Smith Kline & French Laboratories Ltd v Inter-Continental Pharmaceuticals - [1969] HCA 34 - HCA 1969 case summary — Zoe

CTHHCA

Smith Kline & French Laboratories Ltd v Inter-Continental Pharmaceuticals

[1969] HCA 34

High Court of Australia|1969-07-01|Before: Owen JJ, McTiernan J, Kitto J

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At a glance

Source facts

Court

High Court of Australia

Decision date

1969-07-01

Before

Owen JJ, McTiernan J, Kitto J

Source

Original judgment source is linked above.

Judgment (37 paragraphs)

[1]

High Court of Australia McTiernan, Menzies, Windeyer and Owen JJ. Smith Kline & French Laboratories Ltd v Inter-Continental Pharmaceuticals (Australia) Pty Ltd [1969] HCA 34

[2]

The questions in this appeal are whether in an action pending in this Court the appellants ought to have been given leave pursuant to O. 32, r. 2, of the High Court Rules to deliver interrogatories to the first-named respondent, and if the appellants had been given such leave, whether they ought to have been allowed by order pursuant to r. 4 (2) to deliver the interrogatories to be answered by a director of the first-named respondent specified by the appellants. Leave of the court or a justice had to be sought to deliver the interrogatories because the appellants had beforehand delivered interrogatories to the same respondent, as of right, pursuant to r. 1 (1). In the case of those interrogatories there was no leave sought to deliver them to be answered by a specified officer, agent or servant of the first-named respondent. They were answered by the affidavit of Aitan Ian Tobias. He is described as general manager and director of that company. But in the case of the interrogatories which the appellants have now sought leave to deliver, they applied for an order under r. 4 (2) that they be allowed to deliver the interrogatories to be answered by Zygmunt Sieczko of London. He is described in the application as an officer of the same company.

[21]

That case is the accepted authority for the proposition that an officer of a company answering interrogatories administered to the company is only bound to answer as to his own knowledge, gained in the course of his duties with the company; or from inquiries made by him of other officers and agents of the company with regard to their knowledge gained in the course of their employment, as distinct from knowledge acquired in some other capacity. These distinctions are not I think easy to make in the case of a director of a company who is also a director or servant of subsidiary or associated companies having business dealings with the company of which he is a director. Very many commercial and business enterprises are today carried on by complexes of companies - some of them wholly-owned subsidiaries of others, with interlocking and overlapping directorates - forming a single organization. If a director of one company in such an organization has some knowledge concerning that company's business, he is, by virtue of his fiduciary position, bound to use it for the benefit of the company whose affairs he directs - or so it seems to me. I think that, in answering interrogatories on behalf of his company, he should answer according to any knowledge that he has of its affairs, however he gained it, if it were knowledge which he would be bound to use in the discharge of his duties as a director. It is not only what a director learns in the board room, but what knowledge he brings there and must use there that counts. He may have been appointed a director simply because of his knowledge of the activities of the company. It would be different if his knowledge were of some matter which it would be outside his duty as a director to divulge to the company, as for example knowledge gained confidentially in his capacity as an officer or servant of some other, and dissociated, company maybe a rival in business (see Lord Blanesburgh's remarks in Bell v. Lever Bros. Ltd. [1] ) but that position is not likely to arise in the case of associated companies forming one business organization.

[26]

But it is said, you are always entitled to interrogate the person who knows about the matters in question. Within proper limits, that is no doubt the right principle. If, for instance, you are inquiring into the details of a manufacturing process, it would be idle to say you should go to the secretary of a company who probably would not know one process from another in the manufactory, when there may be an important officer or manager of the manufactory who could give you reasonable and plain answers. But in the present case it is not alleged that the defendants are infringing the plaintiffs' patents by themselves using the patented processes in Australia. What is said is that they are infringing by selling and offering for sale in Australia goods made elsewhere by the patented process. There is no evidence that Sieczko, of his own direct knowledge, knows anything more about the details of the processes of manufacture of the alleged infringing articles than does Tobias. For all that appears, each of them could only speak from inquiries made and information obtained from places overseas: and Tobias could, I assume, have sought information from Sieczko if in order to answer he had thought it would be helpful to him to do so. There is no evidence that, in relation to the manufacturing processes, Sieczko has any special qualifications to answer. It is not even shewn, I think, that he is an office bearer in any company engaged in the actual manufacture of chemical substances said to have been produced by the patented processes. He is no doubt closely concerned in an extensive drug-marketing organization, which has been called the Inter-Continental Pharmaceutical Group. The appellant thinks it relevant that he was described by Harman L.J. in the Court of Appeal as "the moving spirit behind what we may call the Inter-Continental Pharmaceutical Group": Hoffman-La Roche & Co. A. G. v. Sieczko [1] . And on the hearing of the present appeal he was several times described by counsel for the appellant as "the mind and nerve centre" of the first-named defendant. But a miscellany of incompatible metaphors does not supply the deficiency of evidence which would warrant the order which was sought. Certainly O. 32, r. 2, enables a justice to give leave for more than one set of interrogatories to be delivered. But some reason for departing from the general rule must be shewn; Goding v. Queensland Newspapers Pty. Ltd. [2] . In my opinion it does not appear in this case that, in the interests of justice and for the proper trial of the action, a set of interrogatories should be delivered, directed to be answered by Sieczko. I would dismiss the appeal. 1. (1911) 13 C.L.R. 101. 2. [1900] 2 Ch., at pp. 12-13. 3. [1968] R.P.C. 460, at p. 466. 4. (1965) 113 C.L.R. 170. Owen J.

[35]

The plaintiffs then took out a summons, which was heard by Kitto J., seeking orders that the plaintiffs be at liberty to deliver a second set of interrogatories to the defendant and that these should be answered by one Zygmunt Sieczko who, amongst his many other activities, was a director of the defendant. No copy of the new set of interrogatories proposed to be asked is before us and neither counsel was able to tell us what were their terms but it seems plain enough from the reasons given by Kitto J. for refusing to grant the application that they covered the matters dealt with in the interrogatories already answered by Mr. Tobias, with one new question which, his Honour said, asked what was the process used to produce the nitrofurantoin used in the tablets which the defendant was importing and selling or proposing to sell in Australia. As I have said earlier, the defendant had, in its earlier correspondence with a subsidiary of the first-named plaintiff, in answer to a question asking to be informed of the patents relating to the processes used in the production of the nitrofurantoin contained in the tablets imported by the defendant, stated that it had been informed by its suppliers that the nitrofurantoin in its tablets was manufactured by a process "patented in the United Kingdom under patent No. 991,644". Although this question had not been asked in the interrogatories served and had therefore not been answered, counsel for the defendant during the hearing before Kitto J. offered to have this statement sworn to by Mr. Tobias and, at all times since, this offer has remained open but has not been accepted by the plaintiffs. Kitto J. formed the opinion, with which I agree, that the real purpose of the application was to have this question and the answers to the new set of interrogatories sought to be administered verified by the oath of Mr. Sieczko. The evidence shows that, while this gentleman is a director of the defendant, he is also associated with an interrelated group of other companies carrying on business in various parts of the world outside Australia, some of which were named in Mr. Tobias' affidavit in answer to the interrogatories and which appear to be concerned with the manufacture and disposal of chemical products. It is no doubt because of this fact that the plaintiffs now seek an order that Sieczko be ordered to answer the new set of interrogatories which they wish to administer and have them answered by Sieczko who, they suspect, may know more than does Mr. Tobias about the processes used in the manufacture of the nitrofurantoin which is contained in the tablets distributed by the defendant in Australia.