Kimberley Clark Australia v Carter Holt Harvey Tissue Australia

[1997] FCA 334

IN THE FEDERAL COURT OF AUSTRALIA  )
NEW SOUTH WALES DISTRICT REGISTRY  )
GENERAL DIVISION  )             No. NG 95 of 1997

BETWEEN:KIMBERLEY CLARK AUSTRALIA

Applicant

AND:CARTER HOLT HARVEY TISSUE AUSTRALIA

Respondent

CORAM:Lehane J

PLACE:Sydney

DATE:4 March 1997

EXTEMPORE REASONS FOR JUDGMENT

LEHANE J:  Among a number of orders sought by the respondent is one which would direct the applicant to request and take all reasonable steps to obtain certain documents from Kimberley Clark Corporation, which I understand is the parent company of the applicant incorporated in the United States of America.  The documents were, in the original formulation of the order, very widely described.  The description has now been substantially confined, but as the applicant's counsel has demonstrated in the course of argument, was still, though confined, very wide: in my view unacceptably so.

What is now sought, following argument, is that the applicant be directed to request from Kimberley Clark Corporation a narrower class of documents: those created or received by it from January 1990 to the present date, recording research data, including scientific or medical opinion, test results, conclusions, recommendations, and requests or instructions for them, on the basis of which the statement "hypo-allergenic non-irritating white
bathroom tissue free of inks, dyes and perfumes, it is the natural choice for softness" first appeared on the packaging of bathroom tissues described as Kleenex Cottonelle Hypo‑allergenic tissues.

The context in which that order is sought is this.  The applicant seeks in these proceedings relief by way of injunction restraining the respondent (a competing manufacturer of toilet tissue) from advertising what is described as the respondent's hypo-allergenic toilet tissue in terms which suggest that it is the first and only product shown to be non-irritating to the skin or, in more general terms, that it causes fewer allergic reactions than other toilet tissues or is, in still more general terms, less likely than other tissues to result in the irritation of the part to which it is applied or that it may relieve such irritation.  The respondent has tendered, and I have received over objections by the applicant, evidence to the effect that Kimberley Clark Corporation has distributed in the United States a product described as Kleenex Cottonelle Hypo-allergenic tissues which its packaging describes as "hypo-allergenic non-irritating white bathroom tissue free of inks, dyes and perfumes" and the "natural choice for softness".  The particular statements thus are three: first, that the tissue is hypo‑allergenic, secondly, that it is non-irritating and, thirdly, that it is free of inks, dyes and perfumes.  Those are three elements emphasised in the advertisements by the respondents of their Sorbent hypo‑allergenic tissue.

Kimberley Clark Corporation is not of course a party to these proceedings.  There is no suggestion that it would be appropriate to seek to issue a subpoena to it.  It owns 50 per cent of the shares in the applicant.  I think I may infer from the material before
me that there is a reasonably close commercial relationship between the applicant and Kimberley Clark Corporation.  It also appears, at least in the current state of the proceedings, a fair inference that documents of the kind sought to be requested from Kimberley Clark Corporation might contain material relevant to matters in issue here.  Those are principally the circumstances on which the respondent relies in seeking an order that the production of the documents be requested.

The applicant makes two principal submissions.  The first may be described as a formal submission, but it should be recorded.  It is to the effect that the decision of Lockhart J in Sabre Corporation Pty Limited v Russ Calvins Hair Co (1993) 124 ALR 400 was wrongly decided and that, contrary to that decision, the court does not have power to make an order of the kind sought. In my view it is clearly appropriate that I follow the decision of Lockhart J and hold that the court does have power to make an order of the kind which his Honour made in that case.

The question then is whether this is an appropriate case for making such an order, and that was the question to which the applicant's second submission was directed.  The applicant founded itself principally upon the decision of Giles J in the Commercial Division of the Supreme Court of New South Wales in Aetna Pacific Securities Limited v Hong Kong Bank of Australia Limited on 29 April 1993 unreported.  That case had to do with an application for an order of the same general character as that which the respondent seeks here.  His Honour concluded that the Supreme Court had power to make such an order; however, the particular order sought was refused.  The broad basis of the
refusal of the order was the extreme and apparently oppressive width of the description of the documents sought by contrast with any benefit likely to result from production of the documents.  Having referred to the breadth of the description of the documents sought to be requested and the numerous pages occupied by that description, his Honour proceeded as follows:

Nor is it a case in which readily identifiable documents, of demonstrated importance in the proceedings and not otherwise available, can be provided without undue difficulty and can be expected to be provided at the request of Aetna.

It is put to me here that, even if it be accepted that the class of documents sought is now substantially confined this is not a case in which it has been demonstrated that the documents sought to be produced are of importance in the proceedings and not otherwise available.

In one significant respect this may be distinguished from the circumstances with which Giles J was concerned: here the request would be directed to a US corporation with which the applicant evidently has a close connection.  That corporation appears, on the material at present before me, to have marketed tissue in relation to which claims are made which bear a considerable similarity to those made by the respondent and of which the applicant complains in these proceedings.

It was put to me yesterday by Mr Bannon SC for the respondent, that it was unlikely that marketing of that kind would have taken place in the United States without the benefit of substantial scientific or medical opinion going to the truth or otherwise of the particular claims.  Thus it could readily be inferred that there would be, in the hands of Kimberley Clark Corporation, scientific or medical opinions, bearing on the precise questions in issue in these proceedings.  It was submitted that on that footing, applying the principles laid down by Lockhart J in Sabre Corporation, I should regard the commercial connection between the applicant and Kimberley Clark Corporation, taken together with the likely relevance of the material, as justifying an order requiring the request to be made.

The fact that a request is ordered to be made, and is made, does not necessarily result in compliances with the request; nor, as Giles J suggested in Aetna, would it be appropriate for me at this stage to form any view as to what is likely to occur if a request is ordered and the request is not complied with.  It is also clear that if documents are requested, if they are produced, and even if they are relevant, there may not be a basis for their admission in evidence in these proceedings.  Nevertheless I am persuaded by the evidence as to the relationship between the applicant and Kimberley Clark Corporation, coupled with the evidence as to the claims made about the tissues marketed by Kimberley Clark Corporation, that this is a case where an order, in suitably limited terms, can and should be made.

The conclusion is in my view that order 8, as sought in the short minutes of order handed up by the respondent, should be made but on the footing that schedule A, to which the order refers, is amended as follows: first; by omitting entirely the definition of "document"; secondly, by omitting from the second line of the description of documents commencing "All documents created or received" the words "or relating to";  thirdly, by adding the word "first" before the word "appeared" in the third line at paragraph A of that description; and finally by omitting paragraph B of the description.

I certify that this and the preceding 5 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane.

Associate:

Dated:  4 March 1997

Heard:  4 March 1997

Place:  Sydney

Decision:  4 March 1997

Appearances:  Mr S J Archer of counsel instructed by Deacon Graham & James appeared for the applicant.

Mr T D Castle of counsel instructed by Middletons Moore & Bevins appeared for the respondent.