Proctor & Gamble Australia Pty Ltd v Medical Research Pty Ltd

[2001] NSWSC 183

CITATION:	Proctor & Gamble v Medical Research [2001] NSWSC 183
CURRENT JURISDICTION:	Equity Division Commercial List
FILE NUMBER(S):	SC 50021/00
HEARING DATE(S):	7.2.01, 13.2.01
JUDGMENT DATE:	21 March 2001
PARTIES :	Proctor & Gamble Australia Pty Limited -v- Medical Research Pty Ltd
JUDGMENT OF:	Hunter J

COUNSEL :	Applicant/Defendant: A J Sullivan QC Respondent/Plaintiff: T J Hancock & C Champion
SOLICITORS:	Applicant/Defendant : Blake Dawson Waldron Respondent/Plaintiff: Colin Biggers & Paisley
CATCHWORDS:	Practice & procedure - sufficiency of discovery - conclusiveness of affidavit verifying discovery.
LEGISLATION CITED:	Evidence Act 1995
CASES CITED:	Geoffrey Hill & Associates -v- King (1992) 27 NSWLR 228 Mulley -v- Manifold (1959) 103 CLR 341 Falk -v- Finlay (1999) NSWSC 1284 (unreported) Lyell v Kennedy [No. 3] (1884) 27 Ch D 1 Fruehauf Finance -v- Zurich Australian Insurance (1990) 20 NSWLR 359 Lonrho Ltd v Shell Petroluem Company (No 2) [1980] 1 WLR 627 Linfa Pty Ltd -v- Citibank Ltd [1995] 1 VR 643 Taylor -v- Santos Ltd (1998) 71 SASR 434
DECISION:	Application dismissed. Respondent to pay applicant's costs of application other than costs of 13 February 2001 as to which no order for costs is made.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

HUNTER J

WEDNESDAY 21 MARCH 2001

50021/00 PROCTOR & GAMBLE AUSTRALIA PTY LTD -v- MEDICAL RESEARCH PTY LTD

REASONS FOR JUDGMENT

1    This application is one by the defendant for better discovery in terms of its notice of motion dated 15 December 2000 seeking the following orders

“1. The Plaintiff file and serve a Further Verified Supplementary List of Documents on or before 16 February 2001 which, without otherwise limiting the obligations upon the plaintiff to give full and proper discovery, shall:

(a) respond to all outstanding queries made in relation to the Plaintiff’s discovery contained in the letters from Blake Dawson Waldron to Colin Biggers & Paisley dated 10 October, 6 November and 14 November 2000 which are summarised in the schedule attached to this Notice of Motion;

(b) distinguish the documents which are in the possession, custody or power of the Plaintiff from those that once were but are no longer in its possession custody or power;

(c) explain when the Plaintiff parted with the documents which are no longer in its possession, custody or power and the current whereabouts of those documents;

(d) distinguish between original and copy documents.

2. The Plaintiff serve an affidavit explaining what tasks the Plaintiff and its solicitors have completed in relation to discovery including all efforts to discover relevant documents held by its overseas parent company and subsidiaries and any responses received from its overseas parent company and subsidiaries.

2    The schedule there referred to comprised some forty seven categories. Of those categories, the parties have reduced those remaining the subject of dispute, to categories 1, 9, 24, 25, 30, 31 and 33.

3    As there is a substantial outstanding question as to costs it has been necessary to examine, in more detail than I would have preferred, the history of discovery in this matter.

4    The proceedings arise out of a pharmaceutical products supply and manufacturing agreement which the plaintiff alleges was breached by the defendant in several respects and, further, that it negligently performed its tasks under the agreement resulting, it is said, in the supply and manufacture of “unsafe products”, requiring their recall.

5    Amongst its defences and cross claims the defendant asserts that the subject products were manufactured in a manner approved by the plaintiff and that, the recall was due to defects in the product for which the defendant was not responsible. Those matters are in dispute.

6    By consent on 2 June 2000 I gave directions which included the following:

“The parties to file and serve their Lists of Documents relating to the Claim and cross claim on or before 21 July 2000.”

7    By consent order of 28 July 2000 that time was extended as follows:

“The parties are to file and serve their Lists of Documents relating to the Claim and Cross-claim on or before 4 August 2000 and inspect documents on or before 11 August 2000.”

Provision was made in those orders for the filing of statements of evidence shortly thereafter.

8    When the matter was next before the Court on 4 August 2000 the plaintiff filed in Court its verified List of Documents. The defendant filed its verified List on 7 August 2000. At the next directions hearing of 17 November 2000 the consent orders made included the following:

“The plaintiff is to provide any further discovery on or before Friday 8 December 2000”.

9    No supplementary List of documents was filed on behalf of the plaintiff until 7 February 2001 when a verified Supplementary List of documents and a verified Further Supplementary List of documents were filed in Court, in the course of hearing this application.

10    Preceding the filing of the defendant’s notice of motion there had been an exchange of correspondence between the parties on the subject of discovery as evidenced in the affidavit of Emma Jane Press, sworn 14 December 2000.

11    In respect of the plaintiff’s list of documents the defendant’s solicitors (BDW), by facsimile of 28 September 2000 to the plaintiff’s solicitors (CBP), sought better discovery, so far as is relevant, of the following:

“(a) Frank Anastasia, Doug Bierer, Doug Anderson, Jackie Williams, Pauline Bay and John Waldmann’s copies of an email from John Waldmann to Frank Anastasia dated 8 September 1999 (see document 1.1112)”
(Category 1)

12    BDW also requested discovery of all replies to the John Waldmann (Waldmann) email of 8 September 1999.

13    The point of that request may be seen from the terms of the subject email which is set out below and which, I think, demonstrates the possible importance of its contents to the issues in the proceedings:

“From: John Waldmann

To: Frank Anastasia
cc: Doug Bierer …, Doug Anderson…, Kerrie
Donoghue…, Jackie Williams…, Pauline Bay…

Frank/ Doug

I have been in cc: Mail exchages (sic) on Sinex issues for the past two weeks. Unfortunately this latest issue is complicated by the fact that we have another issue with Sinex involving product stability. Basically our product fails to meet it’s registration requirement for stability (i.e. it fails at 30 degrees C before expiry) . We have been engaged with Doug about the ICH position that we interpret as allowing us to use 25 degrees C for product stability challenge in Australia (Sinex passes at 25 degrees C the standard we use elsewhere in the world) but Doug’s most recent note indicates that Australia isn’t observing the ICH guidelines .

With these two problems I am moving toward a conclusion that we will need to retrieve Sinex from the market place . (I just learned about the ethanol issue yesterday).

I intend to direct Australia QA to place all current Sinex on HOLD unless I hear a good rationale for a different action today. I would like to make the decision about marketed product quickly since we’ve been discussing the stability issue now over the last two weeks. But, if Doug believes that Australian requirements mean we have to meet the 30 degree requirement (and we don’t) then I don’t see much room to make a decision other than to get our product back.

John W.” (Emphasis added)

14    On 10 October 2000 a facsimile was forwarded by BDW to CBP raising a further matter in the following terms:

“In addition to the matters raised in our fax of 28 September 2000, the plaintiff has failed to discover all correspondence with the TGA in relation to Sinex’s failure to meet any stability tests including the notification given to the TGA/BoH of the shelf life reduction referred to in Exhibit JEW89 to the statement of Jacqueline Williams.”
(Category 9)

15    The document referred to as “Exhibit JEW 89” was a Technical Change Readiness report which contained references to the failure of products to meet stability criteria which appear to be pertinent to the defence.

16    CBP’s response, by letter of 2 November 2000, as to category 1, was as follows:

“In respect of the items you have specified, we have discovered everything in the Plaintiff’s possession.”

17    The letter foreshadowed the filing of a supplementary list of documents and concluded with the following:

“The Plaintiff’s discovery is of all documents within its own possession, custody and power, and not within related overseas corporations. We are instructed that there would be very few documents relevant to the issues in these proceedings and in the possession of such related corporations, which have not already been discovered.”

18    I think the reference to documents in the possession of overseas related corporations of the plaintiff is not without significance. The letter makes no reference to BDW’s facsimile of 10 October 2000.

19    BDW also put CBP on notice in the facsimile of 28 September as to deficiency in discovery in the following terms:

“4.4 The plaintiff has also failed to discover:

(a) any of the email exchanges referred to in the first sentence of the email from John Waldmann to Frank Anastasia dated 8 September 1999;

(b) any correspondence with John Waldmann relating to the failure of sinex to meet the registration requirement for stability;

(c) any correspondence with Doug Bierer about the ICH position;

(d) Doug Bierer’s note referred to paragraph 1 of the email from John Waldmann to Frank Anastasia dated 8 September 1999 (see document 1.1112)”

20    CBP’s response to those matters in its letter of 2 November was in the following terms:

“4.4a The plaintiff is not in possession of such documents.
4.4b We attach a sequence of correspondence with John Waldman (sic) about these issues.
4.4c The Plaintiff is not in possession of such documents. In any event the “ICH” is an international Code
regarded as authoritative but which does not apply in Australia. In Australia, the TGA is the corresponding
authority.
4.4d The Plaintiff does not possess such a document.”

21    The attached “sequence of correspondence” forwarded by CBP generated numerous requests for further discovery in BDW’s facsimile of 6 November 2000 to CBP which, so far as is relevant, included the following :

“4.12 As to the email from John Waldmann dated 20 August 1999, please discover:


(a) All documents relating to or recording the “results on active by running some parallel testing at a qualified testing lab in India”

(Category 24)

(b) All documents relating to or recording the consistent data from Berkley Vale and Medical Research which supports conclusion of product formulation issues.

(Category 25)
4.13 …

(e) all documents recording or relating to the consultation by Aust QA and P& RS of US microbiologist and any reports or documents prepared by the microbiologist;

(Category 30)

(f) all documents which record or relate to the recommendation to “go for formulation change” and the decision and reasons for not changing formula;

(Category 31)
…

(g) all documents which record or relate to the real time stability data which conclusively indicates that the product is not in compliance for Active as well as Preservative.”

(Category 33)

22    BDW’s facsimile of 6 November 2000 concluded with the following observations as to the plaintiff’s obligations of discovery:

“6. Discovery by Procter & Gamble’s parent company
As you have noted your client is required to discovery (sic) all relevant documents which are within its “possession, custody or power”. It is clear from your letter that relevant documents exist within the related overseas corporations. Obviously, the email correspondence between John Waldmann and other Procter & Gamble employees falls within this category.
Your client is required to make proper inquiries and efforts to identify and disclose all relevant documents. This obligation extends to making inquiries from the person in whose possession the documents now are: see Mertens v Haigh (1863) 46 ER 471; Re McGoram; ex parte Co-Operative Building Society of South Australia (1989) 86 ALR 275. We do not consider that your client has made reasonable efforts to discover these documents. Your client is clearly required to request these documents from the related overseas companies; Solartech SBN v Solarhart Industries (Sandersom, M, unreported, SASC 22 October 1997). Furthermore, you have offered no explanation as to why any of the overseas companies will not co-operate and provide copies of the relevant documents to your client.
Our client is very concerned that your client either does not understand or is not prepared to properly discharge the onerous obligations that it has to give full and complete discovery relating to the matters in issue in the proceedings and, in particular, to causation. Please ensure that all steps are taken to ensure that your client understands and fully discharges its obligations in relation to discovery.
Given the timetable for preparation of witness statements and expert reports, unless we receive an adequate response from you by Friday 10 November 2000, we intend to apply to the Court for orders that the plaintiff provide further and better discovery.”

23    It was in that context that the Court’s direction of 17 November 2000 for further discovery was given.

24    In relation to category 24: the Waldmann email of 20 August 1999 was one to Jackie Williams, she being Jacqueline Elizabeth Williams (Williams), the quality assurance manager for the plaintiff. The email related to “stability questions with Sinex” and contained the following statement:

“2. Have we identified whether the problem is analytical or product-process related ?
The issue is not analytical. We have confirmed these results on active by running some parallel testing at a qualified testing lab in INdia.” (sic) (Emphasis added)

25    Those were the “results” the subject of BDW’s request for better discovery.

26    As to category 25: the same Waldmann email contained the following statement:

“Consistent data [with results of India testing] from BV and Med Res supports conclusion of product formulation issues”.

“BV” is a reference to Berkeley Vale and “Med Res” is a reference to Medical Research. It was that “data” which was the subject of BDW’s request in the 6 November facsimile for better discovery.

27    As to categories 30, 31 and 33: there was included in the correspondence accompanying CBP’s letter of 2 November 2000, an email from Guru Sukthankar (Sukthankar) to Waldmann copied to Williams, Anil Shah (Shah), and Ashok Mehta (Mehta) in the following terms:

“ I am going to answer your Q’s along with some background information. I believe I will be able to give you all the relevant info and details, as I was involved in this as Asia TSO manager from the time the first issue was reported (Drop in the level of Preservative). Jackie inherited these issues, we investigated/identified additional one (Drop in level of Active) as TSO and got management to take some actions.
Jackie, request you to correct me as necessary.
Aust Sinex was being manufactured in Berkley Vale (BV), P&G Plant. Around 1996 BV QA reported product stability issue ie drop in preservative (Thimerosal) lower than specified level. Collation of data by QA indicated that this observation was true for more than one batch. I was informed by Aust QA to support further investigation and any action. After some investigation it was found that,
-Aust formula is Unique in terms of preservative and buffer system
-US use to manufactureand (sic) sell this formulation, but got out of it due to some issues which were safty (sic) related from US Regulatory perspective.
-No other market in Asia manufactured Sinex hence technology was not much known in Asia.
I was unable to provide much support at this point since it was unique formulation and I had no experience in Asia with this product. Aust QA and P&RS consulted US microbiologist [Category 30] to conclude that the level of preservative though lower than specified was not low enough to cause any major alarm. In the mean time India had developed plans to introduce Sinex (Australia Formula) for local market. I got involved and working with Europe changed Indian plans to launch Odyssey-R&D recommended Europe formulation (delay of about 6-9 months due this change got support from India/Asia management.)
As the plans for BV shut down got made and it was decided to qualify local contractor-Medical Research (Jackie got involved at this stage), reco was to go for formulation change [Category 31]. Based on India launch we were by then ready to support with Euro Sinex technology, however formula change was not persued (sic) by Aust since required qualification time, resources and data (Aust specific BP requirements) were not available. Aust decided to start with sourceing (sic) site change registration instead of long lead time new product registration.
During New Contractor qualification the accelarated (sic)stability date indicated issue with active. The predictive data indicated lower level of active than specified. Data from BV Plant for this active was inconclusive. Based on this date as an immediate step we proposed to reduce the shelf expiry claim on the package to 1Yr. This change was implemented after agreement with Asia PDD/P&RS /R&CD /QA and PS. We agreed to monitor real time data, focus on Odyssey Sourcing Site change and not to do any further work on this product for Aust.
Jackie now has real time stability data on this product which conclusively indicates that this product is not in complience (sic) for Active as well as Preservative . [Category 33]
With this background I am answering your questions below. In case you have any more questions please do let us know.”
(Emphasis added)

28    There was some further correspondence between the solicitors for the parties which concluded with a facsimile from BDW to CBP of 14 December 2000 which contained the following:

“Your letter fails to respond to our letters dated 10 October and 6 November 2000. Furthermore you have failed to provide us with any grounds for your statement that the categories of documents referred to in our letter of 14 November are not relevant to any fact in issue in the proceedings and are not discoverable. The documents are clearly relevant as they relate to causation and the damages claimed by your client.
…
As your client has failed to comply with the order that it provide further discovery by 8 December and has failed to respond to our various letters regarding the inadequacy of the plaintiff’s discovery our client will make the appropriate application to the court.”

29    The motion came on for hearing on 2 February 2001 in the motions list and was unable to be completed. It was adjourned to 4pm 7 February 2001 and then to 4.15pm 13 February 2001.

30    During the course of the hearing, the supplementary discovery lists of the plaintiff were filed in court on 7 February 2001, having been served on the defendant on 1 February 2001. It is not disputed that the documents so discovered by the plaintiff consisted of approximately 2000 pages and occupied seven lever arch folders.

31    Senior counsel for the defendant was not in a position, on 2 February 2001, to present detailed submissions as to the extent to which that supplementary discovery satisfied the defendant’s requirements for further discovery.

32    It appears from submissions, presented by senior counsel on behalf of the defendant on 7 February 2001, that the further discovery by the plaintiff removed from dispute all categories other than the seven categories referred to earlier in these reasons. The plaintiff has resisted any further discovery as sought by the defendant in respect of the seven disputed categories.

33    In support of its case the plaintiff relied on affidavit evidence, which was read without objection, save in one respect which is referred to in the following reasons. In her affidavit sworn 23 January 2001, Williams testified to having the overall responsibility for quality standards in the manufacture of the plaintiff’s goods, including responsibility in relation to compliance with various regulations. She deposed to the fact that she had received a facsimile of 15 November 2000 from the plaintiff’s solicitors “advising [her] of the steps that needed to be taken in the discovery process”.

34    Initially, client legal privilege was claimed in respect of that facsimile. However, following indications from the bench that privilege had been waived, the facsimile was tendered. It was in the following terms:

“We attach a further letter received from the other side. You will see that the issue of discovery has become something of a “fishing expedition” for them, in that they are attempting to discover all and as much documentation as they possibly can.

Many of the items they have requested (concerning the “sequence of correspondence with John Waldman”)(sic), relate to the emails you supplied to us on 10 October 2000. For your assistance, we attach a copy of those emails. In relation to items 4.4 and 4.5 in the other side’s letter, we have asked them to identify precisely which emails they are referring to, before we can respond to them.

Would you kindly and as soon as possible, read through the list of issues in the other side’s letter and advise if in each case there are documents along the lines which they specify as “presumably” being in existence. If there are such documents, can you please identify them and supply us with copies.

At the same time, please advise how extensive the documentation held by overseas companies in the P&G group would be concerning the Australian Sinex issues . We refer to any documents concerning the move to North Rocks, any stability or preservative issues, the Recall and the sourcing of the new product from Cayey. Please also advise if (and how soon) a full set of such documentation could be put together. Although we consider that the other side’s requests are becoming vexatious and beyond what should reasonably be discovered, their next step may be to issue subpoenas to companies in the P&G Group. In such a case, we would then be compelled to produce such documentation in any event .” (Emphasis added)

35    This facsimile, it may be noted, was received two days prior to the directions hearing of 17 November 2000 providing for further discovery by the plaintiff.

36    The emphasised passages indicate the absence of any worthwhile steps taken by the plaintiff to discover material held by its related corporations.

37    With the facsimile of 15 November, CBP provided to Williams a copy of BDW’s facsimile of 6 November 2000 and attached the documents to which those requests related.

38    Upon receipt of CBP’s facsimile of 15 November, Williams enquired of Waldmann by email of 16 November in the following terms:

“John,

Believe it or not, the Sinex recall from last year is still causing issues for us. The law firms representing Medical Research and P&G have been working the discovery phase of the court case and we are still “discovering”.

As part of the discovery, documents related to the stability issues we had on our Health Care products have been requested/supplied.

Medical Research’s Lawyers have requested us to supply all Emails/documents related to this subject as they believe that we initiated the recall because of known stability issues rather than the ethanol contamination.

If you remember, about August last year there were numerous communications regarding the subject. I have been through all of my Emails, but there are a few gaps which they have picked up.
Could you please search your files/Emails etc and see what you still have related to this subject.
Some particular communication they are referring to is:
You sent an email to Ash Mehta on Aug 6, 99… ”

39    (The dates on the various emails vary in relation to the order of month and day of dispatch - the Waldmann email to Mehta appears to place the day before the month). Waldmann responded that he had found no documents as sought by Williams.

40    On 20 November 2000 Williams conferred with Jeremy Charles Lucas (Lucas), the solicitor assisting CBP’s partner having conduct of the matter on behalf of the plaintiff. In this conference Williams “went through the matters raised in” BDW’s facsimile of 6 November and provided to Lucas “copies of further documents, which [she] had obtained by down loading every item [she] could find in the archived files of the Plaintiff concerning the Sinex product”. Williams instructed Lucas that she was “fairly certain that ...[CBP now had] everything concerning Sinex, which [was] here in Australia”.

41    It is apparent from the following exchange in the course of that conference that enquiry of overseas related corporations for relevant documents had not been made by the plaintiff:

“[Lucas] : Could overseas companies in the Proctor & Gamble Group have other items?
Williams: “I’m not sure. All we can do is ask”.
[Lucas]: Then hold fire for the moment. I will draft a letter you can use for the purpose and get it out to you shortly.””

42    On 29 November 2000 and 18 January 2001, as a result of that arrangement, Williams “directed a series of letters to members of international companies in the Proctor & Gamble group, with whom… [she] had previous dealings concerning the issue of Sinex and its recall.”

43    Those enquiries went to: Waldmann in Cincinatti, Sukthankar in India, Shah in India, Mehta in Cincinatti, Budiarti Hendranata (Hendranata) in Indonesia, and Frank Anastasia (Anastasia) in Japan. The letters made the following requests:

“Would you please conduct a search and advise us of any documents which you may have concerning:
1. MR’s manufacture of Sinex in Australia;
2. The Sinex recall in September 1999, and the months immediately following;
3. The decision that Sinex be sourced from Cayey Puerto Rico for supply to the Australian market;
4. Anything concerning the need to expedite the supply from Cayey.
5. Anything concerning problems related to the stability of Sinex.
If you can locate any such documents, please supply us with copies as soon as possible.”

44    Williams attached to those letters, for the assistance of the recipients, a comprehensive two page note on the nature of discovery.

45    The replies to those letters were as follows:

(a) From Waldmann :

“Jackie
I have no E:mails in my files pertaining to these questions. I retain no E;Mail past the automatic deletion date for sent mail (about four months) and I archive no received E:Mail as a rule. I have checked with our systems folks in Cincinnati about retrieving deleted E:Mail and they tell me that they can only retrieve deleted E:Mail for about three months. They will send me a note to this effect which I will forward to you.
If you would like to discuss this further or need me to pass on what I recall of both situations, you can call me at the office, 622-1191 on Starnet, or at home [phone],
John Waldmann”
(b) From Sukthankar:

“Jackie,
I do not have any of these documents with me here in INdia (sic). If at all it would be in INdonesia (sic). With moving of Std Office, I doubt if any would be available in new Std Office.
I will ask my old Secy in INdonesia (sic) to see if she can locate any of this. This is going to take fair amount of time as she was reassigned after I left. In fact she may be on maternity leave now. I will let you know.
Regards,
Guru”
(c) From Shah:
“Jackie,
Pls see attached file on the possible documents I have with me, this is with reference to your original message dated Nov.28 ’00 and subsequent reminder. My most (sic) of the communication is marked to you. In case any missing one, request you may add to the list.
My apology for delay as I had to search few files, other work, holidays and out of office.
I hope this is sufficient.
Regards,
Anil.”

(d) From Hendranata:

“I am trying to respond to your request of “Medical Research Discovery” yesterday. Frankly, I am not too sure I still have the communication you need. I’ll try and find it out inmy (sic) computer archive like this one. I think I have discarded any hard copy doc on the matter. Would this doc meet your needs? Pls your confirmation. ===BH
P.S. Wouldn’t Doug keep all the communication?===BH”
(e) From Anastasia:

“Thanks for the message below and from a files or information perspective I have nothing on this one in my files that I am aware of. However to assure that you have everything there is I am sending a copy of your request to my secretary, Asahi-san, to check all of my files in Japan even though I believe there is nothing there on Medical Research. If she finds anything she will send it directly to you.”

46    Mehta forwarded, in reply, some emails which had been “retrieved” and which were included in the plaintiff’s supplementary discovery.

47    In her affidavit, Williams explained the purpose of limiting the discovery enquiry to the six recipients as follows:

“Other than the six managers I have written to, it is most unlikely, in my opinion based on my experience as an employee of the Plaintiff over the last 27 years and my involvement with the Sinex product for the last 20 years, that any employee of an overseas related company in the Proctor & Gamble Group would have retained any documentation concerning the Sinex issues the subject of this litigation. This is because they were the ones who (because of their positions in the Proctor & Gamble group of companies) were kept appraised of all that was going on in Australia and New Zealand, Kerrie Donoghue, the only other overseas Manager involved, has now retired. Further, it is not usual for any Manager (overseas or local) to retain copies of documentation for periods of time in excess of six to twelve months.”`

48    As to the completeness of the discovery process as pursued by her, Williams stated as follows:

“14. As far as documents in the possession, power or control of the Plaintiff are concerned, I am the person who had possession of most of the documents concerning Sinex production by the Defendant, technical data and the Recall itself. As part of the discovery process, I requested all other employees of the Plaintiff who to my knowledge had an involvement with Sinex (Douglas Anderson, Peter Jakymin, Louise Misso, Dennis Fear, Natalia Yelland, Allen Lowe, Scott Wilkins and Antoniette Lindsay) to supply me with any documents related to Sinex in their possession. All documents provided to me in response have been handed by me to the solicitors for the Plaintiff.”

49    Of an affidavit by Lucas sworn 23 January 2001, Williams stated as follows:

“ 15. I have read the affidavit of Jeremy Charles Lucas of 23 January 20001, and say that I have been the person primarily responsible for locating the additional documents the Defendants have demanded that the Plaintiff discover, and further say that the information provided by Mr Lucas in his Affidavit is, to the best of my information and belief, correct.”

50    The affidavit of Lucas sworn 23 January 2001 outlined the steps he had taken in relation to discovery on behalf of the plaintiff. That included providing the plaintiff with notes on discovery which, apparently, accompanied Williams’ letters to the overseas related corporations of the plaintiff. Lucas stated that he had explained to Williams the need to make enquiries of those entities “with whom the plaintiff had previous dealings concerning the Sinex product and its recall.”

51    I think, in light of what I have referred to in Williams’ affidavit, that advice must have been given on the occasion of the mid-November conference with Williams, so far as it concerned the overseas related corporations of the plaintiff.

52    Par 3 of Lucas’ January affidavit was in the following terms:

“3. To the best of my knowledge based on my instructions from Jackie Williams, Douglas Anderson, Peter Jakymin, Gifford Bunt, Peter Lord, Antoinette Lindsay, and Louise Misso, all being employees of the Plaintiff, and my participation in the discovery process on behalf of the Plaintiff, the Plaintiff’s List of Documents and the Plaintiff’s Supplementary List of Documents, which is in the process of being finalised, list all documents in the possession, custody or power of the Plaintiff relevant to the matters in issue between the parties in these proceedings. In addition, they list all documents provided to the Plaintiff pursuant to a written request to other companies within the Proctor & Gamble Group of Companies, relating to those issues.”

53    He further testified as follows in respect of the documents, the subject of the seven disputed categories:

“4. In respect of the documents sought by the Defendant in its Motion dated 14 December 2000, my instructions are
that:

(a) The documents identified in Items 1 and 3 in the Defendant’s Schedule are multiple copies of documents which have already been discovered and are listed on page 1.1112 of the Plaintiff’s List of Documents. The Plaintiff has been unable to locate any other copies of these documents despite an extensive and thorough search of the documents in its possession, power or control. With the exception of Doug Anderson, Jackie Williams, Gifford Bunt, Peter Jakymin and Pauline Gan none of the persons identified in Items 1 and 3 are employees of or consultants retained by the Plaintiff, and accordingly, if such copies do exist they are not in the possession, power or control of the Plaintiff.

(b) The document identified in Item 25 in the Defendant’s Schedule are in fact documents identified in an email from Guru Sukthankar to John Waldmann of 23 August 1999, in response to an email from John Waldmann. These are documents that are not in the possession, power or control of the Plaintiff. If they are in the possession of a company within the Proctor & Gamble group of companies, they have not been made available to the Plaintiff despite the request referred to in paragraph 2 of this my affidavit and paragraphs 6 and 12 of the affidavit of Jacqueline Elizabeth Williams of 23 January 2001.

(c) The documents identified in Items 4, 5, 6, 7, 29, 31, 33 and 46 in the Defendant’s Schedule are documents that are not in possession, custody or power of the Plaintiff. In the case of Item 7, the Plaintiff has, in addition to its internal investigations, made enquiries of the Therapeutic Goods Administration (“TGA”) and has been informed that the TGA has no record of receiving such notification. If the documents referred to in Items 4, 5, 6, 7, 29, 31 and 46 are in the possession of a company within the Proctor & Gamble Group of Companies they have not been made available to the Plaintiff despite the request referred to in paragraph 2 of this my affidavit and paragraphs 6 and 12 of the affidavit of Jacqueline Elizabeth Williams of 23 January 2001. In the case of item 30, the Plaintiff has been specifically informed by John Waldmann of the Proctor & Gamble Company that no such documentation is in his possession. Any documents obtained from Guru Sukthankar of Proctor & Gamble India Ltd will be included in the Plaintiff’s Supplementary List of Documents.

(d) The documents identified in Items 8 and 30 in the Defendant’s Schedule are documents which are so imprecisely described in the Motion as to make it oppressive for the Plaintiff to have to search for them. All documents relating to Project Odyssey relevant to the matters in issue between the parties and in the possession, power or control of the Plaintiff have either already been discovered or will be discovered as part of the documents listed in the Plaintiff’s Supplementary List of Documents. Project Odyssey is a 5 year health care sourcing plan which relates to all companies in the Proctor & Gamble Group of Companies. For the Plaintiff to be required to locate all such documents, including those held by all of the companies in the Proctor & Gamble Group of Companies, would require a substantial amount of time and labour, and would be oppressive in particular, as the majority of documents relating to Project Odyssey are not in any way relevant to any matter in issue between the parties and therefore not discoverable. As regards the documents referred to in Item 30, the Defendant fails to identify with any specificity the “consultation” to which these documents relate, and accordingly the search would impose upon the Plaintiff too onerous a burden.”
…

(j) Items 9, 22, 23 and 36 in the Defendant’s Schedule are documents which the Plaintiff has been unable to locate despite an extensive and thorough search by the Plaintiff of the documents in its possession. Enquiries made by the Plaintiff confirm that no such documents have ever been in the possession, power or control of the Plaintiff.

(k) As to Item 24 in the Defendant’s Schedule, “results on active…from Med Res” were generated by the Defendant, and to the extent the Plaintiff is in possession of these, they have already been discovered by the Plaintiff. Any other documents envisaged by this request may be in the control of a related company over which the Plaintiff has no control. The “BV” (Berkley Vale) documents to the extent the Plaintiff has been able to locate them, are contained in pages 1938-1946 of the Supplementary List of Documents.”

54 Objection was taken to that paragraph on the basis that it was hearsay and, notwithstanding the interlocutory nature of this application, it was in a form that did not satisfy s 75 of the Evidence Act 1995 which provides as follows:

“In an interlocutory proceeding the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source”.

55 While I do not regard s 75 as excluding the exercise of the Court’s discretion on interlocutory applications to receive hearsay evidence (cf Geoffrey W Hill & Associates v King (1992) 27 NSWLR 228). I think the requirements of s 75 have been satisfied, notwithstanding the failure of Lucas, in respect of each of the hearsay statements in paragraph 4 of his January affidavit, to particularise who, among the persons referred in paragraph 3 of that affidavit, was the source of his instructions. I think it is sufficient compliance with the section to identify the source of the hearsay statements in the compendious way Lucas has expressed himself in paragraphs 3 and 4 of his affidavit.

56    To the extent that I have a discretion in the matter, I would exercise it in favour of admitting the material, having regard to the likely costs and undue burden of segregating each piece of hearsay information and identifying the particular officer of the plaintiff who was the source of instructions in respect of each matter.

57    Moreover, one questions the necessity for the plaintiff to rely on those paragraphs of Lucas’ affidavit, since each of the plaintiff’s lists of documents have been verified on behalf of the plaintiff by the company secretary and are the subject of certificates by Lucas as to the sufficiency of the discovery.

58    The plaintiff relied on two further affidavits of 6 February 2001, sworn respectively by Lucas and Williams. In Lucas’ February affidavit he outlined the manner in which he had generated the original list of documents. That involved his attendance at the plaintiff’s premises where he examined “numerous folders of documents concerning the issues in these proceedings.” He further made enquiry of those employees of the plaintiff who provided statements of evidence “about availability of any documents in their possession concerning Sinex”.

59    Of the supplementary lists he testified as follows:

“8. Subsequent to the filing and serving of its original List of Documents, and independently of any queries by the Defendant, the Plaintiff has located additional relevant documents. These include invoices, emails which had been archived and not previously located, and some documents regarding the obtaining of supplies of SINEX. As these documents were located, they were collated for incorporation into a Supplementary List of Documents. Additional documents continued to be located into December 2000 and then January 2001, and the Plaintiff therefore withheld filing its Supplementary List until the end of January 2001. I apologise for any discourtesy to the Court and any inconvenience to the Defendant resulting from the Plaintiff’s failure to give discovery by 8 December 2000 in accordance with the direction of Rolfe J on 17 November 2000. I formed the view that it was important to make the Supplementary List as complete as possible.

9. All hard copies of documents with which I have been provided have been included either in the original List of Documents or Supplementary List of Documents. I did however, overlook the fact that electronic documents were not discovered in electronic form, but only as hard copies.

10. At the time of verifying the Supplementary List of Documents, and my certification of that List of Documents and before these steps had been done, I explained to Mr Bunt, the Plaintiff’s Company Secretary the steps that had been taken in putting the Supplementary List together.”

60    The Williams’ February affidavit testified to the circumstances in which electronic records were dealt with in the discovery process as follows:

“4.1 …I asked all of the employees of P&G who had been connected with the manufacture of Sinex and/or with the Defendant to provide me with hard copies of all relevant emails and other documents retained by them on their personal computers.

4.2 I myself printed out from my personal computer all documents and emails relevant to the issues between the parties in these proceedings and placed these hard copies in manilla folders. When I received copies of documents from other employees, I also placed those copies in manilla folders. When I was satisfied that I had received all documents from all P&G personnel, I sent all of the manilla folders and their contents to P&G’s solicitors. These documents comprise the 34 volumes of documents which were discovered in the Plaintiff’s List of Documents filed and served in August 2000.


4.3 To the best of my knowledge and belief, P&G has discovered, in its First List and its Supplementary List, hard copies of every relevant electronic document in its possession, custody or control. It will formally discover the electronic originals of those documents in its Further Supplementary List of Documents.

4.4 In July 2000, I did not ask P&G personnel to provide me with electronic copies as well as hard copies. I now understand that P&G is required to formally discover the electronic copies of relevant documents. P&G is now taking steps to download from its computers such electronic copies of the hard copy documents already discovered as presently exist. I estimate that this task will take four weeks. P&G technology staff will record the documents into an appropriate medium such as CD-ROM or ZIP disk.”

61    As to the items the subject of disputed categories, her evidence was as follows:

“5.1. Items 1 & 3

(Copies of emails)

5.1.1 P & G uses “Lotus Notes” email software. I have made enquiries of the technical staff at P&G who have informed me that Lotus Notes automatically deletes an email message that has not been archived 150 days after the last action involving that email - that is, after that email was last read or printed. The automatic deletion process eliminates the email from the hard disk of the computer in question, and it cannot be restored.

5.1.2 I am informed that P&G creates daily back-up tapes of Lotus Notes email data. The back-up tapes are stored for 8 weeks and then overwritten.

5.2 Item 25

(Stability testing data from the Berkeley Vale plant)

5.2.1 I have carefully read this email which is from an employee of an associated P&G company in India to an employee of another associated company in the USA. It refers to stability testing data from the Plaintiff’s plant at Berkeley Vale, but I cannot identify the particular “data” referred to.

5.2.2 Berkeley Vale stability data has been discovered in P&G’s Supplementary List (Documents 1938-46). This data is contained in a hard copy print generated from an IBM AS400 computer system which is no longer used by P&G. It was taken out of service in or about July 1999 because it was not Y2K compliant. This computer was situated at the Parramatta offices of P&G and was connected to terminals at the Berkeley Vale plant. It was the practice of P&G employees at Berkeley Vale to enter test data into the AS400 computer from lab work sheets, and to then file those work sheets. I have searched for these files and cannot find them. I do not know where they are or what has become of them.

5.2.3 To the best of my knowledge and belief, from enquiries that I have made of P&G technical personnel, some of the information on the old P&G AS400 system was transferred to an IBM AS400 system which is situated in Singapore.

5.2.4 I am making enquiries to establish whether any data sought by the Defendant is retained on that system, but will not know for another two (2) days whether or not it is.

…
5.5 ITEM 31

(Formulation change)

5.5.1 I have searched for all documents relating to the change of formulation and cannot find any others.

5.6 Item 33

(Real time stability data)

5.6.1 The data that has been discovered in P&G’s First List (2.0796-2.0804) is the only data that I have been able
to locate up to this time.

5.7. Items 8 & 30

(Project Odyssey & microbiologist consultation)

5.7.1 In August 1999, I consulted a Mr Steven Miller, a US microbiologist and my communications are discovered
in P&G’s Supplementary List (1710-11 & 1737-39)”.

62    The February Williams’ affidavit testified to the sufficiency of the discovery process as follows:

“6. To the best of my knowledge at the time of swearing this affidavit, the Plaintiff has no further documents to
discover that are in its possession, custody or power. It will continue to make enquiries about the possible
existence of relevant documents including documents in the possession of associated companies overseas.

7. I refer to paragraph 7 of my First Affidavit and Annexure “F” thereto (“Notes for Discovery”). I first read that
document in November 2000, but I recall that the obligation to disclose all documents relevant to the issues in
these proceedings were explained to me before I commenced the task of collecting the Plaintiff’s discoverable
documents in mid-2000.”

63    Senior counsel for the defendant sought leave to cross examine Williams on her 23 January 2001 affidavit. I deferred granting leave to cross examine and made no decision on that matter prior to the conclusion of the hearing. Although no further application was made on behalf of the defendant, the application to cross examine should be taken as having been refused.

64    I think the true rule in resolving a question of sufficiency of discovery is as follows:

The affidavit verifying discovery is conclusive of the question unless it can be shown (i) by recourse to the documents discovered; (ii) from the content of the affidavit verifying discovery; (iii) from the pleadings, or “from any other source that constituted an admission of the existence of a discoverable document” that the discovery has been insufficient. Further, where the discovering party has misconceived the nature of the obligation of discovery it is not necessary to infer the existence of relevant documents other than those discovered (see Mulley v Manifold(1959) 103 CLR 341 at 343 and Falk v Finlay, Supreme Court of New South Wales, Austin J, 24 December 1999, unreported).

65    The rationale for Chancery’s approach to contests over discovery was expressed by Bowen LJ in Lyell v Kennedy No 3 (1884) 27 Ch D 1 at 30 as follows:

“The true canon to be always borne in mind, is this: that you are appealing to the oath or conscience of the other side, and that you cease to appeal to his oath the moment you begin to contest his accuracy.”

66    It is on this basis that the Courts have been averse to cross examination on affidavits verifying discovery. See Fruehauf Finance v Zurich Australian Insurance Ltd (1990) 20 NSWLR 359 at 360 et seq. in which Giles J, as his Honour then was, extensively reviewed the authorities.

67    The case has been conducted on the basis that proper discovery required the plaintiff to ascertain the existence of and obtain, if able to do so, relevant documents in the possession of its related corporations. Accordingly, I have not been required to examine the relationship between the plaintiff and other corporations in the Proctor & Gamble group, which I have loosely referred to as related corporations (but cf Lonrho Ltd v Shell Petroluem Company Ltd (No 2) [1980] 1 WLR 627; Linfa Pty Ltd v Citibank Ltd [1995] 1 VR 643 and Taylor v Santos Ltd (1998) 71 SASR 434.

68    I have treated the question in this case as one requiring examination of the documents discovered by the plaintiff, the verifying affidavits and certificates and the evidence of the discovery process adduced on behalf of the plaintiff.

69    As to category 1 : this category is repeated for ease of reference:

“1. Frank Anastasia, Doug Bierer, Doug Anderson, Jackie Williams, Pauline Bay and John Waldmann’s copies of an email from John Waldmann to Frank Anastasia dated 8 September 1999 [reference: page 4 of exhibit EJP1 to the Affidavit of Emma Jane Press sworn 14 December 2000 (“EJP1”) and paragraph 4.2 of the fax from BDW dated 28 September 2000 (pages 1 to 3 of EJP1)]”

70    Clearly, copies of the Waldmann email were forwarded to the persons named in this category and had not been discovered. The response of CBP of 2 November 2000 was that “everything in the Plaintiff’s Possession” had been discovered. One of the problems with that response is that it appears from Williams’ January affidavit that, at the time of that response, enquiries had not been made of related corporations of the plaintiff for discoverable documents.

71    Moreover, Lucas’ January affidavit is inaccurate in stating that “multiple copies of [the subject email had] already been discovered and [were] listed on page 1.112 of the Plaintiff’s List of Documents.”

72    For the reasons earlier stated, I am satisfied that no serious enquiry had been made of the plaintiff’s related corporations for relevant documents prior to the verification of the plaintiff’s list of documents on 7 August 2000.

73    Moreover, I think it is clear from the affidavit of Williams sworn 6 February 2001 that she had not understood that, in addition to hard copies, it was necessary “formally to discover the electronic copies of relevant documents.”

74    However, having regard to the evidence of enquiries of related corporations made by the plaintiff in and since November 2000, the responses to those enquiries, the affidavits of verification of the plaintiff’s supplementary lists and the evidence of Williams as to the automatic deletion of emails by the “Lotus Notes” software, an order for further discovery in relation to this category is not warranted.

75    As to category 9 : this category is repeated for ease of reference

“9. All correspondence between the plaintiff and the TGA in relation to Sinex’s failure to meet any stability tests including the notification given to the TGA/BoH of the shelf life reduction referred to in Exhibit JEW89 to the statement of Jacqueline Williams [reference: page 10 of EJP1 and fax from BDW dated 10 October 2000 (page 9 of EJP1)].”

76    The material there referred to evidenced an investigation that demonstrated that “the stability data [supported] only 12 months shelf life” and contemplated that manufacturing of Sinex with a shelf life of that duration “would require a notification to the TGA BoH of shelf life reduction”.

77    Lucas, in his January affidavit, testified that “the Plaintiff [had] been unable to locate [documents within this category] despite an extensive and thorough search by the Plaintiff of the documents in its possession” and that documents of that description had not ever been in the possession, custody or power of the plaintiff.

78    Lucas also testified in relation to category 7 that “the plaintiff [had] in addition to its internal investigations, made enquiries of the Therapeutic Goods Administration…and [had] been informed that the TGA [had] no record of receiving such notification.” It is not clear to me that the notification there referred to is the same notification as is the subject of category 9.

79    In her February affidavit, Williams testified that she had “searched for any document containing the notification to the TGA to reduce shelf life, but [could] find no document answering this description”.

80    It was submitted on behalf of the defendant that there was a “substantial reason for … scepticism” in relation to the sufficiency of the discovery, having regard to the “contents of documents 1349 and 1450 produced in the Supplementary Discovery which indicated] that a Mr J Gray (Gray) was to do a ‘notification’ to the “TGA”.

81    The documents referred to by senior counsel for the defendant were incorporated in the plaintiff’s submissions in reply to which no objection has been taken. I think it is clear from those emails that Williams requested Gray to “commence application (notification ?) to TGA Aust and BOH (NZ) to reduce the shelf life of Sinex from the current 2 years to 1 year”. In that same email he was requested to let Williams know if he required any data to support the application. He was requested to inform her of the type of application that would be necessary and the estimated time of approval.

82    The response of Gray was as follows:

‘Just to confirm what we have been discussing. I have notified both Australia and New Zealand that we have reduced the shelf life to one year. In Australia it is a notification and took effect from the date it was sent . New Zealand on the other hand may ask some questions, but, I hope my letter which was faxed to them heads that off. We shall see.” (Emphasis added)

83    It was submitted on behalf of the plaintiff that the subject emails do not disclose that Gray had made such an application and that there was no evidence that there was any correspondence with the TGA.

84    However, I think contrary to those submissions, that a notification had been “sent” to “TGA” as well as a letter having been sent to the New Zealand authority.

85    It is not clear to me who “J Gray” is and, in particular, whether he is part of the Proctor & Gamble organisation.

86    Notwithstanding, I think the evidence of Williams, in her affidavit sworn 6 February 2001, of specific search for this document should be taken as conclusive when read in conjunction with the affidavits of Lucas and those of the company secretary verifying the supplementary lists.

87    The affidavit verifying the Further Supplementary List identified the following amongst documents no longer in the possession, custody or power of the plaintiff:

“Any notification to the Therapeutic Goods Administration to reduce the shelf life of the SINEX product.”

88    As to category 24 : this category is repeated for ease of reference:

“24. All documents relating to or recording the “results on active by running some parallel testing at a qualified testing lab in India” referred to in the email from John Waldmann dated 20 August 1999 [reference: pages 62 to 63 of EJP1 and paragraph 4.12(a) of the fax from BDW dated 6 November 2000 (pages 83 to 87 of EJP1)]. ”

89    It was submitted on behalf of the defendant that par 4(k) of Lucas’ affidavit of 23 January 2001 reveals “a misunderstanding of the documents sought”. I think there is some justification for that submission in that the relevant paragraph 4(k) mis-describes the category by referring to it as “results on active … from Med Res” and describes them as being “generated by the Defendant”.

90    Category 24 in fact refers to the Waldmann email of 20 August 1999 which contains the following statement:

“We have confirmed these results on active by running some parallel testing at a qualified testing lab in INdia (sic)”

91    I think it is clear from the affidavit evidence of Williams that the plaintiff has discovered the documents in this category which are actually held by it. It also appears from that evidence that the only “results” of the Indian tests in the possession, custody or power of the plaintiff are those set out in the table, being discovery document 1417. It was submitted on behalf of the defendant that the plaintiff “has not discovered the source Indian documents from which the Indian data on this Comparative Table was apparently compiled”.

92    It would not have been surprising had the plaintiff’s related corporation in India disclosed source documents upon which the table of results was apparently prepared. However, having regard to the November 2000 enquiries by Williams of Sukthankar and Shah, both of whom are employed in the Proctor & Gamble group’s Indian arm, to their responses and the affidavits verifying supplementary discovery, I am not persuaded that an order for better discovery is justified.

93    As to category 25 : that category is repeated for ease of reference:

“25. All documents relating to or recording the consistant data from 1996 Berkely Vale and Medical Research which supports conclusion of product formulation referred to in the email from John Waldmann dated 20 August 1999 [reference: pages 62 to 63 of EJP1 and paragraph 4.12(b) of the fax from BDW dated 6 November 2000 (pages 83 to 87 of EJP1).”

94    The subject matter of this category is referred to in the same email as is the subject of category 24. It was submitted on behalf of the defendant, that documents numbered 1242 and 1244 in the plaintiff’s discovery “clearly [showed] that at some time the plaintiff did have [the subject] data from Berkeley Vale” and noted that the plaintiff’s discovery does not list any documents “which [had] at some stage or other been in the plaintiff’s possession but have subsequently been lost or destroyed”.

95    Documents 1242 and 1244 are, respectively, an email from Williams to T A Wetzel of 28 July 1997 and an email from T A Wetzel to R H Wendt of 29 July 1997, with their respective attachments.

96    I think it is clear from Williams’ evidence, particularly pars 5.2.1 to 5.2.4 of the February affidavit, quoted earlier in these reasons, that the only documents in the possession, custody or power of the plaintiff have been discovered.

97    I am unable to conclude on the evidence before me that the documents within this category, other than those discovered, were once in the possession of the plaintiff, as asserted on behalf of the defendant.

98    To the extent that such a contention may be correct, the affidavit verifying the plaintiff’s Further Supplementary List includes the following amongst documents once in the plaintiff’s possession but which it no longer possesses:

“Work sheets or any other documentation, showing stability and other data, generated by the Plaintiff at its Berkeley Vale plant, in respect of SINEX produced at that plant.”

99    As to category 30: this category is repeated for ease of reference:

“ 30. All documents recording or relating to the consultation by Aust QA and P&RS of US microbiologist and any reports or documents prepared by the microbiologist referred to in the email from Guru Sukthankar to John Waldmann of 23 August 1999 [reference: pages 61 to 62 of EJP1 and paragraph 4.13(e) of the fax from BDW dated 6 November 2000 (pages 83 to 87 of EJP1)]”

100    In her February affidavit Williams gave the following evidence:

"5.7.1 In August 1999, I consulted a Mr Steven Miller, a US microbiologist and my communications are discovered in P&G’s Supplementary List (1710-11 & 1737-39)”.

101    It was submitted on behalf of the defendant that this is an “inadequate” response, noting as follows:

“13. In the E-mail referred to (at EJP 1, p62.4) Mr Sukthankar observes :-
“Aust QA and P & R S consulted US microbiologist to conclude….”
No evidence has been put on by the plaintiff to reveal any inquiry made to Mr Sukthankar to determine the identity of the relevant microbiologist nor of any inquiry made with officers of the plaintiff working in either “Aust QA’ or “P & R S” as to that identity”.

102    However, I think the affidavit evidence of Williams, read in conjunction with the enquiries she made of Sukthankar and others and their responses, together with the affidavits verifying discovery should be treated as evidencing sufficient discovery under this category.

103    In my view, the evidence does not warrant the making of an order for better discovery.

104    As to category 31: this category is repeated for ease of reference:

“31. All documents which record or relate to the recommendation to “go for formulation change” and the decision and reasons for not changing formula referred to in the email from Guru Sukthankar to John Waldmann of 23 August 1999 [reference: pages 61 to 62 and EJP1 and paragraph 4.13(f) of the fax from BDW dated 6 November 2000 (pages 83 to 87 of EJP1)]”

105    It was submitted on behalf of the defendant that it was inherently improbable that the recommendation not to change the Sinex formula was made without consultation with the plaintiff and that it was inherently improbable that the plaintiff had no documents relating to the recommendation not to change the Sinex formula.

106    The subject email with its reference to “reco was to go for formulation change” does suggest the existence of some record of the subject formulation change of Sinex. Moreover, the author of the subject email appears to have been situated in India, and as earlier noted, the plaintiff had failed to make appropriate enquiries of related corporations at the time of verifying its original list of documents.

107    I think is it clear from Williams’ evidence that Sukthankar has no relevant documents and that, if any had been in his possession, they would be located in Indonesia. He undertook to make enquiries to see if any documents could be located there. There was no evidence of any further response from him. Should those enquiries yield further relevant documents, the plaintiff is under a continuing obligation of discovery and one assumes any such documents would be discovered in the ordinary course.

108    In any event, Williams made a comprehensive enquiry of Hendranata of Proctor & Gamble in Indonesia which yielded little in the way of results.

109    Further, in her affidavit of 6 February 2001 Williams testified, in relation to this category, that she had “searched for all documents relating to the change of formulation and cannot find any others”.

110    The evidence, in my view, does not warrant ordering the plaintiff to make further discovery.

111    As to category 33: this category is repeated for ease of reference:

“33. All documents which record or relate to the real time stability data which conclusively indicates that the product is not in compliance for Active as well as Preservative referred to in the email from Guru Sukthankar to John Waldmann of 23 August 1999 [reference: pages 61 to 62 of EJP1 and paragraph 4.13(h) of the fax from BDW dated 6 November 2000 (pages 83 to 87 of EJP1)]”

112    Similar observations apply to this category as have been made in relation to category 31. The evidence of Williams in her affidavit of 23 January 2001 and her further affidavit of 6 February 2001 in relation to this category was to like effect to her evidence in relation to category 31. In the latter affidavit she testified that the “data that has been discovered …. is the only data that [she had] been able to locate up to [that] time”. It may be that in the course of the plaintiff’s continuing obligation to make discovery, as in the case of category 31, further documentation may be discovered in relation to this category. However, in my view, the evidence does not justify ordering the plaintiff to make further discovery.

113    It was submitted on behalf of the defendant that it was “obvious that the plaintiff at some stage must have had documents answering the description in this [category and that it] …should discover those documents if it still has them [and further that if] those documents have been lost or destroyed etc then reference should have been made to that fact in the appropriate part of the List of Documents”.

114    There is some basis for this submission in so far as the evidence of Williams speaks only of documents which are not in the possession, custody or power of the Plaintiff. However, I do not think it should be inferred that the plaintiff or its solicitors are under any misapprehension as to the obligation to discover documents which had been in the plaintiff’s possession and, in this respect, I think that the affidavits verifying supplementary discovery, particularly that relating to the Further Supplementary List, should be taken as conclusive evidence of that fact.

115    It was further submitted that the response of Waldmann to Williams’ letter of 16 November 2000 was, in itself, inadequate, in that it appeared that his search may have been limited to emails. However, having regard to the breadth of the inquiry he was requested to make, I think it should be inferred that he had made a full response to the inquiry.

116    There remains the question of costs. I am satisfied that the application for further discovery was justified. Clearly, the plaintiff failed to make appropriate enquiries of its related corporations until November 2000. In my view, those enquiries were only prompted by the requests of BDW in the correspondence outlined earlier in these reasons.

117    Although the plaintiff asserted that the supplementary lists of documents were, in substance, provided as part of its continuing obligations to discover, I have little doubt that a significant part of that further discovery was the direct consequence of the persistent enquiries of BDW.

118    Further, in BDW’s facsimile of 6 November 2000, the plaintiff was forewarned of this application, if further discovery was not provided in a timely way. The plaintiff’s position was stated by CBP in their letter of 21 December 2000 as follows :

“In view of the motion you have recently filed we do not now propose to respond to your letter of 6 November 2000.
We will file and serve an affidavit in mid January in response to yours”.

119    I am satisfied that CBP was unable to comply with BDW’s request for discovery, mainly as a result of the plaintiff’s failure to have made enquiry of its related corporations, essentially, until the end of November 2000. It was open to CBP to inform BDW of this impediment to further discovery by 8 December 2000. That was not done.

120    It was submitted on behalf of the plaintiff that, had the plaintiff complied with that direction, the defendant, in any event, would have persisted with its application. That contention, I think, overlooks the fact that the plaintiff continued to serve further affidavit evidence in relation to this application up until 7 February 2001, the second day of the hearing. I have placed significant reliance upon that evidence, particularly that of Williams’ February affidavit and the affidavit verifying the Further Supplementary List of Documents.

121    The only question that, I think, requires consideration on the matter of costs is whether the hearings which took place on 7 and 13 February 2001 should be included in a costs order, having regard to my refusal to make any order for further discovery. I think that a fair result will be achieved by including the costs of the 7 February hearing on the basis that much of the material upon which I have relied was not filed prior to that day.

122    The hearing on 13 February was of a brief duration, the parties choosing to rely on their supplementary written submissions rather than present further oral submissions. In the circumstances I see no unfairness in making no order as to the costs of that day.

123    Accordingly, the application is dismissed. The plaintiff is to pay the defendant’s costs of the application other than the costs of 13 February 2001, as to which no order for costs is made.

***********

Last Modified: 04/03/2001