Norwich Pharmacal Co v Customs and Excise Commissioners

Factual and Procedural Background

Company A, the proprietor and licensee of a United Kingdom patent for the chemical compound “furazolidone,” discovered that unidentified persons had imported the compound into The State in alleged infringement of that patent. Because Company A could not ascertain the identities of the importers, it began proceedings solely to obtain that information from the Government Agency responsible for customs control. Both the High Court and the Court of Appeal refused discovery, treating the Agency as a “mere witness.” Company A petitioned the House of Lords for leave to appeal; the Appeal Committee granted leave, and the present judgment disposes of the substantive appeal.

Legal Issues Presented

1. Whether a third party who is not alleged to be an infringer, but who is “mixed up” in the commission of a tort by virtue of having control or oversight of the goods, owes an equitable duty to disclose the names of the wrongdoers.
2. Whether the long-standing “mere witness” rule bars such discovery when the applicant seeks only the identity of potential defendants and not documentary evidence.
3. Whether statutory provisions, in particular section 3 of the Finance Act 1967 and the Customs and Excise Act 1952, prevent or qualify the court’s power to order the Government Agency to divulge the requested information.
4. How the court should balance the public interest in maintaining the confidentiality of information gathered under statutory compulsion against the public interest in the administration of justice.

Arguments of the Parties

Appellants’ Arguments (Company A)

• The equitable jurisdiction historically allowed a “bill for discovery” against a third party who, though not a defendant to the substantive claim, was involved in the wrongdoing or possessed information essential for the enforcement of rights (Orr v. Diaper and related authorities).
• Because the Government Agency exercised substantial control over imported goods when they were under “customs charge,” it was “mixed up” in the importation process and therefore obliged to identify the importers.
• The “mere witness” rule was never absolute; it contains exceptions where justice would otherwise be denied, especially when only the names of tortfeasors are sought.
• No statutory provision expressly prohibits disclosure to the court; section 3 of the Finance Act 1967 is permissive, not prohibitive, and must be read subject to the superior public interest in the administration of justice (Conway v. Rimmer).
• Equity will not protect “guilty secrets”; any confidentiality attaching to import documentation cannot outweigh the need to remedy a patent infringement.

Respondents’ Arguments (Government Agency)

• Discovery is an auxiliary equitable remedy available only against parties to existing or contemplated proceedings; the Agency is neither an alleged infringer nor a proper defendant.
• The recognised exceptions to the “mere witness” rule apply only to officers of corporations, certain agents, and persons against whom a decree could be made; none fits the Agency’s position.
• Orr v. Diaper is distinguishable or wrongly decided; it concerned an admitted wrongdoer and does not create a broader principle.
• The Agency’s statutory powers exist solely to collect revenue. They do not amount to the “control” necessary to found an equitable duty and cannot lawfully be used for collateral purposes.
• Section 3 of the Finance Act 1967 and similar provisions create at least an implied statutory bar to disclosing names and prices, reflecting a strong public policy of confidentiality for information obtained under compulsion.
• Expanding discovery would impose unfair burdens on innocent custodians of information and encourage speculative litigation.

Table of Precedents Cited

Court's Reasoning and Analysis

The House of Lords held that the equitable jurisdiction to grant discovery is not confined to parties to the contemplated litigation. Historically, courts of equity compelled third parties to disclose information when they were “mixed up” in the tortious conduct, even if innocent of infringement. The Government Agency exercised statutory control over goods under “customs charge,” a degree of involvement sufficient to bring it within that category. The traditional “mere witness” rule therefore did not apply.

The court determined that no express statutory bar prevented disclosure. Section 3 of the Finance Act 1967 was permissive and did not override the paramount public interest in the administration of justice. Any implied confidentiality attaching to import declarations must yield where a patent holder would otherwise be deprived of a remedy. The request was narrowly tailored—the appellants sought only the names of importers, not commercial documents—so the order satisfied the principle of “judicial parsimony.”

Consequently, the equitable duty recognised in Orr v. Diaper and reinforced by Upmann v. Elkan entitled Company A to the limited discovery sought. The Court of Appeal had erred in treating the Agency solely as a witness and in overlooking the protective jurisdiction of equity.

Holding and Implications

APPEAL ALLOWED; the Government Agency must disclose to Company A the identities of the importers of furazolidone. Costs of the appeal were awarded to Company A, and leave to appeal was refused to the Agency.

Implications: The decision affirms that where a third party is innocently involved in the commission of a tort—here by exercising statutory control over infringing goods—the court may compel disclosure of the wrongdoers’ identities. The ruling clarifies the limits of the “mere witness” rule and establishes that statutory confidentiality will yield, absent express prohibition, when necessary to ensure justice. While the judgment does not create a broad, unfettered right to pre-action discovery, it provides patentees and other victims of wrongdoing with a potent remedy against intermediaries who hold essential identifying information.