disease as a condition of the body, or a part or organ of the body, in which its functions were disturbed or deranged. When asthma becomes symptom producing, that is what occurs. A part or organ of the body - its breathing passages - does not function as it should. Breathing passages are disturbed or deranged because they become narrower or are occluded. The patient finds it very difficult - sometimes impossible - to breathe. The occurrences are not always reflected in mere temporary inconvenience and discomfort. They can lead to substantial debility and even death. They will not infrequently require a period of hospitalisation. Certainly medical treatment and medication will be required.

29. What the appellant wants the Court to do is to draw a fine distinction between the underlying condition of asthma and the debility brought about when an asthma attack is triggered by a stimulus, in this case, environmental tobacco smoke. But this is not a distinction which countless readers of the advertisement would actually draw, or be capable of drawing. The appellant would say that, if they acted in this way, they would be acting unreasonably; they would be misleading themselves. But the dictionary meaning of disease to which I have referred shows that this is not so. It may mean the underlying pathological condition and it may mean the manifestation which, in the case of asthma, will often have very much more serious

consequences for the patient than will the condition itself whilst it is quiescent. It may mean the manifestation because the narrowing of the breathing passages will not occur unless it is triggered by a stimulus. It is only then that there will be the disturbance or derangement of the airways, i.e. of the relevant organ of the body.

30. In my opinion his Honour's conclusion that the effect of passive smoking on persons suffering from asthma does not disclose error and ought not be disturbed. The evidence and his analysis of it amply justified him in concluding that, upon the basis of the material about asthma which he had before him, there was much more than a little evidence that environmental tobacco smoke caused the disease of asthma (having regard to the way in which the word "disease" in the advertisement should be understood) and that there was something (in the sense of something substantial i.e. certainly not nothing) which proved scientifically that environmental tobacco smoke could cause asthma in the sense of triggering symptoms or a manifestation of the pathological condition from which a non-smoker was suffering.

Lung Cancer 31. My conclusion in that regard is sufficient to warrant the rejection of the appellant's principal submissions. It is unnecessary, strictly speaking, to consider cancer, respiratory diseases in young children and otitis media. Nevertheless I propose to deal with them. My task in that regard has been lightened by the advantage with which I have been provided by the opportunity of reading the judgment to be delivered by Hill J. In relation to cancer and the question whether or not there is little evidence that environmental tobacco smoke may cause lung cancer in non-smokers, I am in respectful agreement with what he has written. I am also in agreement with the analysis he has made of the evidence about this question. I regret to say that I do not agree with his conclusion in relation to the other critical expression which is in issue, namely, that the advertisement is not misleading or deceptive when it implies that there is nothing which proves scientifically that environmental tobacco smoke causes lung cancer in non-smokers. My reasons for this conclusion are as follows.

32. The case was conducted by the respondent upon the basis of epidemiological evidence and epidemiological studies. The case was conducted by the appellant, not on the basis of epidemiological evidence but on the basis of toxicological evidence and statistical evidence which, if accepted, would have called seriously into question, perhaps even vitiated, the epidemiological studies relied upon by the respondent.

33. As his Honour said (27 FCR at p 163) epidemiology relies on statistical analysis of populations to estimate the incidence of disease amongst those exposed to particular agents. Results are usually reported in terms of odds ratios or relief risk ratios. These reflect the ratio between the frequency of, say, a disease in an exposed group and that in an unexposed group. A risk ratio of 1.0 means that the disease is no more frequent in the exposed group than in the unexposed group. A relative risk above 1.0 is said to be positive and one below 1.0 is said to be negative. His Honour added (p 163):-

"These results can be characterised as being statistically significant or not. Statistical significance is an expression of the relative confidence that a particular result is a true effect and not due merely to chance. The level of statistical significance conventionally used in the scientific literature is the 95 per cent confidence level. If a result, or range of results, is statistically significant at the 95 per cent confidence level then it means that the probability that those results are due merely to chance or random variation is 1 in 20 or less. The reader can be 95 per cent sure that the true effect is the result as reported. Often that result is reported as a range of values clustered around a single value called a point estimate. The point estimate is the best estimate of the relative risk, based on

the available data. The two figures on either side of the point estimate (the upper and lower confidence limits) define the range of values which are also well supported by the data, at the chosen confidence level. This range is known as the confidence interval." 34. The epidemiological studies relied upon by the respondent found a circumstantial link between environmental tobacco smoke and lung cancer; the toxicological evidence relied upon by the appellant did not find a causal link. Furthermore, the appellant's statistical evidence made substantial and, in my opinion, in some cases, telling criticisms of the epidemiological studies and the conclusions drawn from them by the various witnesses. In this way the parties engaged in a head on conflict in which one asserted and the other denied that it was scientifically proved that environmental tobacco smoke caused lung cancer. His Honour apparently felt obliged to determine the case on the basis of the battle which was thus waged.

35. But we need to come back to the statement in the advertisement, "... there is ... nothing which proves scientifically that cigarette smoke causes disease in non-smokers"; in other words nothing which proves scientifically that environmental tobacco smoke causes lung cancer. The advertisement in question was not, and did not purport to be, an objective contribution to scientific debate on the question whether environmental tobacco smoke was deleterious to health. Rather, it was an advertisement designed to persuade people of all ages and from all walks of life that it was quite safe for them to act on the basis that environmental tobacco smoke was not harmful to the health of non-smokers in their presence, the only problem being discomfort and annoyance, a problem solved by tolerance, understanding and mutual respect for the rights and feelings of each group. One can confidently draw the inference that the advertisement was not intended as a contribution to a scientific debate because of the fact that it was inserted in so many newspapers each having a wide and general circulation. To the broad range of readers that the advertisement was intended to reach the message was that there was nothing which proved scientifically that cigarette smoke caused disease (lung cancer) in non-smokers. If the advertiser had wished to engage in an objective scientific debate or balanced public discussion of the problem, it might have been expected that he would have drawn attention to the fact that there were the epidemiological studies, all of which were well known, but that they should be discounted because they were statistically unsound and also because the results were not supported by any toxicological evidence. But the advertiser elected not to approach the matter in this way. He was content to say that there was nothing which proved the matter scientifically. Despite its inexactitude, epidemiology is a science. It is well recognised and many epidemiologists are people of great distinction. The epidemiological studies which there are, and which existed prior to the publication of the advertisement, cannot be dismissed as "nothing". If the issue were what ultimate conclusion should be drawn, there might be something to be said for both sides simply because research in the matter was continuing in 1986 and continued on thereafter. But one cannot justify the making of a statement in 1986, a statement which many people would have read as a statement of fact, that there was nothing which proved the matter scientifically. On the contrary there was a large body of epidemiological material and opinion, of a circumstantial kind though it may have been, which suggested strongly that there was in fact a causal link between environmental tobacco smoke and lung cancer. It is for that reason that I consider that the statement that there was nothing that proved the matter scientifically was misleading or deceptive. I would therefore reject submissions made by counsel for the appellant to the contrary. Otitis Media and Respiratory Diseases in Young Children

36. That leaves otitis media and respiratory diseases in young children. I am in respectful agreement with Hill J. in relation to the former and would not wish to add anything to what he has said. In relation to respiratory diseases in young children, the matter is already covered by what has been said about asthma. Insofar as other respiratory diseases are concerned I detect no error in the conclusions of the learned primary Judge. It is another instance where the evidence which his Honour accepted established that the statements of "little evidence" and "nothing which proves scientifically" are misleading or deceptive.

Trade or Commerce 37. The next question to be determined is whether the advertisement was published in trade or commerce. Unless it was, s.52 of the Act has no application to it. I begin my discussion of this aspect of the case by saying that I fail to understand why the respondent (the applicant before his Honour) chose to leave the

evidence about the question in such a vague and unsatisfactory state. That is particularly so when one takes into account that at one stage, his Honour alerted counsel for the respondent to possible problems about the sufficiency of the evidence upon the question.

38. It was only after comments were made by members of this Court during the course of the argument before it about the paucity of the evidence, that counsel for the respondent decided to make a belated application for leave to lead fresh evidence on the point. The application was heard and the Court's decision on it reserved. Having considered it, I am firmly of the view that it ought to be rejected. The principles which apply are those propounded by the High Court in Commonwealth Bank of Australia v. Quade [1991] HCA 61; (1991) 65 ALJR 674; see also Greater Wollongong City Council v. Cowan [1955] HCA 16; (1955) 93 CLR 435. It is true that this is public interest litigation, but that of itself provides no reason why the ordinary principles should not apply.

39. The material before his Honour consisted of a paragraph of the statement of claim which was admitted in the defence, the fact that the advertisement was inserted by a corporation, the fact that the advertisement concerned an article of commerce, namely, cigarettes, and the circumstance that the purpose of the advertisement was to persuade members of the public that environmental tobacco smoke did not adversely affect the health of non-smokers. The advertisement was inserted in a number of newspapers each having a substantial circulation in at least one or the other of Australia's two most populous States, New South Wales or Victoria.

40. His Honour's conclusions on this aspect of the case were (27 FCR at p 157):-

"Cigarettes are articles of commerce and restrictions on their use by consumers may render them less attractive as such, resulting in adverse economic consequences for their manufacturers and distributors. No doubt the participation by a trading corporation in a debate on a matter of public or social controversy will often not be conduct in trade or commerce. But the publication of the advertisement in the present case should not be viewed in isolation. It was published by a trading corporation which, so it may be safely inferred, was concerned to ensure that the sale of cigarettes would not be adversely affected by a belief on the part of the public as to a possible causal link between cigarette smoke and disease in non-smokers. The existence of such a link, or of evidence suggesting it, could affect the sale of cigarettes in various ways, for example, public pressure to restrict the smoking of cigarettes in places where non-smokers are present. The advertisement had the potential, and was no doubt intended, to protect the commercial interests of cigarette manufacturers and distributors. Accepting that conduct 'in trade or commerce' is confined to conduct which is itself an aspect of activities which, of their nature, bear a commercial character I think the proper conclusion is that the publication of the advertisement was conduct 'in trade or commerce'. Advertising products for sale is an aspect or element of the selling of those products. The selling of the products is indisputably a trading or commercial activity. Advertising may serve a number of purposes. One purpose may be to refute criticism of the seller's products thus protecting the market for them. The advertisement published by the respondent was calculated to achieve such a purpose."

41. It is not apparent to me why his Honour concluded - really assumed - that the appellant was a trading corporation. Perhaps the matter was not the subject of dispute at the trial. Before us counsel for the appellant contended, in my opinion correctly, that there was no evidence on the question. We were referred to para. 1 of the statement of claim which alleged that the respondent (now the appellant) was at all material times a corporation within the meaning of the Act able to be sued in its corporate name and style. That allegation was admitted in para. 1 of the defence. "Corporation" is defined in s.4 of the Act as follows:- "'corporation' means a body corporate that - (a) is a foreign corporation; (b) is a trading corporation formed within the limits of Australia or is a financial corporation so formed; (c) is incorporated in a Territory; or (d) is the holding company of a body corporate of a kind referred to in paragraph (a), (b) or (c)." 42. As counsel for the appellant stressed, the admission in the defence did not establish that the appellant was a trading corporation. The corporation may be a foreign corporation, a corporation incorporated in one of the Territories or the holding company of a corporation of a kind referred to in paras. (a), (b) or (c). In none of these cases need the corporation be a trading corporation.

43. If it had been correct to conclude that the appellant was a trading corporation, it may have been less difficult to infer that the advertisement was published in trade or commerce. But, as his Honour pointed out, it does not follow that an advertisement published by a trading corporation is necessarily published in trade or commerce. A corollary of that proposition is that an advertisement may be published in trade or commerce although it is not published by a trading corporation.

44. In my opinion the question now under consideration can only be resolved by reference to the terms of the advertisement itself and the circumstances of its publication. There is no other material. One needs to ask oneself what inferences may legitimately be drawn from the form of the advertisement and its wide ranging publication. One needs also to take into account that the nature of the appellant's activities and the purpose it had in publishing the advertisement are matters peculiarly within its knowledge. It carried no onus of proof. But, if inferences suggesting that the advertisement was published in trade or commerce are open, the absence of evidence from the appellant - none was led - would make it less difficult to draw the inferences than might otherwise have been the case.

45. As earlier emphasised, the message conveyed by the advertisement was that environmental tobacco smoke was not harmful to the health of non-smokers. It might be annoying and might cause discomfort but nothing more was involved. Those problems were to be overcome by tolerance, understanding and mutual respect. So the message was one of reassurance.

46. Such a message might, as counsel for the appellant submitted, have been published for many reasons. These may have been altruistic - a well meant reassurance to the community that passive smoking was not a health problem. Or it may have been published as a contribution to some ongoing public debate or public discussion about the matter. I suppose that it is possible that it was published on behalf of sporting and other bodies which tobacco companies frequently sponsor. And, it may indeed have been published for commercial reasons i.e. to promote or maintain the sales of the commercial commodity, cigarettes, which were the subject of it. I find it difficult to think of other possibilities.

47. One problem I have about possibilities other than that associated with trade or commerce is the extent of the publication. The evidence does not appear to disclose how many newspapers were involved altogether. In those that are referred to, the advertisement occupied half of one whole page, not in the classified advertisement section, but on pages of the various papers devoted to general items of news, or, in the case of the Australian Financial Review, business affairs. There is no evidence, I think, of the cost of inserting the advertisement, but one's common knowledge of affairs tells one that the total cost of the exercise must have amounted to some tens of thousands of dollars. One asks oneself the question why

would any person or body spend such a substantial sum of money unless it saw in the publication some commercial advantage. This may reflect a cynical attitude on my part but I think the question is realistic.

48. Furthermore, if the advertisement were inserted for altruistic reasons, it seems difficult to think that the name of the benefactor and the reason for its charity would not appear more cearly. After all, such a body, if it existed, so one would thnk, would have wished to indicate its independence of the tobacco industry and not leave the advertisement as one inserted by a body known as the Tobacco Institute. Otherwise some readers may have thought, as perhaps some did, that the advertisement was inserted for reasons of self interest with the consequence that its detachment and objectivity may have been open to question.

49. So far as a contribution to ongoing public debate or discussion is concerned, one might have been more willing to accept this possibility as plausible if there had been some clear evidence that such a debate or discussion was proceeding in the media generally. We were not referred to any evidence of it, least of all to any evidence of there having appeared in the various newspapers beforehand items of news or comment about the matter or advertisements suggesting that passive smoking was harmful to health. I have not made an exhaustive search of the record in order to find out whether any such evidence exists, but it is significant that we were referred to none.

50. It is true that there is evidence that, from time to time, members of the scientific and medical communities discussed the matter at conferences and seminars and of the publication in scientific and medical journals of papers and articles on the topic. A schedule containing a list of these was provided to us. Some of the references in it are much earlier than July 1986 when the advertisement was published; some are substantially later. Others are closer to the date of it. It is probable that there were occasions when the press reported on these meetings or about the papers that were published. But the evidence does not refer to press articles; and, significantly, the advertisement makes no reference to any such articles either. The point which needs to be emphasised is that there is no material which would suggest the existence of a general debate in the community about the time the advertisement appeared in July 1986.

51. If the advertisement were inserted by bodies sponsored by tobacco companies, one would expect to see published in the advertisement a statement of who those bodies were. Part of the impact the advertisement might have been expected to have may well have derived from the presence in it of the names of well known sporting or cultural organisations. But no such names appear.

52. The advertisement was stated to have been inserted by the Tobacco Institute. Its very name suggests some connection with the tobacco industry generally, cigarette companies, or perhaps tobacco growers or producers. Of course, in a literal sense, the advertisement purports to come from smokers. Its prominent heading says that it is a message from "those who do", i.e. smoke, "to those who don't", i.e. those who do not smoke. It may be accepted that only the gullible would accept that statement at its face value. It seems most unlikely that the advertisement was inserted by some organisation or association of smokers in an endeavour to persuade non-smokers that their health was not in danger. Furthermore, it seems quite unlikely that any such association or organisation would call itself the Tobacco Institute.

53. All these considerations taken together have led me to conclude that the most likely reason for the publication of the advertisement was to promote or maintain sales of cigarettes for commercial reasons, i.e. gain. In my opinion this inference, if not the only one open, is the most compelling and the most likely. I am satisfied that it should be drawn principally because of the absence of evidence on the point from the appellant.

54. There is another reason which strengthens me in my conclusion. That stems from the way in which the trial developed. This Court has quite elaborate pre-trial proceedings which attempt to bring out the real matters in dispute in cases which it tries. If there had been a real question about whether the advertisement was published in trade or commerce, it seems most unlikely that it would not have been raised expressly in directions hearings. Certainly it should have been. Those appearing for the appellant had an obligation to raise it. If it had been raised, it would have been most convenient to try it first as a separate question. If the

appellant had succeeded on it, months of hearing time and the large sums of money spent on costs would have been avoided. The fact that the matter was not raised in this way strengthens my view that the inference that the advertisement was published in trade or commerce should be drawn, but it is not essential to my conclusion.

55. In the result, I do not find error in his Honour's conclusion that the advertisement was published in trade or commerce. I would reject the appellant's submissions to the contrary.

Injunctive Relief 56. The next matter to be dealt with is whether or not his Honour was in error in granting injunctive relief. His Honour granted three injunctions. The first restrained the appellant from publishing or causing to be published, in trade or commerce, the advertisement in question in the proceedings. The second restrained the appellant from making statements in trade or commerce "that it was the fact that ..." and there then followed a series of statements each of which was taken from the advertisement either in terms or in the sense that the essential statements were taken and coupled with one or other of the diseases which had been the subject of his Honour's findings. The statements were:-

(a) there is little evidence and nothing which proves scientifically that cigarette smoke causes disease in non-smokers; (b) there is little evidence that cigarette smoke causes lung cancer in non-smokers; (c) there is nothing which proves scientifically that cigarette smoke causes lung cancer in non-smokers; (d) there is little evidence that cigarette smoke causes respiratory disease in children under the age of one year; (e) there is nothing which proves scientifically that cigarette smoke causes respiratory disease in children under the age of one year; (f) there is little evidence that cigarette smoke causes attacks of asthma in non-smokers; (g) there is nothing which proves scientifically that cigarette smoke causes attacks of asthma in non-smokers; (h) there is little evidence that cigarette smoke causes otitis media in children. 57. The third injunction restrained the appellant from making statements in trade or commerce that the conclusions drawn in an article, "Relationship of Passive Smoking to Risk of Cancer and other Smoking-Associated Diseases" by Lee, Chamberlain and Alderson were based on statistical detail in a study involving 12,000 people. This was a reference to the article mentioned in the advertisement which referred to a study involving 12,000 people.

58. His Honour published reasons for the making of these orders on 15 April 1991. In relation to the order restraining the republication of the advertisement, his Honour stressed that the injunction which he granted did no more than to prevent the republication of the advertisement in its entirety. In relation to the second injunction his Honour said:-

"(ii) The orders in para. 2 are framed upon the basis that the statements in para. 3 of Exhibit A (the advertisement) are made as statements of fact. I have framed the orders in the present tense since I think they are justified by the evidence as it presently stands. It will be open for the respondent to apply for a variation or discharge of any of the orders should they be thought to be inappropriate

in the light of new evidence which may come to the knowledge of the respondent. To frame orders in this fashion appears to me to conform with usual practice. Thus, in a case where a rival trader proves that a competitor is making a misleading or deceptive statement about his (the competitor's) product, the appropriate order is to enjoin repetition of the statement, leaving it to the competitor to apply for a variation or discharge of the injunction should he be able to demonstrate by further evidence that the statement has ceased to be misleading or deceptive. (iii) I have used the words 'attacks of asthma' rather than 'asthma' in orders 2(f) and (g) because both parties have suggested those words in their draft minutes." 59. The attack which was made upon these orders was concentrated upon the second set of orders restraining the publication of the various statements in the advertisement as statements of fact. It was submitted that the orders would operate in respect of statements identical with or substantially similar to those, publication of which was restrained for all time and in all contexts. It was said that research into the question of the effects of tobacco smoke, environmental and otherwise, was continuing and that it might eventually emerge, as a consequence of further research, that there was either no basis for the views expressed by the various scientists called in the respondent's case or material which called those views seriously into question. The restraint which his Honour had imposed would operate to prevent the appellant engaging in full and free discussion about the matter. In relation to the first injunction which restrained the republication of the advertisement, it was said that the appellant had given an unequivocal undertaking to the Trade Practices Commission not to republish the advertisement and that it was a wrong exercise of discretion in those circumstances to restrain the republication of the advertisement because there was absolutely no threat of its being republished.

60. Injunctions such as those granted by his Honour are granted pursuant to s.80 of the Act. The discretion of the Court to grant injunctions under that section has been the subject of recent consideration by the Full Court of this Court in ICI Australia Operations Pty. Limited v. Trade Practices Commission (1992) ATPR, case no. 41-185, per Lockhart J. at pp 40,521-25, per Gummow J. at pp 40,529-33 and per French J., pp 40,533-34. I do not find it necessary to make an analysis of the judgments for the purpose of this case but it needs to be emphasised that the remedy is discretionary. It also needs to be emphasised that the remedy is provided for in the context of the public interest and that what are the requirements of the public interest must carry substantial weight with a court called upon to exercise the jurisdiction. Nevertheless, a court asked to grant an injunction should be careful to see that it does not go further than the circumstances of the instant case require. Usually there will be no reason to grant an injunction unless there is a threat of future conduct which itself will amount to a breach of the Act.

61. In the present case, the appellant had undertaken to the Trade Practices Commission and indicated to the respondent that it would not republish the advertisement. That was clear before the proceedings commenced. In those circumstances I am unable to perceive the basis for the first injunction restraining the republication of the advertisement. There was absolutely no threat that it would be republished. So far as the appellant was concerned, the matter was in the past. Although the remedy is discretionary and one ought not to interfere with the exercise of a discretion except on well established grounds, I have reached the conclusion that the granting of the first injunction did represent a wrong exercise of discretion which ought to be set aside.

62. The second injunction or group of injunctions takes each of the principal statements in para. 3 of the advertisement and either generally or in relation to a particular disease restrains their individual republication at any time in the future. The complaint which the appellant makes about them is that the

restraint applies to statements in these terms whatever their context may be and whenever in the future they may be published. It may be recognised that the statements which his Honour has restrained are statements to the effect of those set out in his orders made as statements of fact, not as statements of opinion. In his reasons for judgment he has indicated the orders which he would have made had he thought that the statements were statements of opinion and not statements of fact.

63. One of the difficulties I have with what his Honour has done stems from the fact that each of the statements contains words or phrases of uncertain content. One of the tasks which this Court has had in reaching its conclusion has been to ascribe meanings to these words and phrases. This has been done in the context of the advertisement which is in question. It has not been done in relation to the same words used in other unspecified contexts. The ascertainment of the meaning of the words has not been an exercise which has been without its difficulties. Members of the public reading the advertisement may have ascribed to these various words and phrases different meanings or found different shades of meaning in them. The words and phrases which I have in mind as being particularly relevant to this problem are "little evidence", "nothing which proves scientifically", "causes", "disease" and "causes disease". A different advertisement using all or some of these same words may not be misleading or deceptive because of the context in which they appear. In other words the statements may appear as they are in his Honour's injunctions but a reading of the context in which they appear may demonstrate that they are not in fact misleading or deceptive. Furthermore, it is possible that such statements may appear in scientific or medical literature. It is true that no statement would be in breach of his Honour's orders unless it were made in trade or commerce, but it is by no means inconceivable that statements made in a scientific or medical paper might offend one or more of the orders, for example, if it were commissioned by the appellant as part of an ongoing campaign to promote the sale of cigarettes, not directly but by providing scientific material persuasive of the view that environmental tobacco smoke was not harmful to non-smokers.

64. Another matter upon which the appellant relied was the fact that the injunctions were unlimited as to time. That is true. It was said that the inquiry had been into the question whether or not the statements were misleading or deceptive at the time they were made on 1 July 1986. In my opinion, the evidence is not restricted to that date. Firstly, the advertisement which appeared in The Age appeared on 6 January 1987 and, in any event, there are studies which came out after 1 July 1986 which are not only consistent with the evidence which existed on 1 July 1986, but which tend to demonstrate that there was building up in the latter months of 1986 and in 1987 a body of evidence and material which tended more clearly to falsify the statements made in the advertisement. Nevertheless, I think it is true to say that the Court can only have regard to what the evidence was at the time that it heard the case. Obviously the matter continues to be the subject of further research and study. One cannot tell what ultimately may be discovered. That circumstance is an additional factor to be taken into account against the making of the orders made by his Honour but I do not think it has the weight which ought to be accorded to the contextual submission.

65. Again I stress that one would not interfere with the exercise of a discretion such as this unless it were clear that it had miscarried. But, having given the matter due consideration, I have reached the conclusion that there has been a wrong exercise of discretion with the consequence that the second group of orders cannot stand.

66. As to the third order which concerns the article which reported on a study involving 12,000 people, I do not recall, and I have been unable to find, submissions specifically addressed to that problem. It may be correct to take the view that the order should go because of the absence of any threat to publish any statement about it such as appeared in the advertisement, but in the light of what I think should now happen it is unnecessary to reach a final conclusion on that matter.

Conclusion 67. In the result I would set aside orders 1 and 2 made by his Honour on 15 April 1991 and I would hear further argument on the question whether order 3 should also be set aside. I would be prepared to entertain an application for the making of an appropriate declaration concerning the falsity of the advertisement. I would also be prepared to consider any submissions counsel for the respondent wished to make in support of the substitution of orders restraining the appellant from engaging in misleading or deceptive conduct

which were less extensive in their operation than those made by his Honour. I should say, however, that I have given some consideration to the question whether it would be possible satisfactorily to frame any such orders and I think that it may be extremely difficult to do so.

68. After we reserved our decision, submissions were made to us on behalf of the appellant asking for leave to argue a fresh point based on the decisions of the High Court in Australian Capital Television Pty. Limited v. Commonwealth of Australia [1992] HCA 45; (1992) 108 ALR 577 and Nationwide News Pty. Limited v. Willis [1992] HCA 46; (1992) 108 ALR 681. Fresh notices to the various attorneys-general have been served and there is an indication from the Attorney-General for the Commonwealth that he may wish to intervene if we give leave. I would permit argument on the question whether we do give leave when the matter is next in the list.

69. It remains to mention costs. In the light of all that has happened, the only course to follow is to hear full argument on the question of costs when the matter is back in the list. The parties will then have the benefit of our reasons in respect of all matters argued and the question of costs can be dealt with comprehensively then.

70. In the meantime I would make no formal orders.

FOSTER J. On 1 July 1986 the appellant caused to be published a statement in a number of newspapers enjoying a wide circulation in Australia. The statement was described as an advertisement and it was published in a prominent position in each of the newspapers. The advertisement read as follows:-

" Advertisement A message from those who do ... to those who don't Some non-smokers are annoyed by cigarette smoke. This is a reality that's been with us for a long time. Lately, however, many non-smokers have been led to believe that cigarette smoke in the air can actually cause disease. And yet there is little evidence and nothing which proves scientifically that cigarette smoke causes disease in non-smokers. The London Times reported findings from the Institute of Cancer research in Surrey, England, published in this month's edition of 'British Journal of Cancer', that 'passive smoking' for life-long non-smokers carries no significant increase in the risk of lung cancer, bronchitis or heart disease (allegedly all associated with smoking). The Institute's conclusions are based on a wealth of statistical detail from a study involving 12,000 people. In a study by a Vice-President of the American Cancer Society in 1981 which involved 175,000 people, it was reported that 'passive smoking' had 'very little, if any' effect on lung cancer rates among non-smokers. In the follow-up study published in 1985, no statistically significant increase in risk was reported. Researchers at the Harvard School of Public Health found that a non-smoker would have to spend 100 hours straight in the smokiest bar to 'absorb' the equivalent of a single filter tip cigarette. Major views on 'passive smoking' over the last few years have concluded that 'passive smoking' cannot be shown to be a health risk. The weight of evidence is summed up in the remarks at the conclusion of the 1984 Vienna Health Conference which was held in co-operation with the World

Health Organisation: 'should law makers wish to take legislative measures with regard to passive smoking, they will, for the present, not be able to base their efforts on a demonstrated health hazard from passive smoking'. Often our own concerns about health can take an unproven claim and magnify it out of all proportion; so what begins as a misconception turns in a frightening myth. Alright, cigarette smoke may be annoying to some non-smokers, but how shall we deal with these problems? Confrontation? Segregation? Legislation? No. We think annoyance is neither a governmental nor a medical problem. It's a people problem. Smokers can help by being more considerate and responsible. Non-smokers can help by being more tolerant. And both groups can help by showing more respect for each others rights and feelings. Don't let intolerant minority pressure groups use you to create a division between Australians. Authorised by John Dollisson Tobacco Institute, Gold Fields House, Sydney." 2. It was claimed by the respondent that the third paragraph was a misleading and deceptive statement and constituted a breach of s 52 of the Trade Practices Act 1974 (Cth) (the "Act"). The respondent instituted proceedings in this Court asserting the breach of the Act and seeking injunctive relief. After a hearing lasting 91 days and involving the taking of evidence from scientists expert in the fields of epidemiology, toxicology, and statistics, both in Australia and overseas, the learned trial judge (Morling J) found that breaches of the Act had been established and granted injunctive relief in a form appropriate to particular findings he had made. His Honour gave a lengthy judgment in which he dealt in some detail with the scientific evidence which had been adduced before him and also with other questions such as whether the advertisement had been published by the appellant "in trade or commerce" within the meaning of the Act. His Honour held that the advertisement had been so published.

3. In determining the case his Honour considered evidence relating to the effect of "cigarette smoke in the air" upon the diseases of lung cancer, respiratory disease in children under the age of one, asthma, and otitis media in children. He made findings as to such effect in respect of each of these diseases. The evidence before his Honour was voluminous. We were taken to large quantities of it by counsel in the course of presentation of the appeal which, itself, occupied 15 hearing days. In fact the appellant sought the reversal of all of the primary judge's major findings.

It is convenient to deal in the first place with the appellant's contention that his Honour was in error in holding that the advertisement was published in trade and commerce. This was not a submission that his Honour had erred in some way in assessing evidence called by both sides on this issue. The appellant, in fact, called no evidence. Its claim before the primary judge and this Court was simply that the respondent had failed to establish this issue in its favour by the evidence it called.

4. His Honour's findings on the issue were as follows (27 FCR at 157):-

"Cigarettes are articles of commerce and restrictions on their use by consumers may render them less attractive as such, resulting in adverse economic consequences for their manufacturers and distributors. No doubt the participation by a trading corporation in a debate on a matter of public or social controversy will often not be conduct in trade or commerce. But the publication of the advertisement in the present case should not be viewed in isolation. It was

published by a trading corporation which, so it may be safely inferred, was concerned to ensure that the sale of cigarettes would not be adversely affected by a belief on the part of the public as to a possible causal link between cigarette smoke and disease in non-smokers. The existence of such a link, or of evidence suggesting it, could affect the sale of cigarettes in various ways, for example, public pressure to restrict the smoking of cigarettes in places where non-smokers are present. The advertisement had the potential, and was no doubt intended, to protect the commercial interests of cigarette manufacturers and distributors. Accepting that conduct 'in trade or commerce' is confined to conduct which is itself an aspect of activities which, of their nature, bear a commercial character I think the proper conclusion is that the publication of the advertisement was conduct 'in trade or commerce'. Advertising products for sale is an aspect or element of the selling of those products. The selling of the products is indisputably a trading or commercial activity. Advertising may serve a number of purposes. One purpose may be to refute criticism of the seller's products thus protecting the market for them. The advertisement published by the respondent was calculated to achieve such a purpose." 5. It may be said at once that his Honour did not have before him any direct evidence that the appellant was a "trading corporation". It had admitted on the pleadings that it was a "corporation" within the meaning of the Act, but that concession did not suffice to accord it the character of a trading corporation. Having regard to the definition in s 4 of the Act the admission was capable of but did not necessarily operate as a concession that the appellant was a "trading corporation". It could also have qualified as a "corporation" within the meaning of the definition by being a foreign corporation, a financial corporation, a body corporate incorporated in a Territory, or a certain type of holding company. Indeed, I am satisfied, that there is no evidence in the case which establishes that the appellant was in fact a trading corporation.

6. Of course, the appellant could perform activities in trade and commerce without itself being a trading corporation. The expression "in trade or commerce" as used in s 52 of the Act has been the subject of exposition in the High Court in Concrete Construction (NSW) Pty Limited v Nelson [1990] HCA 17; (1990) 169 CLR 594. The majority of the Court (Mason C.J., Deane, Dawson and Gaudron JJ.) (at 603-604) held that the words limited the operation of s 52 to:-

" ... conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J. in a different context in Bank of N.S.W. v. The Commonwealth [1948] HCA 7; (1948) 76 CLR 1 at 381, the words 'in trade or commerce' refer to 'the central conception' of trade or commerce and not to the 'immense field of activities' in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business. ... What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct

includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public." Undoubtedly there was a paucity of evidence indicating that the publication of the advertisement was an activity bearing the necessary trading or commercial character. Indeed, as a result of promptings from the Court, counsel for the respondent made application to adduce further evidence on the topic. He tendered the memorandum and articles of the appellant. The question of whether leave would be granted to introduce this evidence was reserved. In the circumstances I do not find it necessary to consider this question.

7. The material was, as I have already indicated, published extensively nation-wide. The advertisement was prominent and eye-catching and described itself as an advertisement. Even the most cursory reading of it would, in my view, have been sufficient to convey to an ordinary reader a message favourable to the consumption of cigarettes as an article of commerce. The advertisement was persuasive in tone. It sought to allay fears which it suggested were commonly and erroneously held that the inhalation of tobacco smoke in the air could be harmful. The name of the appellant, appearing as the authoriser of the advertisement, would, in my view, when coupled with its obvious message, be quite capable of conveying to such a reader that the appellant had a commercial interest in assuaging community concerns about the harmful effects of inhaling environmental tobacco smoke. The general tenor of the advertisement, its wide exposure, and the name of the appellant combine to create an irresistible impression that it was promotional material designed to advance the cause of cigarette smoking and to assist in the sale of cigarettes.

8. I entirely agree with the decision of the primary judge which, in my view, does not depend to any significant extent upon his assumption that the appellant was a trading corporation. For myself, I do not need to have regard to any other evidence in the case to arrive at the same conclusion. I have had the advantage of reading the reasons for judgment of Hill J in draft form. His Honour has dealt with arguments put before us based upon s 51(xx) of the Constitution. I respectfully agree with what his Honour has written and do not desire to add anything. These arguments do not alter my view that the publication of this advertisement was properly characterised by the learned primary judge as an act in trade or commerce.

9. The next matter that falls for consideration is the appellant's submission that the paragraph complained of must necessarily be viewed not as a statement of fact but merely as an expression of opinion. This submission was made to and rejected by the primary judge. We were referred, as was his Honour, to a number of decisions of the High Court and of this Court. It is convenient to set out the passage from the judgment of Bowen C.J., Lockhart and Fitzgerald JJ. in Global Sportsman Pty Limited v Mirror Newspapers Limited [1984] FCA 180; (1984) 2 FCR 82, which is very frequently cited when this question is considered. Their Honours said (at p 88):-

"Whether or not s.52(1) is contravened does not depend upon the corporation's intention or its belief concerning the accuracy of such statement, but upon whether the statement in fact contains or conveys a meaning which is false; that is to say whether the statement contains or conveys a misrepresentation. Most commonly, such a statement will contain or convey a false meaning if what is stated concerning the past or present fact is not accurate; but a statement which is literally true may contain or convey a meaning which is false. Many statements, for example, promises, predictions and opinion, do involve the state of mind of the maker of the statement at the time when the statement is made. Precisely the same principles control the operation of s.52(1) with respect to the making of such statements. A statement which involves the state of mind of the maker ordinarily conveys

the meaning (expressly or by implication) that the maker of the statement had a particular state of mind when the statement was made and, commonly at least, that there was basis for that state of mind. If the meaning contained in or conveyed by the statement is false in that or in any other respect, the making of the statement will have contravened s.52(1) of the Act... ... An expression of opinion which is identifiable as such conveys no more than that the opinion expressed is held and perhaps that there is basis for the opinion. At least if those conditions are met, an expression of opinion, however erroneous, misrepresents nothing." 10. We were also referred to the decisions in Industrial Equity Ltd v North Broken Hill Holdings Ltd (1986) 9 FCR 385, Glorie v WA Chip and Pulp Co Pty Limited [1981] FCA 224; (1981) 55 FLR 310, Bateman v Slatyer (1987) 71 ALR 553, Parkdale Custom Built Furniture Pty Limited v Puxu [1982] HCA 44; (1982) 149 CLR 191, and McWilliams Wines Pty Limited v McDonald's System of Australia Pty Limited [1980] FCA 159; (1980) 49 FLR 455. Hill J has discussed these cases in his reasons for judgment. I do not desire to add anything to what his Honour has said. I have considered them in coming to the views which I now express.

11. It is important to bear in mind that the passage from Global Sportsman set out above does not and cannot provide a warrant for asserting that a Court dealing with a claim under s 52 of the Act based on an alleged misleading or deceptive statement must necessarily make, as it were, a preliminary determination of its own as to whether the statement complained of is to be classified as one of fact or one of opinion: that is to say, a determination without regard to what might be the view of the class of readers, or some significant section of it, to which the statement is directed. It is the Court's perception of the character which those readers would accord to the statement which is, at all stages, the determining factor. However, as I understand the appellant's submission it is not contended that the Court should itself find that the third paragraph is one only of opinion but rather that it was so obviously a statement of opinion and not of fact that only the most stupid of readers, whose interests, on the weight of authority, fall outside the protective circle of s 52, would have read it as a statement of fact. Such people would have been misled not by the author of the advertisement but by their own unfortunate and unpredictable misconception of the meaning of the words.

12. In support of this submission, it was argued that the learned primary judge had ascribed far too much weight in his reasons to the fact that there was in the paragraph no express statement that it represented only the opinion of the author. It was put that it was so clear from other indications in the passage that it was a mere expression of opinion, that the addition of such a statement would have been a virtual tautology.

13. It was submitted that the paragraph complained of was merely part of a statement which was clearly being put forward as an argument in an ongoing public debate as to the effects of passive smoking. The paragraph was no more than a contribution to that debate. It could not be seen as an authoritative statement of fact but rather as a portion of a carefully reasoned statement of position. The use of the word "little" was said to indicate that the paragraph was essentially an expression of a value-judgment, the word being essentially imprecise and belonging to the realm of opinion rather than fact.

14. I totally reject this. Whilst, no doubt, a section of the newspaper reading public might regard the paragraph as merely an expression of the author's opinion, the remaining section which, in my view, would be of substantial size, would see it as a statement of fact. This, of course, is sufficient to require that it be accepted as a statement of fact when considering whether its publication constituted a breach of s 52 of the Act.

15. The reference in the first preceding paragraph to it being "a reality" that non-smokers are annoyed by cigarette smoke and the statement in the second paragraph that lately many of them "have been led to

believe" that the smoke can "actually cause disease" both are, in my view, clear assertions of fact. That they are imprecise statements does not rob them of their factual nature. The introduction of the third paragraph, the paragraph complained of, by the words "and yet" carries with it the clear suggestion that the author is seeking to deal with the effect of the two previous statements of fact by the introduction of countervailing statements of fact. I respectfully agree with the primary judge that the third paragraph is essentially a factual statement as to the state of the evidence on the subject. It may be contrasted with the second last paragraph of the advertisement where the words "we think" make it quite apparent that an opinion is being expressed.

16. Notwithstanding the appellant's argument to the contrary, I also share the view of the primary judge that it is quite significant that no such words appear in the paragraph complained of. Had the author wished to indicate that nothing more than an opinion was being expressed, he could have achieved this object quite simply by introducing the very same words "we think" before the words "there is little evidence". Indeed, I have become quite satisfied, having regard to the obvious aim of the whole advertisement to persuade the reader that cigarette smoke was merely annoying and not harmful to non-smokers, that the third paragraph was clearly intended by the author to be read as an authoritative statement of fact and that its wording was carefully chosen to achieve this result.

17. I come then to consider the question whether a breach of s 52 has been demonstrated on the basis that the impugned paragraph is a statement of fact. An essential preliminary question of course, is what was the meaning of the paragraph. Until the determination is made as to what representations were conveyed by it, no consideration can be embarked upon as to whether those representations were misleading or deceptive. Two further matters need to be mentioned. First, in determining what representations were made, the paragraph must be read contextually with the whole of the advertisement. Secondly, it must be steadfastly borne in mind that the advertisement was not aimed at a highly educated class in the community but was directed to the widest possible range of ordinary readers of major newspapers throughout Australia. Hill J in his judgment has dealt with the essential characteristics of such readers. He has done so with reference to authority. I respectfully agree with what he has written and do not seek to add anything for myself other than that, in approaching this aspect of the case, I have in mind, as the appropriate yard-stick, readers who may vary in age from the youthful to the elderly, who are not dullards or dotards but who, nevertheless, may have little or no formal grounding in scientific or philosophical thought and who may have only a humble to mediocre grasp of language.

18. Although no precise evidence was directed to this aspect of the case, I consider that it is reasonable to assume that readers of the type that I have been describing would form a not insignificant proportion of persons reading the article. I think it reasonable to assume also that readers whose understanding of the advertisement is to be considered would not include those who would give it but a cursory glance or merely skim it over without much interest. It is fair to assume that the readers whose reaction and comprehension are to be assessed would have had sufficient interest in the topic of passive smoking to read the advertisement with a fair degree of attention, albeit without making any attempt to parse and analyse it or to reach for a dictionary to determine the precise meaning of its words.

19. I should also state that I find myself in general agreement with what Sheppard J has written as to the impression such a reader would have gained from reading the advertisement as a whole. He or she would certainly have received the message that although a non-smoker might reasonably be irritated and discomforted by exposure to someone else's tobacco smoke there would, nevertheless, be no reasonable prospect of him or her suffering physical harm. The situation was one calling for mutual tolerance and understanding rather than authoritarian intervention. The paragraph would have been read and appreciated as part of a statement carrying an overall message of reassurance.

20. I consider that such a reader would have appreciated that the paragraph was intended as an answer to the statement made in the previous paragraph that "many non-smokers have been led to believe that cigarette smoke in the air can actually cause disease". I am satisfied that he or she would have perceived that it was intended to demonstrate that there was no basis for the belief referred to. The statement is succinct. It is dismissive of that belief. It is authoritative in tone. It contains a number of words that require

separate consideration. Before I embark upon such a consideration, however, it is necessary that I make some comment on how this aspect of the proceedings was dealt with at trial.

21. The respondent's pleading was simplicity itself. It alleged the making by the appellant of representations in the very terms of the subject paragraph. It alleged that those representations were misleading or deceptive because it was not the fact that there was little evidence and nothing that proved scientifically that cigarette smoke caused disease in non-smokers. This pleading did not assign any particular meanings alleged to be attributable to the words of the paragraph by the type of reader I have been discussing. In those circumstances the allegations of breach were correspondingly non-specific.

22. The problem came to the surface when counsel for the respondent opened the case. The learned primary judge observed that a case could have been pleaded and particularised on the basis of the whole advertisement, a case to the effect that a misleading and deceptive message was conveyed that although there might be arguably some slight risks to health associated with passive smoking, these risks could be safely ignored. In relation to a case put forward along those lines, his Honour said:-

"But I do not take that case to be particularised as a separate case, and if he wants to put that as a separate case, I think he would have to amend, but he disclaims that he has a separate case. He says, rightly or wrongly, that he is going to seek to have paragraph 3 construed as part of the overall document and give the words there some colour when it is put in its context...". 23. Although problems associated with lack of precision of pleadings and particulars re-emerged from time-to-time during the lengthy hearing of the case, it seems that the situation remained basically as it was when his Honour made the statement referred to above. So far as I can see, this left open from beginning to end the question of what meanings could reasonably be attributed to the paragraph by the hypothetical lay reader. In the end, his Honour attributed meanings to vital words and decided the case accordingly. He held that "evidence" was data or material affording grounds for belief. He further held that to the hypothetical reader "scientific proof" of a proposition would be achieved when the evidence in support of it was "compelling or convincing". I have not been able to ascertain at what point of time, if any, in the trial the parties, if they ever did, accepted that one side was affirming and the other denying that the available evidence that cigarette smoke caused disease in non-smokers was "compelling or convincing". Whether or not this issue crystallised in this form, the fact is that each side produced scientific evidence in the form of reports and reviews on the general topic of the deleterious effect on health of passive smoking. They also called oral evidence, from the makers of the reports and reviews and from the critics of them. These witnesses, who had considerable scientific expertise in their fields, were cross-examined at length with the result that the scientific evidence that accumulated in the case was voluminous.

24. His Honour ultimately decided that there existed at the time of the advertisement more than a little evidence that passive smoking caused disease and that, indeed, in respect of certain diseases that evidence could properly be described as "compelling and convincing". In arriving at these conclusions, in light of the way in which the case had been conducted on both sides, it was necessary for his Honour to make decisions as to what evidence he accepted and rejected and as to which scientific witnesses he preferred as against other witnesses. He was obviously put in the invidious position of having to make decisions in scientific areas where scientists of great eminence were unable to agree. What commenced as litigation as to the alleged misleading and deceptive quality of a published advertisement undoubtedly took on the appearance of a full scale inquiry into the possible harmful effects of passive smoking.

25. The result is that this appeal was to a large extent devoted to efforts on the part of counsel for the appellant to challenge what were essentially scientific findings made by his Honour in the course of determining issues which through inadequacy of pleading had not been the subject of precise definition.

26. In these circumstances the appellant conducted the appeal before us largely on the basis of seeking to have overturned findings by his Honour that underpinned his decision that there was more than a little evidence that passive smoking caused disease in non-smokers and that that evidence was compelling and convincing. Of necessity, we were taken to large areas of evidence in reports, reviews, and oral expert testimony which bore upon issues which, so far as I can see, had not been the subject of adequate definition in the pleadings or throughout the trial.

27. It is clear that his Honour preferred the evidence of epidemiologists of great eminence called by the respondent to the evidence of toxicologists and statisticians, also of considerable eminence, called on behalf of the appellant. It may be observed that the evidence of these scientists clearly demonstrated that in the highest levels of science there was disagreement as to whether passive smoking could cause disease in non-smokers. It was submitted, with some force, by counsel for the appellant that nothing more could be obtained from the whole of the evidence than a recognition that this disagreement existed. It was not a disagreement which the learned primary judge or this Court could reasonably resolve. In any event, it could not be resolved on the basis of "preferring" the evidence of particular scientists to the evidence of others. This was not an appropriate approach. Further detail as to the scientific contest that was waged is to be found in the other judgments in this case. I do not propose to lengthen these reasons by making additional reference to it. It is, perhaps, fair to say, however, that I was not unimpressed by some of the attacks made upon aspects of the epidemiological evidence and the reviews based upon it. The effect of toxicological research upon the apparent results of epidemiological studies, also, appeared to be not without significance. However, in the view that I have formed, these matters of detail need not and should not be pursued. This case requires now, as it did from its commencement, that there be in the first place an ascertainment of the nature of the representations reasonably flowing from the words used in the paragraph. It is only when a determination is reached on this matter that the further determination can be made whether those representations are relevantly misleading or deceptive. If the representations are such as not to require an evaluation of scientific evidence to determine whether they have this character, then such an evaluation involving the consideration and acceptance or rejection of material portions of competing scientific testimony need not be embarked upon.

28. I have given consideration to the question whether this Court is in any way bound to approach the resolution of this case along the same lines as it was conducted in the Court below. I have come to the conclusion that the Court is not so bound. As the matter was left at large in the pleadings and in the general conduct of the case, this Court must form its own view as to the representations reasonably arising from the paragraph. It is not bound to accept and, indeed, should not accept the representations as found by the learned primary judge in circumstances where it forms a different view.

29. For my part, I have come to the firm conclusion that, having regard to the view that I have formed as to the perceptions of readers of the class I have discussed, I must respectfully differ from his Honour as to the representations to be attributed to the phrase "nothing which proves scientifically". I shall refer to this matter when considering the paragraph in detail. However, I mention it now, because as I do not accept that the phrase requires that evidence that leads to scientific proof, within the meaning of the paragraph, must be "compelling or convincing", I consequently do not accept the need for the investigation of the extensive scientific evidence undertaken by his Honour nor for the resolution of the scientific controversies emerging from the evidence. The matter, in my opinion, falls for determination not on the basis of the accuracy, validity or acceptability of the scientific evidence or aspects of it, but simply upon its existence. I shall refer to this later.

30. I come, then, to the paragraph itself. For ease of reference, I set it out again, as follows:-

"And yet there is little evidence and nothing which proves scientifically that cigarette smoke causes disease in non-smokers." 31. The sentence has three distinct parts. The first is the phrase "and yet". I am satisfied that a significant number of the readers of the type I have discussed would have understood that phrase, in the context of the

previous paragraphs as conveying the meaning "but the fact is". It may have been capable of bearing other meanings, but in the type of inquiry necessarily required by s 52, that is beside the point.

32. The second part of the paragraph for consideration is comprised in the words "there is little evidence that cigarette smoke causes disease in non-smokers". I have already said that the tone of the paragraph is dismissive. The word "little" makes its contribution to this result. It does more than convey to a reader a concept of size. If this were what were intended it could have been much better accomplished by using the phrase "a little" before the word "evidence". I am satisfied that, to many readers, it would have made the statement that the "evidence" was small in amount and also insignificant or not worthy of consideration.

33. The word "evidence" was the subject of considerable argument at the trial and before us. Its meaning must be determined by reading it in its context in the whole of the advertisement and through the eyes of the class of reader that I have mentioned. The meaning that it may have for persons trained in the disciplines of law or science is not to the point. There are two aspects to the use of the word in the advertisement. First there is the question of what the word itself would mean in general terms to a reader. Next there is the question of what would reasonably be seen by such a reader as constituting "evidence". As to the first, I do not disagree, with respect, with what the learned trial judge decided, namely that "evidence" meant "material which affords grounds for believing". For my part, however, I prefer to use a similar phrase, "material which tends to establish". As to the next, what a reader might consider the nature of such material to be would, in my view, be very heavily influenced by what he or she would read in the rest of the advertisement. Thus he or she would read of the London Times report of the findings from the Institute of Cancer Research "published in this month's edition of the 'British Journal of Cancer'". He or she would next read of a study conducted by the Vice-President of the American Cancer Society and the report which he made of that study. He or she would then read of a "follow-up study published in 1985". Next he or she would read of the findings of research of the Harvard School of Public Health. The advertisement next speaks of "major reviews on 'passive smoking' over the last few years". Finally, the reader would see reference to the "weight of evidence" being summed up in remarks at the conclusion of the 1984 Vienna Health Conference.

34. Whereas many people reading the paragraph would have regarded "evidence" as being the raw data upon which research was conducted, findings made, and those findings reviewed, I am satisfied that many others would, reasonably and without in any way deluding themselves, have gathered from the form and wording of the advertisement that its reference to "evidence" included a reference to findings, published studies, and reviews of the type referred to in the body of the advertisement. This is especially so where the results of those findings, reports, studies and reviews, as stated in the advertisement, were all clearly intended to provide "evidence" for the advertisement's thesis that passive smoking led to annoyance but to no "demonstrated health hazard".

35. I am, therefore, in respectful agreement with the primary judge's decision that for the purpose of the determination of the issues in the case, "evidence" could be regarded as including the published results of scientific research and also scientific reviews of those results. The result is that, where the advertisement spoke of the "evidence" being "little" it can mean to a significant number of readers that there were no significant scientific findings, publications or reviews indicating "that cigarette smoke causes disease in non-smokers". It may be noted that this assertion was made in the context of the advertisement's clearly setting out the result of five pieces of evidence of this kind, each to the effect that there was no demonstrated harm from passive smoking.

36. The next two words of importance are "causes" and "disease". There was considerable debate before the primary judge and before us as to the meaning of the word "cause". Again the question is not what meaning should be attributed to the term when used in scientific, philosophical or legal discussion. What must be decided is what the word could reasonably have meant in this advertisement to a significant number of readers of the type discussed. Whilst I am satisfied that a fair proportion of readers would have perceived the word as meaning "results in" or "produces", it cannot, in my opinion, be ignored that the word may take colour from other phrases used in the advertisement in its discussion of scientific studies, results and reviews. As will be observed, the findings of the Institute of Cancer Research were stated to be that

"passive smoking for life-long non-smokers carries no significant increase in the risk of lung cancer, bronchitis or heart disease...". Similarly, the Vice-President's study reported that passive smoking had "'very little, if any' effect on lung cancer rates among non-smokers". The follow-up report in 1985 was said to indicate "no statistically significant increase in risk". The "major reviews" referred to reached the conclusion that passive smoking "cannot be shown to be a health risk". The other reference in the advertisement is to passive smoking not being "a demonstrated health hazard".

37. It was forcefully put in argument on behalf of the appellant that there is a necessary distinction between the concept of one thing "causing" another and the same thing merely creating or increasing the "risk" of the other occurring. It was also put that when one was making determinations in the area of "risk", statistical theory was of fundamental importance as indicating whether a risk was "statistically significant"; if it were not, then the result may have occurred through chance rather than causal factors. But, none of these distinctions which have been debated learnedly and at length in this case were even remotely the subject of such discussion in the advertisement. Indeed, the very discrimen between "cause" and "risk" so earnestly and elaborately argued in the case and which, no doubt, exists in science and philosophy is, in my view, the subject of obfuscation in the advertisement. Certainly, no sign post was provided by the author to indicate to a reader of the class under consideration that an important alteration of course was being made from a discussion of matters of "cause" to matters of "risk". If the author had intended to make a fundamental change from one area of discourse to another, no effort was made to indicate this intention, with the result that a reader of less astute mind, in my view, would have failed to perceive the transition.

38. Because the distinction is thus blurred, I feel confident that a reasonable proportion of readers would have accepted that the word "causes", when read in the context of the discussion of the particular pieces of "evidence" which ensued, meant "creates a significant risk of". In any event, even without the influence of the context of the advertisement, I am satisfied that a significant proportion of readers would have regarded evidence that something increased the risk of something else occurring as being, itself, evidence going towards the establishment of a causal connection between the two things. Indeed, as a matter of scientific thought, I would consider this to be a correct proposition.

39. The word "disease" would, in my view, readily be understood by readers as meaning "illness" or "sickness".

40. So far as this part of the paragraph is concerned, I therefore come to the conclusion that a significant proportion of readers would take from it, in the context of the whole of the advertisement, the meaning that "there is only an insignificant amount of material which would tend to establish that tobacco smoke can create a significant risk of illness in non-smokers". Even if there was no impact upon the wording of the paragraph from the words used in other portions of the advertisement, I would still be of the view that a significant proportion of readers would regard this part of the paragraph as carrying the representation that "there is no significant material which tends to establish that cigarette smoke results in illness in non-smokers".

41. Either of these representations would be relevantly misleading or deceptive if they were untrue in fact.

42. Hill J, in his reasons for judgment, has made a comprehensive analysis of the material, in the form of reported research, studies, and major reviews which was in existence at the time of publication of the advertisement and which dealt with the connection between passive smoking and disease. The material related to the disease entities already referred to. The publications include those referred to in the advertisement, but there are many more which, to varying degrees, provide findings indicating at least a connection or association between passive smoking and the diseases of lung cancer, respiratory diseases in young children and asthma. Indeed, the report of the United States Surgeon General, in 1986, "The Health Consequences of Involuntary Smoking" stated that a review of the evidentiary material then available led "to the conclusion that involuntary smoking is a cause of lung cancer". I do not need to repeat the analysis made by Hill J. I respectfully concur in it and in the conclusion reached by his Honour in respect of it. Whatever attacks may be made upon the epidemiological research studies and the reviews based upon

them, by way of complaints as to flaws in methodology and failure to give proper heed to toxicological material, the fact, in my opinion, clearly remains that the body of material could not conceivably be described as being little in size or significance. This was also the view of the learned primary judge. I am satisfied that a breach of s 52 of the Act, in this regard, has been amply demonstrated.

43. I come then to the third portion of the paragraph. I consider that the word "nothing" must reasonably be read with the words "little evidence" which precede it, so that it would bear the meaning "no evidence". The word "evidence" would have had ascribed to it by the proportion of readers under consideration the same meaning and would have been seen as covering the same materials as in the first portion of the paragraph. The advertisement would thus have said to those readers that none of those materials "proves scientifically that cigarette smoke causes disease in non-smokers". This portion of the paragraph, unlike the first portion, deals with scientific proof of cause as opposed to mere evidence of cause. Consequently, considerable argument was advanced in the Court below and in this Court as to what could amount to scientific proof of cause. It was submitted on behalf of the appellant that even if evidence of risk could be some evidence of cause, proof of risk alone could not amount to proof of cause. Similarly, proof of an association between passive smoking and incidence of lung cancer could not amount to proof of cause, at least in the absence of rigid exclusion of all other possible causal factors. It was contended that, on this basis, the extensive epidemiological findings relied upon by the respondent could not be elevated into scientific proof of cause. This was particularly so, when flawed methodology and lack of statistical significance could be demonstrated.

44. As I have already indicated, I felt some sympathy with these arguments. However, as a result of the view I have formed as to the representations reasonably to be derived from this portion of the paragraph as they would be received by the readers in question, it is not appropriate for me to form any concluded view on the scientific material and the arguments relating to its validity or otherwise.

45. The phrase finds its place in an advertisement clearly intended to persuade readers to the point of view that passive smoking was annoying rather than harmful. I am satisfied, from a reading of the advertisement, that it has been carefully structured and the words in it chosen carefully to achieve that result. The word "scientifically" does not appear in the paragraph through inadvertence. The words "compelling" or "conclusive" could have been used if that were the meaning sought to be conveyed. Obviously the author was of the view that more persuasive value could be achieved by using the word "scientifically". It is a word that has an authoritative ring. It suggests that wise men of science have formed a view favourable to the proposition being advanced. In these circumstances it is not inappropriate to construe this word in the advertisement against the author.

46. The paragraph speaks of scientific proof of cause. To a scientist or a scientifically educated layman this might well bespeak demonstration, according to the rigours of scientific method, of a direct cause-effect relationship and the words might be seen by such people to be standing in contrast, in their place in the advertisement, with the material following after, which speaks of scientific studies of the relationship between passive smoking and risk to health. However, this would not necessarily have been the position in respect of readers of the class under consideration.

47. As I have said, it would be most unlikely, in my opinion, that such readers would have detected the change from the use of "cause" in the second and third paragraph to "risk" and "hazard" used in the subsequent paragraphs. Even if they had done so, it is improbable that they would have seen any significance in it. They would have been far more likely to have regarded the results of scientific inquiry which are set out in the subsequent paragraphs as being examples of the scientific activity contemplated by the third paragraph. They would have taken it that they were being told, as a fact, that scientists of repute, such as those referred to in the ensuing paragraphs had not, as a result of scientifically conducted studies or reviews, arrived at findings that there was a significant connection between cigarette smoke and disease in non-smokers. In other words, in my opinion, they could have readily been led to believe, by the crafting of this advertisement, that when the third paragraph spoke of scientific proof of cause it was referring to the same subject matter of a scientific nature as appeared in the paragraphs immediately following. It is, perhaps, worthy of note that whilst the wording of the paragraph was capable of leading to this

understanding on the part of such readers, it nevertheless, preserved to the author the right to contend that the paragraph was a strictly accurate statement, if judged by the standards of the scientifically educated.

48. I have come to the conclusion that this portion of the paragraph could reasonably have been read by a significant number of lay persons as making the representation that there was no material which satisfied reputable scientists that there was a significant connection between passive smoking and risk of illness in non-smokers. As such, it was a representation that opened the way to the representations made thereafter, namely that, in studies and reviews cited, scientists had, in fact, found that there was no such significant connection.

49. The simple fact was, as is abundantly shown in the material referred to compendiously in Hill J's reasons for judgment, that there were a number of epidemiological studies conducted by scientists of repute which reported connection between passive smoking and lung cancer and the other diseases mentioned. The existence of this material rendered the representation, as made to the class under consideration, false, misleading and deceptive.

50. Even if I am in error in placing this construction upon this portion of the paragraph, I am satisfied that the same result would flow if the word "cause" were to be held necessarily to convey the meaning of "result in" rather than "create the risk of". The 1986 Surgeon-General's Report, as already indicated, produced a finding which, in my view, must necessarily be labelled "scientific", that passive smoking was a cause of lung cancer. The precise finding may not have been available at the date of the advertisement but it is clear that the primary materials that led to the finding were in existence and available.

51. I am therefore satisfied that the paragraph constituted a breach of s 52 of the Act in so far as it related to the disease of lung cancer. I should add that I am also clearly of the view that whether one adopts the meaning of this portion of the paragraph that I favour or the meaning which gives the stricter operation to the word "cause", the paragraph is misleading and deceptive in relation to the illness of asthma. This matter has been fully dealt with in the reasons of Sheppard J. I respectfully agree with his Honour's conclusion that, at least to a significant proportion of people, an attack of asthma would be regarded as an occurrence of disease or illness. They would not be deluded in holding such a view, notwithstanding that a significant proportion of the population might take the view that the underlying pathological state of the airways could properly be regarded as "asthma". There was ample evidence before his Honour that cigarette smoke in the air could precipitate an asthma attack. Such attacks can be significantly distressing, life threatening and even fatal. Those members of the reading public who considered that an asthmatic attack was an illness or disease were, in my opinion, reasonably entitled so to do with out thereby doing violence to the language. Those people would have been told by this advertisement, in an authoritative factual way, that it was not scientifically established that environmental tobacco smoke could bring on such an attack. That statement would have been, as the primary judge and Sheppard J have found, misleading, deceptive, and a breach of s 52 of the Act. I respectfully agree.

52. In summary, then, I would dismiss the appeal so far as it relates to the question of breaches of s 52 of the Act. I uphold the learned primary judge's decision that such breaches occurred, but for reasons which differ from his. I have found the two major portions of the paragraph to have been misleading and deceptive to the section of the reading public which I have considered. I should perhaps add that I find that the paragraph when read as a whole, in its context in the advertisement, would have conveyed to such readers the false message that there was no scientific material which provided results which were contrary to the results favourable to the author's thesis which were set out in the subsequent paragraphs. Indeed, I find it difficult to avoid the conclusion that the author must have been aware that this message could be so conveyed and did nothing to prevent it, thereby taking the risk of misleading a substantial group of readers.

53. On the question of remedy, I am satisfied, for the reasons given in the judgments of Sheppard J and Hill J that the specific relief granted by the learned trial judge must be set aside. I agree that, before this Court makes any final decision on what, if any, relief should be granted, the opportunity should be afforded to

both the appellant and the respondent to make further submissions on that subject and also on the question of costs.

HILL J. The appellant, The Tobacco Institute of Australia, appeals against the decision of a judge of this court, (Morling J) wherein his Honour found that it had contravened the provisions of s.52 of the Trade Practices Act 1974 ("the Act") by reason of the publication of an advertisement on 1 July 1986 in several newspapers distributed in Australia. His Honour granted injunctive relief and ordered the appellant to pay the costs of the respondent, the Australian Federation of Consumer Organisations Inc.

2. The advertisement was in the following terms:

" Advertisement A message from those who do ... to those who don't Some non-smokers are annoyed by cigarette smoke. This is a reality that's been with us for a long time. Lately, however, many non-smokers have been led to believe that cigarette smoke in the air can actually cause disease. And yet there is little evidence and nothing which proves scientifically that cigarette smoke causes disease in non-smokers. The London Times reported findings from the Institute of Cancer Research in Surrey, England, published in this month's edition of the 'British Journal of Cancer', that 'passive smoking' for life-long non-smokers carries no significant increase in the risk of lung cancer, bronchitis or heart disease (all allegedly associated with smoking). The Institute's conclusions are based on a wealth of statistical detail from a study involving 12,000 people. In a study by a Vice-President of the American Cancer Society in 1981 which involved 175,000 people, it was reported that 'passive smoking' had 'very little, if any' effect on lung cancer rates among non-smokers. In the follow-up study published in 1985, no statistically significant increase in risk was reported. Researchers at the Harvard School of Public Health found that a non-smoker would have to spend 100 hours straight in the smokiest bar to 'absorb' the equivalent of a single filter tip cigarette. Major reviews on 'passive smoking' over the last few years have concluded that 'passive smoking' cannot be shown to be a health risk. The weight of evidence is summed up in the remarks at the conclusion of the 1984 Vienna Health Conference which was held in co-operation with the World Health Organisation: 'should law makers wish to

take legislative measures with regard to passive smoking, they will, for the present, not be able to base their efforts on a demonstrated health hazard from passive smoking'. Often our own concerns about health can take an unproven claim and magnify it out of all proportion; so what begins as a misconception turns in a frightening myth. Alright, cigarette smoke may be annoying to some non-smokers, but how shall we deal with these problems? Confrontation? Segregation? Legislation? No. We think annoyance is neither a governmental nor a medical problem. It's a people problem. Smokers can help by being more considerate and responsible. Non-smokers can help by being more tolerant. And both groups can help by showing more respect for each others rights and feelings. Don't let intolerant minority pressure groups use you to create divisions between Australians. Authorised by John Dollisson Tobacco Institute, Gold Fields House, Sydney." 3. The hearing, before Morling J, occupied 91 days. Evidence was taken, not only in Australia, but also in the United Kingdom. His Honour's judgment on the merits occupies 210 typed pages. There were additional judgments, dealing specifically with an application by the appellant to adduce new evidence after the date of the initial judgment, but before orders were finally made, the form of the injunctive relief and the question of costs. Each of the matters dealt with in these judgments is also at issue in the present appeal.

4. It is difficult, in a short compass, to summarise his Honour's judgment. Suffice it to say here, that his Honour found that the advertisement was published by the appellant in trade or commerce, that paragraph 3, the only matter in issue before him, was not a statement of opinion, but rather was expressed as a statement of fact. His Honour found that the persons to whom the advertisement was directed, the general reading public, would understand the words "evidence... that cigarette smoke causes disease" as referring to data or material which affords grounds for believing that cigarette smoke causes disease in non-smokers. The words "scientific proof" his Honour said were satisfied when the data in support was convincing or compelling. Thus his Honour expressed the view that most readers would give the expression "nothing which proves scientifically that cigarette smoke causes disease in non-smokers" the meaning "nothing which affords compelling or convincing evidence that cigarette smoke causes disease in non-smokers".

5. His Honour accepted into evidence not only the published results of studies and research work, including the collection of data which his Honour referred to as "primary articles", but also, against the objection of the appellants, a number of reports issued by scientific organisations and professional bodies which had considered the question whether cigarette smoke adversely affected the health of non-smokers, which his Honour referred to as "major reviews". For convenience, I will adopt the same terminology. However, his Honour expressed the view that his decision would have been the same had he admitted only the primary articles.

6. In addition, his Honour heard evidence from a large number of eminent scientists, epidemiologists, toxicologists and statisticians, commenting upon the state of knowledge of the association between cigarette smoke and disease, not only as at the date of publication of the advertisement but also thereafter

until the date of the trial. A submission of the appellant, that the only relevant date for examining the correctness of the statement was the date of its publication, was rejected on the grounds that the statement of claim was to be read as alleging that the appellant had continued and threatened to continue to engage in the conduct complained of. In the result, the injunctions granted restrained the appellant not only from publishing the advertisement, but, inter alia, also from:

"... making statements in trade or commerce that it is the fact that: (a) there is little evidence and nothing which proves scientifically that cigarette smoke causes disease in non-smokers; (b) there is little evidence that cigarette smoke causes lung cancer in non-smokers; (c) there is nothing which proves scientifically that cigarette smoke causes lung cancer in non-smokers; (d) there is little evidence that cigarette smoke causes respiratory disease in children under the age of one year; (e) there is nothing which proves scientifically that cigarette smoke causes respiratory disease in children under the age of one year, (f) there is little evidence that cigarette smoke causes attacks of asthma in non-smokers; (g) there is nothing which proves scientifically that cigarette smoke causes attacks of asthma in non-smokers; (h) there is little evidence that cigarette smoke causes otitis media in children." 7. The judgment contains, in some detail, a summary of the evidence as understood by the judge below, both as to the written material (the primary articles and the major reviews) and as to the oral evidence. This evidence concerned the association between what is generally referred to as "passive smoking" and lung cancer, respiratory disease in young children, asthma and otitis media (middle ear effusion or "glue ear"). His Honour's summary of the evidence was criticised before us as being, in many respects, both incomplete and in some respects wrong.

8. His Honour concluded from his examination of the evidence that the applicant had established, in relation to the disease of cancer, that there was, as at 1 July 1986, more than a little evidence that cigarette smoke caused lung cancer in non-smokers. His Honour said:

"So far from there then being little evidence that cigarette smoke caused lung cancer in non-smokers, there was much evidence to that effect. That was the situation, even if only the data referred to in the primary articles is regarded as evidence for the purposes of the

advertisement. Measuring that evidence by any standard, it cannot be fairly described as 'little'." 9. In so doing his Honour expressed the view that he "preferred" the evidence of the applicant's witnesses on this matter. In his Honour's view the evidence of the "link" came from epidemiological studies "supported by strong biological plausibility".

10. His Honour also concluded that environmental cigarette smoke caused lung cancer. He said that he reached this conclusion from the totality of the available data and by "valid reasoning" from it. His Honour said, in a passage much debated before us:

"Once it is accepted: (a) that passive smoking involves inhalation of environmental tobacco smoke which contains carcinogens; (b) that there is no safe threshold level of exposure to carcinogens: (c) that some of the studies referred to in the primary articles show a statistically significant association between spousal smoking and lung cancer; and (d) that meta-analysis of the results in such studies discloses a statistically significant (adjusted) risk ratio of about 1.53 (Wald et al) or 1.42 (NRC report) for non-smokers living with smokers compared with non-smokers not exposed to environmental tobacco smoke; then my conclusion must be that there is compelling scientific evidence that cigarette smoke causes lung cancer in non-smokers. Although not based upon the findings made by the authors of the major reviews, my conclusion is consistent with those findings." 11. In the result, his Honour found that the third paragraph of the advertisement was erroneous when first made and that it remained so as at the date of judgment.

12. After a long analysis of the evidence of the association between cigarette smoke and respiratory disease in young children, his Honour concluded that paragraph three was "demonstrably false" in 1986 in so far as it applied to respiratory disease in children in the first year of life. His Honour said that in so doing he was "greatly impressed" by the respondent's witnesses and preferred their opinions, when in conflict with those expressed by the witnesses for the appellant.

13. In relation to asthma, there was considerable dispute as to whether there was a distinction between an underlying disease of asthma and the manifestation of that disease in asthma attacks. Again, his Honour summarised the evidence which he concluded showed overwhelmingly that passive smoking caused some people to experience attacks of asthma. He pointed out that the appellant's witnesses "virtually concede that cigarette smoke may trigger attacks of asthma". His Honour concluded that the ordinary meaning of the term asthma, and that which would be attached to it by the reader of the advertisement, was the suffering of an asthma attack and so construed:

"The evidence that cigarette smoke causes attacks of asthma is so overwhelming that I cannot accept that the draftsman of the advertisement held an opinion to the contrary. No rational basis exists for the holding of an opinion that there is little evidence and nothing which proves scientifically that cigarette smoke causes attacks of asthma." 14. Finally, his Honour reviewed the evidence concerning the association between passive smoking and otitis media. His Honour concluded: "I am not satisfied there is scientific proof of a causal association between passive smoking and otitis media, mainly

because of the cautious note of Professor Landau's answers in cross-examination. Nevertheless, I am persuaded on the strength of the oral evidence and the primary articles that there was, in 1986, more than a little evidence that passive smoking causes recurrent otitis media in children." 15. After considering discretionary matters, including whether the respondent had been guilty of laches or acquiescence, his Honour granted the injunctive relief sought and ordered the appellant to pay the costs of the respondent on an indemnity basis, having regard to the public interest involved. From these judgments, the appellant appealed to this court.

Whether the advertisement was published "in trade or commerce" 16. An initial matter debated before us was whether his Honour erred in holding that the publication of the advertisement by the appellant was conduct in trade or commerce. As this is a necessary prerequisite for the application of s.52 of the Act it is convenient to consider the appellant's submissions at the outset.

17. Both before his Honour and before us, it was accepted that the words "in trade or commerce" had to bear a restricted meaning, having regard to the decision of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594. In that case, in holding that the giving of misleading information by one employee of a commercial builder to another in the course of carrying on a building activity was not within s.52, the majority, which comprised Mason C.J., Deane, Dawson and Gaudron JJ. (at 603-4) held that s.52 referred only to:

"... conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed, to borrow and adapt words used by Dixon J in a different context in Bank of NSW v The Commonwealth [1948] HCA 7; (1948) 76 CLR 1 at 381, the words 'in trade or commerce' refer to 'the central conception' of trade or commerce and not to the 'immense field of activities' in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business. ... What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character. Such conduct includes, of course, promotional activities in relation to, or for the purposes of, the supply of goods or services to actual or potential consumers, be they identified persons or merely an unidentifiable section of the public." 18. Although the question of whether the advertisement was conduct in trade or commerce was in the present proceedings put in issue by the pleadings, little evidence was adduced by the respondent as to the activities of the appellant. In particular, no attempt was made to tender the memorandum and articles of association of the appellant or to adduce direct evidence of its activities or membership. In its defence, the appellant admitted that it was a corporation to which the Act applied, although it made no admission that it was a trading corporation. It did not deny the publication of the advertisement in a number of newspapers on 1 July 1986, nor the content of the advertisement.

19. The respondent relied upon the following evidence. First, it was clear from correspondence of the appellant that it was incorporated in Victoria and that it had an office in New South Wales. Secondly, that in correspondence with the Trade Practices Commission it had never disputed that its conduct was in trade or commerce. It may be said at the outset that nothing can be inferred from its failure so to do. Thirdly, there was evidence that it had, in newspapers, actively disputed suggestions that cigarette smoking causes disease. In the newspaper articles to which reference was made it was alleged, in effect, that the appellant

was an association of tobacco manufacturers or distributors. This material was admitted for a limited purpose only, irrelevant to the present issue, but even if it were to be regarded as evidence for all purposes, it could not be taken to be evidence of the activities of the appellant. At best it was hearsay evidence only and could not be construed as an admission by the appellant.

20. Fourthly, the respondent relied upon the evidence of Professor Witorsch. In cross-examination, Prof Witorsch was asked whether he knew of the constitution and composition of the appellant. He said that he did not know what companies comprised its organisation but that he understood that it was a trade association analogous to the Tobacco Institute in the United States. He knew nothing of its constitution or component companies. He gave evidence that the United States body funded consultants from universities and that he had attended a conference which had been funded by the United States organisation. Also relied upon, in connection with this evidence, was a study conducted in the United States by the Roper Organization Inc, which stated that it was the Sixth Biennial National Opinion Survey conducted by that body for the United States Tobacco Institute dealing with public attitudes towards the smoking and health issue and attitudes towards both the tobacco industry and government regulation of it. The respondent relied, as well, upon the fact that the appellant had called itself no evidence to contradict the inferences which were said to arise from this evidence.

21. On the basis of this evidence, his Honour found that the advertisement of the appellant was conduct in trade or commerce. His Honour said:

"Cigarettes are articles of commerce and restrictions on their use by consumers may render them less attractive as such, resulting in adverse economic consequences for their manufacturers and distributors. No doubt the participation by a trading corporation in a debate on a matter of public or social controversy will often not be conduct in trade or commerce. But the publication of the advertisement in the present case should not be viewed in isolation. It was published by a trading corporation which, so it may be safely inferred, was concerned to ensure that the sale of cigarettes would not be adversely affected by a belief on the part of the public as to a possible causal link between cigarette smoke and disease in non-smokers. The existence of such a link, or of evidence suggesting it, could affect the sale of cigarettes in various ways, eg public pressure to restrict the smoking of cigarettes in places where non-smokers are present. The advertisement had the potential, and was no doubt intended, to protect the commercial interests of cigarette manufacturers and distributors. Accepting that conduct 'in trade or commerce' is confined to conduct which is itself an aspect of activities which, of their nature, bear a commercial character I think the proper conclusion is that the publication of the advertisement was conduct 'in trade or commerce'. Advertising products for sale is an aspect or element of the selling of those products... Advertising may serve a number of purposes. One purpose may be to refute criticism of the seller's products thus protecting the market for them. The advertisement published by the respondent was calculated to achieve such a purpose. To borrow the words ... quoted in Concrete Constructions ... the publication of the advertisement was an activity within 'the central conception' of trade or commerce. In my opinion the publication of the advertisement was conduct 'in trade or commerce'."

22. For the appellant it was submitted that the onus was upon the respondent to establish that the conduct in question was in trade or commerce. So much may be accepted. It was submitted that the evidence adduced did not establish that the placing of the advertisement by the appellant was conduct in trade or commerce. Next, it was submitted that his Honour had, in the passage cited, concluded that the appellant was a "trading corporation" yet there was no evidence of this. Finally, it was submitted that the Act should be construed against the background of constitutional power (Constitution s.51(xx)) and that so construed it was not sufficient that the appellant be shown to be a corporation of the kind referred to in the corporations power, but in addition, the Act had to be shown to be a law dealing with its trading.

23. Because the third submission was thought to raise a question of the interpretation of the Constitution, notices were given in accordance with s.78B of the Judiciary Act to the Attorneys-General of the States and the Commonwealth. None of the States wished to intervene, but the Attorney-General of the Commonwealth intervened to argue a constitutional question raised by the notices, namely whether the Act was in excess of the power of the Commonwealth because it went beyond regulating the trading activities of a trading corporation, and hence was not a law with respect to such corporations.

24. Of the three submissions, the first two are of the greatest significance. Despite the form of the notices given pursuant to the Judiciary Act, the appellant did not seek to argue that the Act was outside the power of the Commonwealth. Rather, it accepted that the Act was within power, but sought to argue that its ambit should be construed having regard to the limits of the corporations power. It is convenient to dispose of the third submission first.

25. Although it may be accepted that s.52 of the Act must be read against the background of the power of the Commonwealth Parliament to legislate, the words of the section must be given their ordinary meaning, having regard to the legislative purpose enshrined in them. No doubt if more than one construction were available, a construction would be preferred which preserved the validity of the legislation, rather than one which had the result that the section was ultra vires: Davies and Jones v Western Australia [1904] HCA 46; (1904) 2 CLR 29 at 43. That, however, is not the case here.

26. Section 52 of the Act is not expressed as applying only to trading corporations, so that the argument can not validly be put that it must be construed as limited to the trading operations of those trading corporations so as to fall within power. If it were, it might become relevant to resolve the apparent conflict of views in the High Court in Actors and Announcers Equity Association v Fontana Films Pty Ltd [1982] HCA 23; (1982) 150 CLR 169 at 182-3 per Gibbs C.J., with whose reasons Wilson J agreed, at 207-8 per Mason J, with whose judgment Aickin J agreed, at 212 per Murphy J, at 195 per Stephen J and at 220-221 per Brennan J. Section 52 is a prohibition directed at corporations, defined in s.4(1) by reference, inter alia, to the classes of corporations referred to in s.51(xx) of the Constitution. However, there is a further limitation to be found in s.52. The conduct proscribed must be conduct in trade and commerce. Thus parliament has itself set the boundaries of the application of s.52. While, no doubt, there are difficulties, as Concrete Constructions demonstrates, with the true meaning of the words "in trade or commerce" as they appear in the section, the resolution of those difficulties does not require regard to be had to the Constitution. None of the members of the High Court in Concrete Constructions adopted such an approach.

27. The more difficult question is whether there was sufficient evidence before his Honour to support the conclusion of fact that the advertisement was placed by the appellant in trade or commerce.

28. His Honour appears to have given some weight to a finding that the appellant was a trading corporation. Although, as already indicated, the appellant had in its defence admitted that it was a corporation to which the Act applied, it had made no admission as to which limb or limbs of the definition of "corporation" in s.6 of the Act it came within. It was submitted that the appellant may simply have been the holding company of a company incorporated in the Australian Capital Territory, a fact which would clearly not have assisted in the conclusion that its activity in the present case was in trade or commerce.

29. While the evidence on the question is unfortunately meagre, I say unfortunately, because in matters of this kind, absent an admission, it is imperative that evidence be led of all ingredients of the prohibition in s.52, including jurisdictional facts, I have reached the view that there was sufficient evidence before his Honour to support the conclusion reached.

30. The present advertisement was not placed in one newspaper as an isolated incident. It was but one advertisement placed in a number of newspapers at the same time. The subject matter of the advertisement is also of significance. Publication followed, so it was said by the appellant from the bar table (the evidence before the court is not strong on the matter), a very public debate on passive smoking. The advertisement was not intended as a learned contribution to a scientific debate. It was not published in a learned scientific journal. It was directed to the public at large, smokers and non-smokers. It was couched in language designed to persuade, rather than to instruct. It seems highly unlikely that a corporation, lacking a significant commercial interest in the tobacco industry, would have gone to the expense of publishing advertisements in various newspapers of national circulation merely to influence public opinion on a debate of health policy. Rather, it may be inferred, that the corporation which placed the advertisement did so to allay the fears of those who smoked and thus discourage them from quitting and to discourage those who did not smoke from applying pressure on those who did to reduce the occasions on which they smoked, or perhaps give up altogether. In either way the advertisement on its face was designed either to promote the further sale of cigarettes or to arrest a decline in such sales.

31. These matters, coupled with the evidence of Prof Witorsch, to which reference was earlier made, enable an inference to be drawn that the appellant was a trade association with a purpose of promoting the interests of tobacco companies and in particular promoting the sale of cigarettes, themselves clearly enough articles of commerce. This inference can more readily be drawn from the failure of the appellant itself to call any evidence in rebuttal in circumstances where the parties, in defining the issues before his Honour, gave no emphasis to the question whether the conduct was conduct in trade or commerce.

32. Concrete Constructions does not limit the category of acts which are in trade or commerce to acts of sale and purchase; nor does it limit the category of companies which may act in trade or commerce to companies which buy or sell. It is true that the court expressed the view that the conduct impugned by s.52 must be conduct within "the central conception of trade and commerce" but their Honours indicate shortly thereafter what is meant by "central conception" in this context. Of particular significance here is that their Honours point specifically to conduct of a corporation representing or promoting the interests of certain others as included within the "central conception". There can be no doubt that a corporation, formed to promote the interests of a particular industry or whose activities are directed at representing members of that industry in promotional activities, acts "in trade or commerce" when conveying representations about that industry's product to the general public.

33. It follows that in placing the present advertisement in national newspapers the appellant was engaging in conduct in trade or commerce. It is therefore unnecessary to consider whether, at this late stage in the litigation, leave should be given to the respondent, as sought by counsel on its behalf, to adduce further evidence on the matter.

The meaning of the representation 34. The portion of the advertisement, the publication of which by the appellant is said to constitute misleading conduct, makes representations to its readers. Those representations are said to be false and therefore misleading. Logically, therefore, the first inquiry must be to ascertain what representations are made by this material. It is only when this question is determined that the question of the falsity or otherwise of the representations can be investigated.

35. This involves two separate, albeit related, questions which were debated before us. The first is whether the portion of the advertisement sued upon should be seen to be a statement by the appellant of its opinion on a medical matter. The second is the meaning of the words used in the advertisement.

Statement of opinion or statement of fact 36. For the appellant it was submitted that of necessity the statement in paragraph three of the advertisement had to be characterised as a statement of opinion, a judgment or conclusion. This was said to follow from the subject matter of the advertisement, its content and context. It was submitted that the context had to be viewed both by reference to matters internal, as well as external, to the advertisement. It was said that the evidence established that in the field of discourse to which the advertisement was said to refer, namely medical science, the question of the association of environmental tobacco smoke to disease was a matter of assessment, evaluation and opinion. There was no fixed, objective datum against which the truth or falsity of paragraph three could be judged. Further, the evidence established, it was said, that there were, among medical scientists, different views on the matter honestly held. The subject matter was one where there was room for different opinions.

37. The necessary result of the foregoing submissions was submitted to be that the statement could not be regarded as other than an expression of opinion. No one reading it in the context of the whole advertisement could form, it was submitted, any other view.

38. A study of the wording and structure of the advertisement supported, it was argued, this approach. The advertisement was one inserted by the Tobacco Institute of Australia Ltd. The second paragraph of the advertisement made it clear to the reader that there was a group in the community advancing a view as to the dangers of environmental tobacco smoke such that non-smokers may be led to a particular belief as to the relationship of environmental tobacco smoke and disease. The third paragraph accordingly commenced with the words "And yet", thus making it clear, so it was said, that what was being proffered was a contrary point of view. Thereafter, the advertisement pointed to a study and what it referred to as "major reviews" in support of the opinion proffered in paragraph three. It referred to the "weight of evidence", a matter relevant to opinion on the quality of the evidence cited. The advertisement thus spoke of claim and counter-claim on the matter.

39. The judge below rejected this submission on the basis, inter alia, that the advertisement had not specified that it was an expression of opinion. However, the appellant submitted it was not necessary that words specifically expressing the matter to be one of opinion be used in order that there be found to be an expression of opinion, rather than a statement of fact. We were referred to a number of decisions of this court in which it had been held that particular words were to be construed as opinion rather than as allegations of fact. The significance of the distinction was to be found in what was said by the full court of this court in Global Sportsman Pty Limited v Mirror Newspapers Ltd [1984] FCA 180; (1984) 2 FCR 82 where Bowen C.J., Lockhart and Fitzgerald JJ. said of articles suggesting a split and disaffection in Australian cricket (at 88):

"Whether or not s.52(1) is contravened does not depend upon the corporation's intention or its belief concerning the accuracy of such statement, but upon whether the statement in fact contains or conveys a meaning which is false; that is to say whether the statement contains or conveys a misrepresentation. Most commonly, such a statement will contain or convey a false meaning if what is stated concerning the past or present fact is not accurate; but a statement which is literally true may contain or convey a meaning which is false. Many statements, for example, promises, predictions and opinions, do involve the state of mind of the maker of the statement at the time when the statement is made. Precisely the same principles control the operation of s.52(1) with respect to the making of such statements. A statement which involves the state of mind of the maker ordinarily conveys the meaning (expressly or by implication) that the maker of the statement had a particular state of mind when the statement was made and, commonly at least, that there was basis for that

state of mind. If the meaning contained in or conveyed by the statement is false in that or in any other respect, the making of the statement will have contravened s.52(1) of the Act... ... An expression of opinion which is identifiable as such conveys no more than that the opinion expressed is held and perhaps that there is basis for the opinion. At least if those conditions are met, an expression of opinion, however erroneous, misrepresents nothing." 40. The advertisement in Industrial Equity Ltd v North Broken Hill Holdings Ltd (1986) 9 FCR 385 concerning the applicant's proposal to acquire shares in another company, was held by Burchett J to be a statement of opinion rather than a statement of fact and in the result the application was dismissed. The case was one where, as his Honour said, the context in which the statement was made required the conclusion that the advertisement was a statement of opinion. It did not assert any matter of "physical observation". This was so, notwithstanding that no words directly expressing an opinion were to be found in the advertisement. If a reader had taken the advertisement as a statement of fact that would have been a misconception on the part of the reader and could not have led to a breach of s.52(1): cf Parkdale Custom Built Furniture Pty Ltd v Puxu [1982] HCA 44; (1982) 149 CLR 191 at 198-9, 203-4.

41. Likewise the case of Glorie v WA Chip and Pulp Co Pty Ltd [1981] FCA 224; (1981) 55 FLR 310 afforded an example of a statement, there contained in a film produced by a trade association of timber producers concerning timber operations, which was held by Morling J to involve no more than a mere statement of opinion. See too Bateman v Slatyer (1987) 71 ALR 553.

42. No case will afford a guide to any other case, since it must essentially be a question of fact whether a particular formulation of words expresses merely an opinion or a statement of fact. However, two observations may be made. First, the subjective purpose or motivation of the maker of the statement will not be of much significance. It is the reader's perception of the maker's intention which will ordinarily be the significant matter. The question will generally be resolved by looking to the persons to whom the statement was directed and asking whether any members of that class of persons would reasonably understand the statement to be one of fact or of opinion.

43. Where, as here, the statement is directed to the public at large, it must be borne in mind that the class of persons will include the intelligent and the less intelligent, the informed and the less informed. The fact that some members of the class may perceive the statement as one of opinion will not avail a respondent if a not insignificant class of persons could reasonably be expected to perceive it as a statement of fact.

44. Secondly, a statement will most usually be seen as a statement of fact if it is one which can be measured against an objective criterion. Thus, generally, where no objective criterion exists, so that of necessity what is said must depend upon judgment or opinion, the statement will be seen not as a statement of fact but as one of opinion.

45. The present is not a case where evidence has been adduced from members of the public as to the manner in which they perceived the advertisement. However, in my view, the advertisement is capable of being perceived as a statement of fact by a not insignificant section of the public, even if some members of the public, well informed, would not so see it.

46. For the purposes of this argument it may be assumed that the evidence in the case demonstrates that there are conflicting views bona fide held by scientists, both as to whether there is more than a little "evidence" that environmental tobacco smoke causes disease and as to whether there is "scientific proof" that it does. This being so, in the universe of scientists there is no objective criterion upon which the truth of the assertion in the advertisement can be judged. But the difficulty with the appellant's submission is that a reader of the advertisement, unaided by the exhaustive discussion of the evidence with which we have been assisted, would not be so well informed. Rather, that reader might not unreasonably conclude, from the terms of the advertisement, that scientists had reached a conclusion on the matter which formed an

objective criterion upon which to judge the advertisement. In reaching that conclusion, the reader would not have been misled by a misconception of his own. Rather, that is a misconception which the advertisement in fact fosters.

47. It follows that the advertisement is reasonably open to be interpreted either as a statement of opinion on the part of the appellant, or as a statement of fact made by it. If the former, it will be misleading, or will be likely to be misleading, if the respondent has shown that the view was not bona fide held by the appellant (and this is not suggested) or that the view was not reasonably capable of being held. If the latter, the paragraph will be misleading or likely to be misleading (ie to lead the reader into error) if the statement of fact made in it be false. The latter was the issue tendered by the respondent for trial by virtue of the pleadings and the issue considered by his Honour below. In holding that paragraph three of the advertisement should be seen as a statement of fact, his Honour was not in error.

48. Before turning to the vital question of the meaning of the advertisement, a further comment should be made. There is a difficulty in pursuing the issue of whether the statements made in paragraph three are likely to lead a reader of the advertisement into error when the subject matter is such that scientists have not yet reached a concluded view upon it, or put in another way, when, despite the terms of the advertisement suggesting to the contrary, there is, in fact, no objective criterion upon which the truth or falsity of the representation made in it can be judged. Two comments may be made. The first is that in such a case the statement in question will be misleading, not because it is objectively true or false, but because it represents that there is an objective truth when that is not so, at least on the present state of knowledge. The respondent did not put its case on this basis and I must accordingly put that matter to one side. The second is that if the case is to be pursued on the basis that the representation has to be shown to be objectively false, the burden of proof will reside with the applicant in the proceedings. If the evidence is such that scientists are so evenly divided on the issue that the court is unable to determine the truth or falsity of the issue on the balance of probabilities, then the applicant will fail.

49. The respondent, in the present case, by adopting the second position and not pursuing the first, put the court in a most difficult position. At the end of the day, the question of the relationship between environmental tobacco smoke and disease is a matter for scientists trained in the area, it is not a matter for a court of law which is ill-equipped to determine it and to make the skilled judgments upon which such a question depends. It should, accordingly, be borne in mind that the court, in the present proceeding, is not deciding whether environmental tobacco smoke does in fact cause disease. The issue before us is a more limited one, namely, whether, on the evidence adduced below, the applicant has established, on the balance of probabilities, that the material in paragraph three of the advertisement was misleading, or was likely to mislead, members of the public to whom the advertisement was addressed.

The meaning of paragraph three 50. The elucidation of the meaning of the words used in paragraph three is, like the question whether the paragraph is a statement of fact or opinion, made more difficult because more than one possible construction may be adopted by a particular reader, depending upon his or her state of scientific knowledge and upon his or her general intelligence and understanding.

51. Mr Heydon QC in his work "Trade Practices Law" (at 11.430) expresses the view that there are three divergent approaches to the general issue of the minimum standard to be expected of persons to whom misleading conduct is expressed and that these approaches are to be found in the judgments respectively of Gibbs C.J. and Murphy J in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at 199, 214-5 and in the judgment of Franki J in this court in Annand and Thompson Pty Ltd v Trade Practices Commission [1979] FCA 36; (1979) 40 FLR 165 at 176.

52. In Parkdale, there were similarities and differences between the products of the appellant and those of the respondent. The extent to which the differences would be observed depended upon the care taken by, and the skill and knowledge of, the prospective purchaser. Gibbs C.J., who was critical of the breadth of s.52 of the Act, said (at 199):

"Section 52 does not expressly state what persons or class of persons would be considered as the possible victims for the purpose of deciding whether conduct is misleading or deceptive or likely to mislead or deceive. It seems clear enough that consideration must be given to the class of consumers likely to be affected by the conduct. Although it is true, as has often been said, that ordinarily a class of consumers may include the inexperienced as well as the experienced, and the gullible as well as the astute, the section must in my opinion be regarded as contemplating the effect of the conduct on reasonable members of the class. The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will of course depend on all the circumstances." 53. Mason J (at 210) looked to what the "ordinary purchaser" would notice as to the similarities and differences between the two products.

54. Murphy J, who dissented in the result, said of the persons to be protected by the Act (at 214-5):

"The prudent buyer may not be misled, but not all buyers are prudent. The Act aims to protect the imprudent as well as the prudent. What degree of imprudence in (sic) protected? In applying a similar provision of the Consumer Protection Act 1969 (NSW) the Industrial Commission said that an advertiser's responsibility extended to readers both 'shrewd and... ingenuous,... educated and... uneducated and... inexperienced in commercial transactions... An advertisement may be misleading even though it fails to deceive more wary readers'... In the United States the standard adopted under the Federal Trade Commission Act 1914 in relation to a somewhat similar provision takes into account 'the ignorant, the unthinking and the credulous...'". 55. Brennan J (at 225) spoke of the consumer "not labouring under any mistake or imperfection of understanding of law."

56. In Annand and Thompson Pty Ltd, Franki J expressed the test to be (at 176):

"... whether in an objective sense the conduct of the appellant was such as to be misleading or deceptive when viewed in the light of the type of person who is likely to be exposed to that conduct. Broadly speaking it is fair to say that the question is to be tested by the effect on a person, not particularly intelligent or well informed, but perhaps of somewhat less than average intelligence and background knowledge although the test is not the effect on a person who is, for example, quite unusually stupid." 57. The view of Franki J was, as Heydon points out, supported by a majority of the full court of this court in Siddons Pty Ltd v The Stanley Works Pty Ltd (1991) 29 FCR 14 at 17-18, which rejected the approach of Murphy J in Parkdale. Reference may be made as well to the judgment of Lockhart J in Finnucane v NSW Egg Corporation (1988) 80 ALR 486 at 515-6 referred to in Siddons. However, Mr Heydon suggests that the view of Murphy J may arguably have been accepted by Deane and Fitzgerald JJ. in Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177 at 202, where their Honours said:

"... once the relevant section of the public is established, the matter is to be considered by reference to all who come within it, 'including the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations'...". 58. Perhaps too much emphasis can be placed on this apparent divergence of opinion. In the end, the question is not whether account is to be taken of the effect of the conduct upon the gullible, but whether the conduct in question is misleading or deceptive. The statutory question is best tested in a case such as the present, by reference to the effect of the conduct upon the class of persons who are likely to read and consider the advertisement, that class having the qualities discussed by Franki J. The extremely stupid, and perhaps the gullible, may well be excluded from the class of persons who read such advertisements in newspapers. Some members of the class may, in reading the advertisement, be misled by a misconception of their own, howsoever arising. Those persons will not have been led into error by the representation made in the advertisement.

59. However, as was observed by Sheldon and Sheppard JJ. in CRW Pty Ltd v Sneddon (1972) 72 AR(NSW) 17 at 28 (the context was the Consumer Protection Act 1969 (NSW)):

"An advertisement published in a newspaper is not selective as to its readers. The bread is cast on very wide waters. The advertiser must be assumed to know that the readers will include the shrewd and the ingenuous, the educated and the uneducated and the experienced and inexperienced in commercial transactions. He is not entitled to assume that the reader will be able to supply for himself or (often) herself omitted facts or to resolve ambiguities. An advertisement may be misleading even though it fails to deceive more wary readers." 60. Where, as in the present case, the advertisement is capable of more than one meaning, the question of whether the conduct of placing the advertisement in a newspaper is misleading or deceptive conduct must be tested against each meaning which is reasonably open. This is perhaps but another way of saying that the advertisement will be misleading or likely to mislead or deceive if any reasonable interpretation of it would lead a member of the class, who can be expected to read it, into error: Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 at 81 per Northrop J and cf the approach taken by Mason J in Parkdale.

61. The range of meanings of the words used in paragraph three of the advertisement, and in consequence the representation which those words are capable of conveying, must, of necessity, be determined having regard to the context of the paragraph in the advertisement as a whole.

62. The second paragraph sets the scene for the advertisement. It points out that some unidentified person has, or some unidentified persons have, led many non-smokers to the belief that cigarette smoke in the air can actually cause disease. Paragraph three is thus to be seen to be directed at countering what the advertisement as a whole clearly suggests to be false, namely that environmental tobacco smoke actually, ie in accordance with the facts, causes disease.

63. When the relevant part of the advertisement uses the word "evidence" it may reasonably be understood as doing so in the ordinary dictionary sense of the word, namely: "ground for belief; that which tends to prove or disprove something", (The Macquarie Dictionary, Second Revision). For the appellant, however, it was suggested that the word is used in the context of the universe of discourse of scientists. Thus, the criterion of that which tends to prove or disprove something will, so it was suggested, be the criterion of scientists expert in the area, not the criterion of lawyers or any other lay persons. On the other hand, it may be argued, the dichotomy between evidence and scientific proof permits a distinction reasonably to be drawn between that which the reader may reasonably accept as evidence, on the one hand, and scientific

proof which is within the realm of science. In my view, this second view is reasonably open and, it being more adverse to the appellant than the first, may be adopted to test whether the appellant's conduct offended s.52 of the Act.

64. The remaining part of the advertisement purports to deal with the findings of the Institute of Cancer Research in Surrey, based on a study involving 12,000 people; a study by the American Cancer Society involving 175,000 people; together with a follow-up study performed by the same body and research conducted at the Harvard School of Public Health. These three studies cast light upon what is contemplated by "evidence", namely experimental studies conducted into the relationship between environmental tobacco smoke and disease.

65. However, the range of available evidence is not, in my opinion, restricted to the results of such scientific studies, as it would be if the only reasonable interpretation of the advertisement were one where the criterion of evidence was restricted to the universe of discourse of scientists. A reader of the advertisement may reasonably construe it as involving a distinction between that which he or she might regard as evidence of cause and that which the scientist may regard as proof of cause. So read, regard may be had to all material which, at the date of publication, could reasonably be regarded by the ordinary reader as evidence. This would include not only the results of studies and the reports thereon of the researchers (accepted by both sides as being comprehended within the word evidence), but also the major reviews published at that time. For this purpose, reviews published after the date of the advertisement must be discarded. Not being published at that time, they could not reasonably be taken to be evidence existing then.

66. In the advertisement, the word "evidence" is used in conjunction with the adjective "little". The position of "little evidence" is in opposition to the "nothing" which proves scientifically. In tone, the paragraph is dismissive of the available evidence. In my view, the statement can reasonably be read as meaning that while there is some evidence of the causal relationship to which the advertisement refers, that evidence is insignificant.

67. What the first part of paragraph three is concerned with is evidence of cause. The appellant stressed that there was a distinction drawn by scientists between cause and association. Data was available at the time of publication of the advertisement which showed an association between, for example, lung cancer and environmental tobacco smoke. As will be seen, results of some experimental studies demonstrated that exposure to environmental tobacco smoke increased the risk of lung cancer in non-smokers. Evidence of risk was not, however, it was submitted, at least where the studies were not statistically significant, evidence of cause. Nor would it be seen as such by scientists.

68. However, the ordinary reader could not unreasonably, in my opinion, regard evidence of risk as being some evidence of an underlying causal relationship, albeit that the studies upon which the results of increased risk were shown did not demonstrate results which, in accordance with the conventions adopted by statisticians, were statistically significant.

69. Counsel for the appellant, however, submitted that nowhere in the pleadings or particulars did the respondent assert that paragraph three of the advertisement should be read as if risk and cause were synonymous. Indeed, it was submitted that had the case been run by the respondent as requiring resolution of the question whether there was evidence of risk of disease arising from environmental tobacco smoke, the appellant may well have conceded the point, and perhaps a year of hearing may have been avoided. The respondent should, it was submitted, be now precluded from arguing the point.

70. The respondent conceded that risk and cause were not synonymous, albeit adopting the perhaps ambiguous position of relying upon the context of the advertisement as determining the meaning of the expression cause. One of the real difficulties in the present case arises from the refusal, or inability, of the respondent to particularise at the outset precisely what the words of paragraph three complained of are said to mean. I have read the correspondence that passed between the parties prior to the trial on the question of

particulars and the interchanges between senior counsel for both parties and the judge below when the case was opened for the applicant. The respondent before us, it is true, always asserted that the issue was the meaning of the advertisement in the context in which it appeared, but shied away from suggesting any meaning of the words used other than their ordinary meaning.

71. The clear allegation in the pleading by the present respondent was that, contrary to paragraph three, it was not the case that there was little evidence and nothing which proved scientifically that cigarette smoke causes disease in non-smokers. After the case had been opened below, his Honour observed that a case could have been particularised on the basis that, read as a totality, the advertisement conveyed the message that there may be risks associated with passive smoking but that they are not to be worried about. His Honour said (AB 1442):

"But I do not take that case to be particularised as a separate case, and if he wants to put that as a separate case, I think he would have to amend, but he disclaims that he has a separate case. He says, rightly or wrongly, that he is going to seek to have paragraph 3 construed as part of the overall document and give the words there some colour when it is put in its context...". 72. No application was ever made to his Honour to amend the pleadings. However, I do not see a need so to do. When his Honour referred to the necessity to amend, his Honour did so not in the context of preventing the presentation of a case concerning the meaning of paragraph three in its context, but rather in the context of precluding the applicant from presenting as well a separate case that the advertisement conveyed the impression that having regard to the increased risk of disease there was nothing to worry about.

73. His Honour, in the judgment appealed against, assayed no specific interpretation of the word "cause". Nevertheless, a perusal of the reasons suggest that his Honour did substantially equate "cause" and "risk" and in my view this was a view open to his Honour to take. The difficulty now is that it is a view eschewed by the respondent before us, perhaps not surprisingly, having regard to the effect that strong reliance on the context of the advertisement could have on the question of enjoining for the future the use of the words in paragraph three divorced from their context.

74. Having regard, however, to the concession which has been made by the respondent before us, in my view, the word "cause" has, for the purposes of the appeal, to be construed, in its ordinary English meaning, without regard to any special meaning which it might be capable of having in the context of the advertisement as "risk". That meaning is, as resort to the dictionary reveals, to "bring about" (The Macquarie Dictionary). Environmental tobacco smoke will be taken to have caused a disease if it produces the disease as an effect.

75. In the context of the first part of paragraph three, therefore, the advertisement may reasonably be taken to be a representation that there is only an insignificant amount of material which the reader would see as tending to prove that environmental tobacco smoke brings about, or produces the effect of, disease in non-smokers. This interpretation, while not as such equating "risk" with cause, will practically bring about the same result. In my view, a reader of the advertisement faced, inter alia, with the results of studies which show that statistically there is an increased likelihood that non-smokers exposed to environmental tobacco smoke will contract a particular disease, could reasonably take the view that that increased risk is some evidence of the causal relationship referred to. Indeed, this is quite consistent with the normal use of the term "evidence". Something may be evidence of the existence of something else, even if it be only a step on the way to the proof of the existence of that other thing. It does not, of itself, have to prove that existence in order that it may be considered as evidence.

76. The second part of paragraph three, which is in juxtaposition to the first, is concerned with scientific proof of causation. The only reasonable interpretation open, in my opinion, is that this second part is concerned with conclusions which would be drawn from the totality of available "evidence" as assessed by

scientists. The evidence to which the second part has regard, must be restricted, therefore, to the materials which scientists themselves regard as evidence. The reference to "proves scientifically" makes it clear that the relevant means of proof will be those which are accepted by scientists. The issue to be proved will be whether cigarette smoke causes disease in non-smokers, that is to say, whether there is a causal relationship between environmental tobacco smoke and disease which has been the subject of proof in accordance with accepted scientific method.

77. Opinions of scientists of repute may, however, differ on the question of proof of causality. But I do not think that it follows from this that a reader of the statement could reasonably understand it to assert that there was no competent scientist working in the appropriate field of science who had concluded that environmental tobacco smoke caused, in the relevant sense, disease. A reader might understand that scientists, even reputable scientists, are capable of holding bona fide diverse views. But in this event it seems to me that the statement in the advertisement can only reasonably be understood as a representation that given that there will be some who hold diverse views, the general body of science regards the causal connection between environmental tobacco smoke and disease as not having been proved.

78. That the question of proof is one of scientific conclusion is reinforced by paragraph 9 of the advertisement which purports to summarise the conclusions reached by "major reviews". These reviews offer, so paragraph 9 informs us, a weighing of the available evidence, that is to say, an analysis of the experimental data of the type which has been discussed in the preceding paragraphs.

79. With respect, I can not accept the submission which found favour with his Honour that the words "nothing which proves scientifically that cigarette smoke causes disease in non-smokers" are to be construed as "nothing which affords compelling or convincing evidence that cigarette smoke causes disease in non-smokers". Rather, I would prefer to paraphrase the words, if indeed they need paraphrasing at all, as "nothing in the experimental studies which is accepted by science as a whole as establishing a causal relationship between cigarette smoke and disease in non-smokers".

The final expression used in the advertisement upon which comment is required is "disease". 80. While the meaning of the word disease would not be thought to be a matter of controversy, it became significant in the hearing below, in the light of evidence that environmental tobacco smoke increased the risk of asthma attacks, to consider whether the concept of disease encompassed not merely the underlying condition of asthma but also asthma attacks. This matter is, however, best left until a consideration of the evidence concerning asthma.

Evidence of cause - Cancer 81. The evidence adduced in the case, and in the result the discussion of that evidence in the judgment appealed from, largely concentrated upon cancer. As already indicated, the evidence on this point took the form of primary articles and major reviews. Having regard to the conclusion I have formed, it is unnecessary to summarise these in detail. An extensive summary is to be found in the judgment below.

82. Suffice it to say that the primary articles included a study by Trichocopoulos et al ("Lung Cancer and Passive Smoking") published in the International Journal of Cancer in 1981; a follow-up study headed by the same author in The Lancet in September 1983; a study by Hirayama, "Nonsmoking wives of heavy smokers have a higher risk of lung cancer: a study from Japan", published in the British Medical Journal of January 1981 and a follow-up study by the same author, "Cancer Mortality in Nonsmoking Women with Smoking Husbands Based on a Large-Scale Cohort Study in Japan", published in Preventative Medicine in 1984; a paper by Garfinkel, "Time Trends in Lung Cancer Mortality Among Nonsmokers and a Note on Passive Smoking", published in the Journal of the National Cancer Institute in June 1981; a study by Chan and Fung, "Lung Cancer in Non-smokers in Hong Kong", published in 1982; a study by Correa et al "Passive Smoking and Lung Cancer" published in The Lancet in September 1983; a study by Koo et al, "Active and passive smoking among female lung cancer patients and controls in Hong Kong" published in 1983; a study by Buffler et al, "The Causes of Cancer in Texas", published in 1984 in Lung Cancer: Causes and Prevention; a further paper by Garfinkel et al, "Involuntary smoking and lung cancer: A case-control

study", published in the Journal of the National Cancer Institute in September 1985; Lee et al, "Relationship of Passive Smoking to Risk of Lung Cancer and Other Smoking-associated Diseases", published in 1986 in the British Journal of Cancer; and a paper by Akiba et al, "Passive Smoking and Lung Cancer among Japanese Women", published in the September 1986 issue of Cancer Research but apparently first published prior to the date of the advertisement.

83. Of these primary articles, all but Chan and Fung (1982), Koo et al (1983) Buffler et al (1984) and Lee et al (1986) referred to an increased risk in cancer among those exposed to environmental tobacco smoke. Other primary studies referred to by his Honour were published later than the date of publication of the advertisement and may be ignored for present purposes.

84. The major reviews to which his Honour referred included:

1. The Monograph on Tobacco Smoking issued by the International Agency for Research on Cancer (The IARC Report). 2. The National Health and Medical Research Council report on Effect of Passive Smoking on Health 1986. 3. The Health Consequences of Involuntary Smoking (1986) (The United States Surgeon General's 1986 Report). 4. The National Research Council report on Environmental Tobacco Smoke 1986. His Honour inferred that the material upon which this review was based was available to the scientific community at the date of the advertisement. 85. The other major review referred to in the judgment was published after the date of the advertisement and should, in my opinion, not have been considered in this context.

86. The major reviews are not, of course, a source of original research. They offer the chance for those concerned with them to analyse and interpret data thus far gathered. By way of example, the Surgeon General's 1986 Report adopted the following summary, after considering the scientific literature:

"Previous Reports of the Surgeon General have reviewed the data establishing active cigarette smoking as the major cause of lung cancer. The absence of a threshold for respiratory carcinogenesis in active smoking, the presence of the same carcinogens in mainstream smoke and sidestream smoke, the demonstrated uptake of tobacco smoke constituents by involuntary smokers, and the demonstration of an increased lung cancer risk in some populations with exposures to ETS leads to the conclusion that involuntary smoking is a cause of lung cancer. ... The epidemiological evidence that involuntary smoking can significantly increase the risk of lung cancer in nonsmokers is compelling when considered as an examination of low-dose exposure to a known carcinogen (ie, tobacco smoke). Eleven of the thirteen epidemiological studies to date show a modest (10 to 300 percent) elevation of the risk of lung cancer among nonsmokers exposed to involuntary smoking; in six studies positive associations were statistically significant. The studies showing no or nonsignificantly positive findings were generally the

weakest in terms of sample size... study design... or quality of data... ... Although involuntary smoking can be established as a cause of lung cancer, important questions related to this exposure require further research." 87. It must, however, be noted that other major reviews had not reached such positive conclusions. Thus, in the US Surgeon General's Report of 1982 "The Health Consequences of Smoking", it was stated that limitations in data and study design precluded a judgment on causality. The report said relevantly: "currently available evidence is not sufficient to conclude that passive or involuntary smoking causes lung cancer in non smokers...". 88. The Third Report of the Independent Scientific Committee on Smoking and Health ("the Froggatt Committee"), published in 1983 had concluded (at para.35) that the reported association between passive smoking and lung cancer was speculative.

89. The National Health and Medical Research Council report of 1983 referred to there being "limited evidence" in the sense used by the IARC report of the carcinogenicity of passively inhaled cigarette smoke. This meant that a causal interpretation was credible, but that alternative explanations could not be excluded.

90. It was submitted that when regard was had to all the major reviews and the equivocation with which a number of these treated the issue of causal relationship, and to the evidence which criticised the studies the subject of the primary articles, there was at most some evidence of connection, but not evidence of causality.

91. For the purposes of determining the falsity of the first part of the statement, it is unnecessary to embark upon a detailed study of the evidence criticising the studies which form the basis of the primary articles. I am, for the purposes of this part of the case, prepared to accept that many of the underlying studies suffer from defects, produce results which are not statistically significant and would not be accepted by all, or perhaps by even a majority of scientists, as rigorous proof in accordance with scientific method. But that does not mean that, looked at as a body of "evidence", there is such a paucity that it could be dismissed as insignificant. A number of the studies show trends which, even if not statistically significant, point to an association and thus the possibility of a causal relationship between exposure to environmental tobacco smoke and cancer. A number of the Reviews accept these conclusions. That such an apparently authoritative body as the Surgeon General should, in its 1986 report, (albeit published after the date of the advertisement but based on studies available at that time) conclude the existence of causality is, even on its own, evidence of causality which is more than insignificant. Its existence, as even the existence of flawed (although not discredited in the major reviews) studies, makes the statement that there is little evidence that passive smoking causes disease in non-smokers misleading, or renders it likely to mislead.

Evidence of cause - Respiratory Disease in young children 92. The primary articles referred to by his Honour in the judgment below were as follows:

1. Harlap and Davies: "Infant admissions to hospital and maternal smoking", The Lancet 1974. 2. Colley et al: "Influence of passive smoking and parental phlegm on pneumonia and bronchitis in early childhood", The Lancet 1974. 3. Leeder et al: "Influence of family factors on the incidence of lower respiratory illness during the first year of life", British Journal of Preventive and Social Medicine 1976. 4. Sims et al: "Study of 8-year-old children with a history of respiratory syncytial virus bronchiolitis in infancy", British Medical

Journal 1978. 5. Rantakallio: "Relationship of maternal smoking to morbidity and mortality of the child up to the age of five", Acta Paediatrics Scandinavia 1978. 6. Fergusson et al: "Parental smoking and respiratory illness in infancy", Archives of Disease in Childhood 1980. 7. Fergusson et al: "Parental smoking and lower respiratory illness in the first three years of life", Journal of Epidemiology and Community Health 1981. 8. Ekwo et al: "Relationship of parental smoking and gas cooking to respiratory disease in children" Chest 1983. 9. Schenker et al: "Risk factors for childhood respiratory disease. The effect of host factors and home environmental exposures." American Review of Respiratory Disease 1983. 10. Ware et al: "Passive smoking, gas cooking, and respiratory health of children living in six cities." American Review of Respiratory Disease 1984. 11. Pedreira et al: "Involuntary smoking and incidence of respiratory illness during the first year of life", Pediatrics 1985 12. Chen et al: "Influence of passive smoking on admissions for respiratory illness in early childhood", British Medical Journal 1986 (accepted for publication April 1986). 93. There are other studies referred to in the judgment but these were published after the date of the advertisement.

94. The effect of passive smoking on respiratory illnesses of young children is considered in the major reviews. Those referred to by his Honour are:

1. The Surgeon General's 1986 Report. 2. The National Research Council Report. 3. The National Health and Medical Research Council report, "Effects of Passive Smoking on Health" 1986. 95. By way of example, as the judgment notes, the Surgeon General's 1986 Report states in part: "In summary, the results of these studies show excess acute respiratory illness in the children of parents who smoke, particularly in children under 2 years of age." 96. The primary studies were the subject of criticism and the appellants submissions sought to cast doubt upon the conclusions to which they came. For the reasons already given, those matters are relevant to the question of the causal relationship, but do not affect the conclusion to which his Honour came, in my opinion correctly, viz, that there was evidence, in the sense in which that word as used in the advertisement may be understood, that environmental tobacco smoke causes respiratory disease in young children.

Evidence of cause - Asthma 97. There was little dispute that environmental tobacco smoke may bring on attacks of asthma and the literature extant at the time of the advertisement clearly amounted to "evidence" of that association. His

Honour concluded from this that in the result there was more than a little evidence that environmental tobacco smoke caused asthma.

98. The appellant sought to attack his Honour's conclusion on the basis that his Honour had erroneously equated the underlying condition of "asthma" with the symptoms of that condition which manifest themselves in what is known as an "asthma attack". The evidence clearly enough indicated an association between environmental tobacco smoke and an asthma attack; just as one would expect that smog or cold weather would trigger an asthma attack. But, it was submitted, it was incorrect to say that environmental tobacco smoke caused the underlying condition of asthma, that being the disease, just as it would be incorrect to say that smog or cold weather were causes of asthma. All that could be said is that smog or cold weather would bring on an asthma attack.

99. His Honour referred to dictionary definitions in the course of his reasons. It suffices to refer to that given by The Macquarie Dictionary as the primary meaning of "disease", viz:

"A morbid condition of the body, or of some organ or part; illness; sickness; ailment." 100. For the appellant it was submitted that of the various medical experts who ventured an opinion on the matter only one, Dr Breslin, equated asthma attacks with the disease of asthma. Other medical evidence was to the contrary. To confuse the risk of triggering an attack of asthma in asthma sufferers with the cause of the disease of asthma would, it was submitted, involve a misconception, to be ignored in construing the advertisement.

101. The evidence demonstrates that asthma is an inherited predisposition in the airways. Various trigger factors can lead to a narrowing in the airways that results in the symptoms of asthma. As Professor Phelan, a witness called by the appellants, observed, one trigger factor giving rise to the development of airways obstruction and sometimes an asthma attack was the inhalation of cold air. Professor Landau said that in papers he had written he distinguished between the disease "asthma" and an "asthma attack". Professor Witorsch was firm that environmental tobacco smoke did not cause the disease of asthma. Rather, it produced or exacerbated symptoms in some asthmatics. Professor Huber likewise agreed that environmental tobacco smoke could exacerbate asthma, but denied that it could cause asthma.

102. Even Dr Breslin in his written work appears to have distinguished between asthma on the one hand and asthma attacks on the other. In an article which he co-authored (Knight A, Breslin ABX "Passive cigarette smoking and patients with asthma" Medical Journal of Australia 142: 194-5 (1985)) he wrote:

"Thus our findings suggest that passive smoke inhalation may produce asthma attacks in subjects who suffer from asthma...". 103. If the words are to be understood in a medical context, it would seem that the weight of medical opinion was in favour of the view that there is a difference between an asthma attack and the underlying condition of asthma, and that the reference to "disease" in the advertisement was a reference to the underlying condition. It is difficult on the facts to say, as the learned judge did, that Dr Breslin had a great deal more experience than the other witnesses, or to accept that his Honour was entitled to say as he did that where there were differences in the opinions of the experts in the field, the opinions of the applicant's experts were to be preferred. No question of credit of any of the expert witnesses was raised. Demeanour appears not to have played a part in the assessment.

104. However, the real explanation of his Honour's judgment appears to lie in the following passage:

"I would think many lay persons would not distinguish between asthma and an attack of asthma. Those who did would, I think, regard the underlying condition of asthma referred to in some of the evidence as a latent disease

and an attack of asthma as an acute manifestation of the disease." 105. It is difficult to determine whether members of the public to whom the advertisement was addressed, would fail to distinguish between the two concepts. There was no evidence of usage before his Honour to assist in the conclusion. However, with respect to his Honour I find it difficult to fit the idea of an attack of asthma into the dictionary definition. The morbid condition of the body of which the dictionary speaks is, in my opinion, properly to be understood as the underlying illness, not the symptoms which manifest themselves. A person who suffers from asthma, but is between asthma attacks, would not properly say that he was not suffering from asthma. That person might say that presently he or she was not suffering from an asthma attack.

106. Accordingly, I am of the view that his Honour erred in equating an attack of asthma with the disease and that, in this respect, the advertisement was neither misleading nor deceptive nor was it likely to mislead or deceive.

Evidence of cause - Otitis Media 107. Otitis Media is a disease commonly known as middle ear effusion or "glue ear". I adopt his Honour's description of the disease, which was not in dispute:

"It occurs when cells in the middle ear secrete abnormal amounts of a gluey substance which is then trapped in the middle ear. The resulting blockage can cause temporary deafness in children, and may require surgery to ventilate and drain the middle ear. According to Dr Nolan the result of the disease process is deafness in children which in turn has been shown to interfere with child development and learning. He said it is quite a significant disability for a child to have. It may be prolonged but it is not a permanent effect on the nerve cells of the auditory nerve. The effect of the disease is to impede transmission of sound waves into the middle ear and then to the auditory nerve." 108. His Honour's judgment discusses the conclusions of two major reviews, being the National Research Council Report and the 1986 Surgeon General's Report. The former reports a link between environmental tobacco smoke and increased rates of chronic ear infections and middle ear effusions in young children. The latter reports that the studies reviewed were "consistent" in demonstrating a greater incidence of chronic ear disease in children exposed to parental cigarette smoke, but cautioned the need for further study.

109. His Honour's conclusion that there was more than a little evidence that environmental tobacco smoke caused otitis media was based upon the results of two primary studies:

1. Kraemer et al - Risk Factors for Persistent Middle-Ear effusions. Otitis Media, Catarrh, Cigarette Smoke Exposure and Atopy, Journal of the American Medical Association, 1983. 2. Black - The Aetiology of Glue Ear - A Case-Control Study, International Journal of Paediatric Otorhinolaryngology, 1985. 110. The latter study found a significant association between glue ear and the smoking habits of all household members. The former showed that: "(N)asal congestion alone elevated the risk nearly fourfold. When cigarette smoke exposure or atopy was added to nasal congestion, the risk increased. Children

with all three factors were more than six times as likely to manifest PMEE (persistent middle-ear effusion)." 111. This evidence justified the conclusion that, in the sense in which "evidence" may be understood in the advertisement, there was here more than a little evidence that environmental tobacco smoke causes otitis media.

Scientific Proof and Cause 112. It is, for reasons which will become apparent shortly, unnecessary to consider whether paragraph 3 of the advertisement is not only misleading and deceptive because of its reference to little evidence of cause but also in its reference to scientific proof of cause.

113. At the heart of the difficulties which beset a court attempting to deal with the matter is the fact that the scientific community comprises experts from different disciplines, each of which has its own methodology. The relevant disciplines, for example, in the field of carcinogenesis are epidemiology and toxicology. The former is concerned with the study of the incidence of disease in human populations. Its approach is observational in character. The latter is an experimental discipline concerned with investigating in what form, by what mode of exposure and at what level of dose a substance may induce tumours in animals. Each discipline approaches the investigation of causes of disease from a different perspective. It is not possible to accept one approach as in some way preferable to the other.

114. Epidemiological studies by their nature demonstrate associations between a particular substance (in the present case environmental tobacco smoke) and a particular disease. Proof of association does not of itself prove cause to an epidemiologist, even in a case where the association between the substance and the disease is strong. There is a need for the formation of a judgment based upon a number of matters, including an assessment of the rigour with which the experiment has been constructed and an evaluation of the hypothesis that the result arrived at might have been arrived at by chance or the result confounded by error. Thus at the heart of epidemiological studies lies the use of statistics.

115. Statistics can determine the probability of an observed outcome being due to chance, rather than to a real association. While chance can theoretically never be eliminated as a possibility, science conventionally accepts certain limits of statistical significance. There is first constructed what is referred to as a null hypothesis, that is to say, a hypothesis that there is no relationship between, for example, environmental tobacco smoke and a particular disease. The results of the study are then subjected to statistical treatment to arrive at the probability of the outcome occurring by chance. The conventional limit of statistical significance is p = 0.05, meaning that the result obtained can be expected to arise by chance no more than five times in a hundred. Provided that p is equal to or less than 0.05, the results are spoken of as being statistically significant.

116. This is not to say that a result where the probability was slightly higher than p = 0.05 would be necessarily discarded. It means only that the result might be expected to happen more often than once in twenty times by chance. Where an epidemiologist had a prior hypothesis and was looking for a result in a particular direction, there was evidence that it could sometimes be appropriate to use a 90 per cent confidence level, ie p = 0.10. Generally, the evidence adduced favoured the necessity of statistical significance before cause could be inferred.

117. Sir Richard Doll, described by his Honour as an "icon" in the field of epidemiology, gave evidence below. He said that where associations similar to those observed in studies on humans could be produced experimentally in animals in the laboratory, it was easy to conclude that they imply causation in humans. However, it was possible to draw a conclusion about causation in the absence of laboratory support but there were difficulties involved. Consideration had to be given to the possibility that an observed association between a factor (A) and a disease (B) arose as a result of chance, as a result of bias or confounding, or that A may have caused B, or B may have caused A. Chance could only be eliminated by repetition and the use of standard tests of significance. Furthermore, extreme significance levels would be required.

118. Guidelines had been developed (they are known as "the Bradford Hill criteria") which, Sir Richard said, enabled a conclusion about causation to be drawn with confidence. These guidelines he described as follows:

"First, consideration has to be given to the possibility that the observed association is due to chance, bias or confounding ... Secondly, the nature of the association has to be examined to see if a causal relationship makes biological sense. We have to examine the strength of the association (the extent to which the risk of the disease is increased in the presence of the factor), the quantitative variation in risk with variation in exposure (whether the risk increases proportionally with increase in exposure) and the quantitative variation in risk with duration of exposure, time since exposure began, and time since exposure ceased. Thirdly, consideration has to be given to all other available epidemiological evidence, to see whether it fits with the concept of a causal relationship: whether, for example, any differences in risk between men and women and in people of different ages, in different social communities and different countries, and at different times accord with differences in the prevalence of the factor to which people in these various groups have been exposed. Only when this has been done and the weight of the evidence has been found to be consistent with a causal relationship, can the conclusion be reached that the observed association implies that the factor causes the disease." 119. In the view of Sir Richard, in the scientific sense of the word, "proof" meant proof beyond reasonable doubt.

120. The judge below expressed the view that more reliance could be placed upon non-statistically significant results than the witnesses for the appellant conceded. However, he said he accepted the evidence of Sir Richard Doll, quoting Sir Richard as suggesting that statistical significance is "a guide to thought" rather than an absolute standard. In my view, his Honour was in error in so dismissing the consequence of statistical significance. First, a perusal of the evidence discloses that not only did the statisticians called by the appellant rely upon statistical significance as a prerequisite, but so too did a number of the witnesses called by the respondent. Further, the reference to statistical significance being "a guide to thought" was taken out of context. I do not read Sir Richard's evidence as a whole as saying that for the purpose of determining questions of causation statistical significance was relatively unimportant. The whole of his evidence was to the contrary.

121. When one comes to examine the epidemiological studies relating to lung cancer, of the twelve studies published at the time of the advertisement, three showed negative results, two showed no increased risk and only two studies showed results which, as the appellant's submissions put it, were "statistically significant overall". The various studies were submitted by Professor Wald and by the National Research Council to a statistical procedure referred to as meta-analysis, the results of which were regarded as significant in the reasons below. Meta-analysis is a mathematical process whereby data from different studies is combined with a view to ascertaining whether or not in combination the data reveals results which are of greater significance than the results of individual studies. Although the meta-analysis was carried out after the date of the advertisement, the data analysed came from studies carried out prior to that date and it is not for that reason to be ruled out of consideration in considering the issue of scientific proof.

122. Statisticians called by the appellant were critical of combining for this purpose data from cohort studies and case controlled studies. Criticism was levied at the inclusion of two studies in the meta-analysis

on the basis that they had not been published at the time of the advertisement, albeit carried out. Criticism was also directed at the use of a figure of seven per cent to allow for the misclassification of persons who reported themselves as "never-smokers", when in fact they had smoked. It was not that the figure of seven per cent was not open to Professor Wald, but rather that other figures were open ranging from twenty-four percent to thirty-seven per cent in the literature. The percentage used affected the outcome of the meta-analysis. The outcome was affected by other matters of judgment as well.

123. However, the most trenchant criticism by the appellant was that the results of the meta-analysis depended upon the legitimacy of the initial studies carried out and which were included in the meta-analysis. A number of these were subjected to criticism by statisticians called by the appellant. The detail of these criticisms is not of significance. Some idea, both of the substance and of the extent of the criticisms advanced, can be found in the judgment below. His Honour expressed the view that Professor Tweedie, one of the witnesses called for the appellant, was:

"... over-critical of the methodology in most of the studies and gave more weight to potential flaws in them than was warranted." 124. This criticism of Professor Tweedie, whose evidence was opposed to that of Professor Wald, is echoed in the criticism by his Honour of a number of the witnesses called by the appellant. For example, Dr Layard, another statistician, was said by his Honour to be "hypercritical". His evidence was perhaps discounted by his Honour as a result of Dr Layard having, so it was said, an association with the tobacco industry. That association consisted of the fact that Dr Layard, who was a consultant, had been instructed by counsel in law firms to prepare papers and the like, in circumstances where the client was a tobacco company. At the time of the hearing such assignments represented a substantial part of his work. He had also written a paper together with an employee of a tobacco company criticising the validity of the Hirayama study dealing with the association between environmental tobacco smoke and cancer.

125. There was no attack made on Dr Layard's credit, or indeed the credit of any of the witnesses whose evidence was ultimately not accepted by his Honour. No suggestion was made that their evidence was given other than in good faith, or that they lacked competence in their particular field of expertise. Nothing seems to have turned upon the demeanour of these witnesses.

126. With great respect to his Honour, it seems to me that he embarked upon the wrong inquiry. The question before his Honour was not, as the judgment rather suggested, whether on the balance of probabilities environmental tobacco smoke did cause a particular disease, a question that might require his Honour to chose between one witness's evidence and another, but rather whether there was a generally accepted view in the scientific world as to whether there was proof that environmental tobacco smoke caused disease. In answering this question, a decision might no doubt need to be made as to whether a particular scientific discipline was relevant or irrelevant to the enquiry, but, given that a discipline had relevance to the enquiry (and no doubt statistics had such relevance) the issue did not require his Honour to chose between the views expressed by one discipline, as against the views expressed by another, or between the views expressed by one witness against the views expressed by another witness in the same field. All his Honour was required to do was to ascertain whether there was a generally held view or whether there was not. The fact that a particular witness was, in his Honour's opinion, "overcritical" was not to the point, particularly when criticism was an essential tool of the very discipline from which the witness came.

127. What the divergent views showed was that there were different views in the scientific community on the question whether environmental tobacco smoke causes cancer. One reason for the divergent views was the divergent disciplines from which the witnesses came. The toxicologists, for example, took a different view to the epidemiologists. No-one suggested below that the opinion of toxicologists was irrelevant. Likewise, the statisticians sometimes took a different view from epidemiologists in the interpretation of results. The significance of the opinion of statisticians could not be denied, and there was indeed a body of

evidence to the effect that the interpretation of results of epidemiological studies was a group effort in which statisticians, inter alia, co-operated.

128. Another example of the problem of the interpretation of results of epidemiological studies can be given. It will be recalled that his Honour's ultimate conclusion that there was compelling scientific evidence that environmental tobacco smoke caused lung cancer in non-smokers depended upon it being accepted, inter alia:

"(a) that passive smoking involves inhalation of environmental tobacco smoke which contains carcinogens; (b) that there is no safe threshold level of exposure to carcinogens...". 129. These two factors were the subject of challenge in the evidence to which we were taken. It was submitted that the finding that there was no safe threshold dose for a carcinogen was not supported by the evidence. The evidence, not all of which is referred to in the judgment below, suggests that there is scientific debate whether or not, in the case of carcinogens, toxicity depends upon the amount or concentration of the relevant substance delivered to the relevant site in the organism. One theory, not so far as the evidence suggests yet the subject of "proof", was that in the case of carcinogens any amount, even one molecule, could be sufficient to cause cancer. However, it was only a theory and conceded to be such by witnesses. The evidence, however, certainly suggested that it was a theory in which a majority of the witnesses agreed but that, it was submitted, did not operate to convert the theory into fact.

130. Submissions were directed also to the question whether it was possible to extrapolate from the findings that active smoking caused lung cancer to a conclusion about environmental tobacco smoke. This was also a question upon which opinions were divided, although the difference of view may reflect again the discipline from which the witnesses came. The respondent called no toxicologists. However, the evidence of the appellant's toxicologists was that there were both quantitative and qualitative differences between environmental tobacco smoke and mainstream smoke as it is called, which made extrapolation of dubious reliability. This is not to say that environmental tobacco smoke does not contain carcinogens. The point of the submission was that the Bradford Hill criteria require the conclusion as to cause to be biologically plausible. Clearly that plausibility exists if environmental tobacco smoke contains the same carcinogens as mainstream smoke, because the causal relationship between cancer and mainstream smoke has been already established. However, once the differences between environmental tobacco smoke and mainstream smoke are noted, it may not so readily be concluded that biological plausibility exists. A fortiori, it was submitted, it was erroneous to conclude here that there was scientific proof of the causal relationship.

131. It is, in my view, unnecessary to determine these questions. There was evidence, which it was open to his Honour to accept on the matter. However, that is not to the point. The evidence adduced on both sides made it clear that, depending largely upon the scientific orientation, the body of scientists was divided on the question whether the evidence that existed at the time of the advertisement showed a causal relationship in accordance with the dictates of scientific proof.

132. Similar problems arose with his Honour's finding that environmental tobacco smoke caused respiratory disease in young children.

133. By way of example, it might be mentioned that in the Harlap and Davies study which analysed admissions to hospital of infants in their first year of life, membership of the group of children said to have been exposed to environmental tobacco smoke depended solely upon the result of an ante-natal interview of the mother. No attempt was made to determine whether the mother in fact continued to smoke during the rest of the pregnancy, nor whether she or others smoked in the presence of the baby, nor to what extent. In other words, it just was not known whether the babies inhaled environmental tobacco smoke during their

lifetimes. That was an aspect of the study criticised by a statistician. From the point of view of logic, the criticism had considerable substance.

134. Another example of the difficulties is to be found in the testimony of Professor Wittorsch, a witness called for the appellant. He believed that socio-economic factors might well account for some part at least of the increased frequency of respiratory symptoms and illness in young children who had been exposed to environmental tobacco smoke. Put simply, it may be that residents of disadvantaged and perhaps more polluted areas, lower on the socio-economic scale, generally have both an inadequate dietary intake and a greater tendency to smoke than people who are better off. Thus, there may well be confounding factors which affect the conclusion that the association observed between parental smoking and respiratory disease in children involved a cause and effect association. This evidence was dismissed by his Honour somewhat curtly. His Honour said:

"I do not think the socio-economic factors to which the professor referred would have been likely to have so substantially affected the results of the study (sic) showing the effect of passive smoking on very young infants as to render those results unreliable." 135. There is no explanation why his Honour did not accept Dr Wittorsch's evidence. No question of credit seems to have been involved. It was not suggested to him that his views were not honestly held, or were irrational. Yet, on a matter involving expert evidence, his Honour reached a contrary view.

136. I note these examples merely to give the flavour of some of the criticisms advanced. The discussion here clearly can not even attempt to do justice to the detailed submissions from both sides in an argument which ranged over twenty-eight volumes of appeal books and continued over three weeks.

137. Having regard to the views expressed earlier on the question whether asthma is a disease, it is clear that I would not, with respect, agree that there was scientific proof that environmental tobacco smoke caused asthma. Since his Honour had not been satisfied that there was scientific proof of a causal association between passive smoking and otitis media, the appeal did not concern that issue. The relief given

138. The major reason why I have not considered in greater detail the arguments made by both sides on the "scientific proof" limb of the case is that I am of the view that the appellant should succeed in the appeal for a quite different reason.

139. From the outset of the case the appellant had indicated to the respondent that it would not publish the advertisement again. No injunction was necessary to restrain the publication of the advertisement; there was no suggestion that the appellant would breach its undertaking. What the respondent, the applicant in the proceedings below, sought was something else. It sought an injunction restraining the appellant from publishing in the future a particular collocation of words in the advertisement (paragraph 3) divorced from the context of the advertisement itself.

140. The words complained of, which are the subject of the present proceedings, must, as the respondent's submissions rather conceded, be understood in their context within the advertisement. The context in which the same words might appear in some other article or advertisement may well give a different gloss to them, a gloss which could make them not misleading or deceptive. For example, in the context of the present advertisement, "evidence" had, on the view I take, a meaning which extended beyond the primary studies and included the reviews. The reviews helped bolster the primary studies in reaching the conclusion that there was more than a little evidence that environmental tobacco smoke caused a particular disease. "Cause", at least in association with evidence in the context, did not have its accepted scientific meaning, but went beyond that meaning to encompass evidence of association. In a different context each of these words might well take on another meaning. It is only in the context of the particular advertisement that the

words have been held to be false or misleading. This case does not decide whether in some other context the words must be false or misleading and the use of them necessarily a breach of s.52 of the Act.

141. Equally importantly, the present case, of necessity, can only decide in respect of a particular point of time that the words used by the appellant are false and misleading. The only relevant time that issue should have been resolved was the date of the advertisement itself. There was no suggestion after the litigation began that the advertisement would ever appear again. There was no other conduct of the appellant that could be pointed to as being false or misleading. As I read the judgment appealed against, evidence of studies and reviews after the date of the advertisement was adduced in aid of the injunction restraining the repeated use of the words complained of in the future, that raising, so his Honour believed, the issue whether the words in question were true as at the date of hearing. But, even if this question be resolved in favour of the respondent to the appeal, it does not follow that the issue in the future would necessarily require the same answer.

142. In a case such as the present, the state of future scientific knowledge is but a matter of speculation. The world of science and particularly scientific proof advances in great leaps. What may be thought to be cast in stone today, may be outmoded and discredited tomorrow. Not only was the applicant below seeking an injunction restraining the use of words unlimited by context, but also the use of the words unlimited by time. That is to say, the injunction was to continue to run even if subsequent scientific advances made it clear that there was no connection at all between environmental tobacco smoke and disease.

143. Thus to restrain the use of the words impugned, unlimited either as to context or time, could bring about the situation where the court would be restraining the appellant from conduct which was not in breach of s.52 of the Act at all: cf Trade Practices Commission v Walplan Pty Ltd [1985] FCA 389; (1985) 7 FCR 495 at 496-7 per Pincus J; Thompson Australia Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150.

144. It would not be possible to frame an injunction which ensured that only if the appellant used the impugned words in circumstances which constituted a breach of s.52, it was restrained from so doing. Such an injunction would lack certainty and the appellant would be placed in a position that it would not know exactly what was expected of it: cf Redland Bricks Ltd v Morris (1970) AC 652 at 666; Trade Practices Commission v GLO Juice (1987) 73 ALR 407 at 414-6; Nettcom (Aust) Pty Ltd v Dataplex Pty Ltd (1988) ATPR 40-883 at 49,570 and Walplan (supra) at 496. Proceedings for contempt would require the holding of a factual inquiry to determine the meaning of the words in the context in which they were used and the state of scientific knowledge and evidence at the relevant time: cf Commodore Business Machines Pty Ltd v Trade Practices Commission (1990) ATPR 41-019 at 51,351. Further, to require the matter to be litigated in the context of contempt proceedings would be to impose upon the appellant the onus of proof to show that the state of scientific knowledge had changed in order to obtain a discharge of the injunction and to substitute the sanction of contempt for the civil sanctions imposed for breach of s.52: cf World Series Cricket v Parish (1977) 16 ALR 181 at 191-2 per Bowen C.J.

145. The grant of injunctive relief under s.80 of the Act is discretionary. The nature of that discretion has recently been explored by the Full Court of this Court in ICI Australia Operations Pty Ltd v Trade Practices Commission [1992] FCA 474; (1992) ATPR 41-185. In that case further, the Court again emphasised the need for the injunction to be so framed that there be no scope to wonder whether future conduct fell within the order (see at 40,527 per Lockhart J. and 40,533 per Gummow J.).

146. In my view, the exercise of the power in the present case was wrong in law and the discretion so to do has miscarried.

Conclusion 147. The respondent has not sought a declaration that the advertisement constitutes a breach of s.52 of the Act. In the circumstances, it is perhaps appropriate that the respondent be given the opportunity of seeking an amendment to its application so to do, and the appellant the opportunity of putting any submission that

such amendment should not now be allowed. The parties having agreed that the question of costs should be debated after judgment has been given in the event that the appellant was wholly or partly successful, I would propose that the matter be listed at some date suitable to counsel for argument on these two matters, following which appropriate orders can then be made.

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