W D & H O Wills (Australia) Limited (ACN 004 069 649) v Philip Morris Limited (ACN 004 694 428)
[1997] FCA 526
•13 June 1997
CATCHWORDS
PRACTICE AND PROCEDURE - Evidence - Subpoena to non-party issued at instance of applicant - Subpoena covering substantially same ground as that covered by notice to produce served on respondent - Whether an abuse of process - Whether subpoena advanced legitimate forensic interest.
Re Federal Commissioner of Taxation; Ex parte Swiss Aluminium Australia Ltd (1986) 68 ALR 587
Kettle Chip Co Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152
W D & H O WILLS (AUSTRALIA) LIMITED (ACN 004 069 649) v PHILIP MORRIS LIMITED (ACN 004 694 428) NG 391 of 1997
COURT:Sundberg J
PLACE:Melbourne
DATE:13 June 1997
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No NG 391 of 1997
GENERAL DIVISION )
BETWEEN:W D & H O WILLS (AUSTRALIA) LIMITED (ACN 004 069 649)
Applicant
AND:PHILIP MORRIS LIMITED
(ACN 004 694 428)
Respondent
COURT:Sundberg J
DATE:13 June 1997
PLACE:Melbourne
MINUTES OF ORDER
The Court orders that:
The motion notice of which is dated 27 May 1997 be dismissed.
On or before 18 June 1997, but otherwise in accordance with the subpoena served on it, each of Brian Sweeney & Associates (Australia) Pty Ltd, Cato Design Inc Pty Ltd, Leigh Mardon Pty Ltd and Leo Burnett Connaghan & May Pty Ltd ("the non-parties") produce the documents the subject of the subpoena.
Upon the undertaking of the applicant's solicitors promptly to return to the Court the documents produced in response to the subpoenas, the solicitors have leave to uplift the documents and copy them.
The non-parties pay the applicant's taxed costs of the motion.
Until further order, access to the documents produced pursuant to the order in paragraph 2 hereof be limited to counsel and solicitors (other than in-house solicitors) and that the contents thereof be kept confidential to counsel and solicitors (other than in-house solicitors).
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No NG 391 of 1997
GENERAL DIVISION )
BETWEEN:W D & H O WILLS (AUSTRALIA) LIMITED (ACN 004 069 649)
Applicant
AND:PHILIP MORRIS LIMITED
(ACN 004 694 428)
Respondent
COURT:Sundberg J
DATE: 13 June 1997
PLACE:Melbourne
REASONS FOR JUDGMENT
SUNDBERG J:
Background
On 23 May 1997 the applicant filed an application seeking, amongst other relief, an order restraining the respondent from manufacturing, selling, offering for sale, advertising or promoting in Australia, any cigarettes in packaging which is the same as or substantially similar to the packaging for the applicant's cigarettes depicted in annexures to the application, or in packaging which is the same as or substantially similar to the packaging for the respondent's cigarettes depicted in other annexures. The following description of the parties' respective packaging is taken from an affidavit filed by the applicant in support of the application. The applicant's packets of 50 cigarettes have the following characteristics. Each packet is coloured predominantly blue (resembling the sky) and
features a cloud device in the top right hand front and rear. The blue colouring is graded from light blue to dark blue depending upon the average tar content of the cigarettes in the particular packet. The packet bears the brand name "Horizon" in a distinctive capital letter font, 10 millimetres high, and the lettering on it is metallic gold and white. The packet is approximately 88 millimetres high, 76 millimetres wide and 38 millimetres deep.
The respondent's packets of 50 cigarettes have these characteristics. Each packet is coloured predominantly blue (resembling the sky), and features a symbol of a bird in flight. The blue colouring is graded from light blue to dark blue according to the average tar content of the cigarettes in the particular packet. The packet bears the brand name "Summit" in a distinctive capital letter font 10 millimetres high which resembles that used on the "Horizon" packaging, and the lettering on it is metallic silver and white. The packet is approximately 88 millimetres high, 73.5 millimetres wide and 38 millimetres deep.
The subpoenas
On the date the application was filed the applicant's solicitors caused subpoenas for production to be issued to Brian Sweeney & Associates (Australia) Pty Ltd ("Sweeney"), Cato Design Inc Pty Ltd ("Cato"), Leigh Mardon Pty Ltd ("Leigh Mardon") and Leo Burnett Connaghan & May Pty Ltd ("Burnett"). The documents Sweeney is required to produce to the Court are described in a schedule to the subpoena directed to it as
In relation to the period from 1 July 1991 to date, all documents (including copy, draft, creative or working documents) correspondence, notes, memoranda, minutes of meetings, invoices, computer records on disc or tape, and samples of packaging, point of sale and other
promotional material, relating to the launch, choice of profile, appearance, brand, price, description, style of packaging, advertising, promotion or marketing of "Summit" cigarettes by or for Philip Morris Limited, including without limitation:(a)all briefs and other documents received from or prepared for Philip Morris Limited or its agents, including any research briefs, reports or proposals;
(b)all documents constituting, recording or relating to market or consumer research studies (including research on appearance, packaging, likely market share or profile of product);
(c)all correspondence with, contact reports concerning, reports, presentations or advice provided to Philip Morris Limited or its agents; and
(d)any file relating to "Summit" cigarettes or any synonyms, pseudonyms, or abbreviations thereof.
The introductory part of the other subpoenas is similar to that of the Sweeney subpoena. The specific items in the Burnett subpoena are similar to those in the Sweeney subpoena. Items (a) and (c) of the Cato subpoena are similar to comparable items in the Sweeney subpoena. As well Cato is required to produce "all artwork, bromides, proofs, film and colour standards of any proposed packaging for Summit cigarettes". Item (b) of the Leigh Mardon subpoena is similar to a comparable item in the Sweeney subpoena. Item (a) requires it to produce "all briefs (including any instructions with respect to choice of pack design, shape, colour, graphics and typeface) and other documents (including cigarette packets, bromides, proofs, colour standards and drawdowns, and computer generated colour printouts) received from, prepared for or provided to Philip Morris Limited or its agents".
Non-parties' motion
By notice of motion dated 27 May the parties on whom the subpoenas had been served ("the non-parties") sought orders that each subpoena be set aside on the ground, amongst others, that it is an abuse of process of the court. The abuse contention was based upon the provision by the applicant, pursuant to a Court order, of a list of documents to be included in the respondent's discovery. The list covers substantially the same documents as do the subpoenas taken together. The non-parties' solicitor deposes that she has reviewed the list of categories of discoverable documents required of the respondent, and in her view all documents relevant to the issues the subject of the proceeding, and necessary for the applicant to pursue its claims against the respondent, are covered by the categories contained in the list. She also expresses the belief that the documents listed in the subpoena directed to each non-party are comprehensively covered by specified categories in the list of categories of discoverable documents required of the respondent by the applicant. The applicant filed no material controverting these statements of belief, and my own comparison of the subpoenas with the list shows that there is a substantial overlap between them, in the sense that production of the documents required of the respondent will result in the discovery of a large number of the documents sought of each non-party.
Trial of principal proceeding
On 28 May Whitlam J made orders for the filing and serving of pleadings and affidavits. This process is to be completed by 11 July. The parties were directed to approach the listing officer to obtain a hearing date. It is anticipated that the matter will be heard on either 4 or 11 August, with an estimate of five days.
Subpoena to stranger
For the non-parties reliance was placed on the observation of Beaumont J in Re Federal Commissioner of Taxation; Ex parte Swiss Aluminium Australia Ltd (1986) 68 ALR 587 at 590:
If, for instance, it appears that the subpoenas cover the same or even perhaps substantially the same ground, as is covered by documentation made available by the Commissioner on discovery, it is difficult to see how the subpoena could have a legitimate forensic purpose.
The particular circumstances of that case must be kept in mind in assessing the significance of this passage. The taxpayer there sought mandamus to compel the Commissioner to consider and deal with its objections to an assessment issued under s136 of the Income Tax Assessment Act 1936 on the basis of "transfer pricing". At a time when a date for final hearing had not been fixed, and before issues of discovery between the taxpayer and the Commissioner had been finally determined, subpoenas were issued at the request of the taxpayer requiring Kaiser Aluminium Australia Corporation and Alcan South Pacific Ltd, competitors of the taxpayer, to produce documents relating to their taxation assessments and objections. Though it is not expressly so stated in the report, it appears that Kaiser and Alcan had also been assessed on the basis of transfer pricing. They applied to set aside the subpoenas as an abuse of process. They contended that the documents sought could not be relevant to any of the issues in the principal proceeding, and that it was proper to infer that the subpoenas were issued to them as competitors of the taxpayer for a collateral purpose.
Beaumont J said that if the proper inference to be drawn from particular facts is that a subpoena has been issued to a stranger, not with a view to obtaining documents for use at a trial, but in order to discover, for some other purpose, what documents the stranger holds, an abuse of process may have occurred, and the Court has power to set the subpoena aside. The relevant inquiry is whether, in seeking production from a stranger, the person securing the subpoena has a legitimate forensic interest. The power to order production from a stranger is intended to enlarge the facilities for obtaining production where production is necessary for the purpose of justice. His Honour thought it was too early to form a final view on whether the subpoenas were an abuse of process - whether the documents sought may throw light on the issues in dispute. This would depend, he said, to a significant extent, on the outcome of the discovery to be made by the Commissioner. If the subpoenas covered the same or substantially the same ground as that covered by the discovered documents, "it is difficult to see how the subpoenas could have a legitimate forensic purpose". His Honour stood over the subpoenas and the motion to set them aside to await the outcome of the Commissioner's discovery.
The present case differs from Swiss Aluminium in a number of respects. What was sought by the subpoenas in that case was a number of mainly formal documents relating to tax assessments of the non-parties: original assessments, amended assessments, objections to assessments, correspondence with the Commissioner relating to assessments or objections, and documents recording negotiations or discussions with the Commissioner relating to assessments or objections. In relation to the bulk of these documents, it was immaterial whether they were produced by the Commissioner or by the non-parties. It was thus appropriate in that case to wait and see whether the subpoenas covered the same or
substantially the same ground as that made available by the Commissioner. Having regard to the timetable laid down in the present case by Whitlam J, and the impending hearing date (early August), the course adopted by Beaumont J of adjourning the matter pending completion of discovery is not appropriate. The applicant's further affidavits are to be filed by 20 June.
I think it may be inferred from the subpoenas themselves, and from the general circumstances, that the non-parties are the respondent's advertising and graphic design consultants. The applicant alleges misleading and deceptive conduct and passing off constituted by the design and get up of the packaging of the respondent's new "Summit" cigarettes. It is claimed that the differences between the features of the applicant's packaging and those of the respondent are merely colourable. It is also pleaded that in making its packaging so similar to the applicant's, the respondent "intended" that members of the public would be misled or deceived into believing that the respondent's cigarettes were the applicant's cigarettes, or were "Horizon" cigarettes, or were an extension of the range of "Horizon" cigarettes, or were made by or with the licence of the maker of "Horizon" cigarettes. In those circumstances, the documents sought of the non-parties are central to the proceedings in that they relate to the process by which the respondent arrived at its design. Cf Kettle Chip Co Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 at 156, 163-164, 168-175. Unlike most of the documents sought of the non-parties in Swiss Aluminium, the production on discovery of the respondent's documents will not necessarily mean that production of the non-parties' documents will be unnecessary because they are simply copies of those discovered. For example, the respondent's files relating
to "Summit" cigarettes are unlikely to contain the same documents as Sweeney's file relating to "Summit" cigarettes (item (d) of the subpoena). A non-party is likely to have in its files internal memoranda and draft documents that will not be in the respondent's files. Again there are likely to be communications between a non-party advertising consultant and graphic design consultant that are in their files but not in the respondent's files.
Conclusion
Having regard to the nature of the principal proceedings and the particular allegations that are central to it, I am satisfied that the applicant has a legitimate forensic interest to advance by obtaining the subpoenaed documents. For the reasons I have given, although the description of the classes of documents sought of the respondent by discovery is similar to that of the subpoenas taken together, I do not consider that the documents constituting those classes will necessarily result in the production of identical documents. It follows from my conclusion that a legitimate forensic advantage exists, that I am not satisfied that the subpoenas have been issued for a collateral purpose.
Orders
I will dismiss the motion and order that the non-parties produce all subpoenaed documents in accordance with the subpoenas on or before 4:00 pm on 18 June. The applicant's solicitors will have leave to copy the documents. I will hear counsel in relation to appropriate orders as to confidentiality.
I certify that this and the preceding eight pages are a true copy of the reasons for judgment of the Honourable Justice Sundberg
........ ........ ........ ........ ........ ........ ........ ........ ..
Associate
13 June 1997
Counsel for the Applicants
on the motion: J E Middleton QC and S Horgan
Solicitors for the Applicants: Freehill Hollingdale & Page
Counsel for the Respondents
on the motion: D Catterns QC and A J Maryniak
Solicitors for the Respondent: Malleson Stephen Jaques
Date of Hearing: 5 June 1997
Place of Hearing: Melbourne
Date of Judgment: 13 June 1997
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