Date: 20011214
Docket: T-2520-93
Neutral citation: 2001 FCT 1384
BETWEEN:
RICHTER GEDEON VEGYESZETI GYAR RT
Plaintiff
- and -
APOTEX INC.
Defendant
REASONS FOR ORDER
(Delivered from the Bench at Toronto
on Thursday, December 13, 2001)
HUGESSEN J.
[1] This is a motion for summary judgment brought by the plaintiff in which it seeks to have dismissed certain allegations in the statement of defence in which it is asserted that the parties settled this litigation in Budapest during a late night session on the evening of January 21-22, 2000.
[2] Because I have no doubt whatsoever that the question of whether or not the action was settled at that time raises a genuine issue for trial, which cannot properly be decided on a motion such as this, I shall say as little as possible about the evidence that is being produced on this motion because, of course, the same or similar evidence and the same or similar witnesses will have to be heard at the trial of the issue which has been ordered. That is especially the case because only the plaintiff has moved for summary judgment at this stage and it would be wrong and highly improper for me to even suggest that the evidence shows that there was in fact a binding settlement agreement concluded between the parties. The motion I have before me could only succeed if I were satisfied that it is clear beyond argument that there was not such an agreement. I cannot so conclude.
[3] The plaintiff' s counsel takes three principle points: first, he says that it was common ground that whatever was concluded in Budapest had to be approved by the defendant's principal, Dr. Sherman, and that no such approval was ever formally communicated to the plaintiff.
[4] Second, he says that in the draft document that came out of that Budapest session, there were important blanks in schedules 1 and 2 to the draft agreement and that those were essential elements of the deal that was to be reached.
[5] Finally, he says that in February 2000, the following month, the parties agreed to set aside whatever had been concluded between them in January and to go back, so to speak, to square one.
[6] On the first two points, the evidence is contradictory. While it is clear that no formal notice was ever given by defendant to plaintiff of Dr. Sherman's approval of the draft agreement, there is evidence both by affidavit and in the correspondence from which it would be possible to draw the inference that such approval was given and that that approval was communicated to the plaintiff. The drawing of such inferences is not something which should normally be done on summary judgment and on a question as critical as this one, I would decline to do so.
[7] Likewise, on the matter of the schedules, there is evidence from which it could be concluded, contrary to the plaintiff's contentions, that the completion of those schedules was simply a mechanical or an administrative function of collating and collecting figures from data which was already common to the parties and that therefore there was nothing of the essence of the agreement in the preparation of those schedules. Again, for the reasons stated, I could not make a finding one way or the other on this question and I decline to do so.
[8] Furthermore, as regards both these first two points, plaintiff has not satisfactorily explained the contents of its solicitor's letters of February 4 and 7, 2000 in which it is asserted by the solicitor in the name of the plaintiff that there is a binding settlement and a threat is made to apply to this Court for an order to enforce that settlement. Those statements, in his letters, are at clear variance with the statements made by the solicitor in his affidavit and on cross-examination that there was never a binding settlement agreement concluded.
[9] As to the third point, I am simply unable, in the light of the whole of the evidence, both affidavit and documentary, to conclude that I can be sure that the parties abandoned whatever agreement they might have reached in the month of January as has been suggested. Similarly, on the plaintiff's subsidiary arguments, I am not satisfied that there is any proper evidence that the defendant has repudiated any alleged settlement agreement nor yet that the defendant's conduct is such as to have estopped it from raising the question of settlement. That is especially the case with regard to the suggestion that the defendant by continuing with its appeal somehow abandoned its settlement agreement, if there was such an agreement. The reason the defendant continued with its appeal is, at least arguably, attributable to the plaintiff itself who was the first to assert that the litigation should continue unabated until such time as the formal documents evidencing settlement have been signed and exchanged.
[10] What I have said is enough to dispose of this motion. However, there is another and completely independent ground upon which I would place my judgment. It is this. It is trite law that on a motion of this kind, a party must put its best foot forward. Plaintiff here has produced only one affidavit, the affidavit of its own solicitor. There were other people representing plaintiff at these critical negotiations which took place in Budapest over a period of several days leading up to the evening of January 21-22, 2000. In particular, there were two other solicitors and a person who was apparently a corporate officer of the plaintiff. All of them were available, none of them gave affidavit evidence. Clearly, the question of what took place at that meeting is a critical question on the defendant's allegation, which the plaintiff now seeks to strike out, that a settlement agreement was reached.
[11] The failure to put in all the evidence which it had at its disposal and which was clearly relevant and important can only lead to my drawing an adverse inference that that evidence would not have been helpful to the plaintiff. That is particularly the case in the peculiar circumstances of this case. The solicitor who did depose, astonishingly enough, refused on the grounds of privilege to answer questions which were directed to statements made by himself in letters addressed to the opposite side, letters which were not written without prejudice. That is an astonishing claim of privilege, it is clearly unjustified and what is more, it can only lead to me drawing adverse inferences. On that ground alone, I would dismiss the motion.
(Later)
[12] I have now heard both counsel on the question of costs. Counsel for the defendant asked that I should award costs on a solicitor and client basis and I am incline to agree that this is a motion which should never have been brought. It really was, I think, from the outset, quite clear that there is a serious issue for trial here and I am therefore going to make a substantial costs order.
[13] I mitigate the order I might otherwise have made for only one reason, namely that while a great deal of time has been spent on this motion, I do not think it has all been wasted time. I think it is time which may in fact prove useful to the parties, not only if the case goes forward for the trial of the issue which has been ordered, because in fact both sides had now had a very good look at each other's evidence on that trial but also, I think, it may be useful to the parties in what I would hope they would now undertake, namely the pursuit of further settlement negotiations. Whatever else did or did not happened in Budapest on January 21-22, 2000, it is clear that if they did not settle, they came very very close to settlement. They have now spent a great deal more money and got nowhere and the prospect of now moving forward to first the trial of an issue and then, heaven help them, if that does not put an end to the litigation, to the trial of the action itself, which involves, as well as the principal action, a counter-claim in the usual terms associated with intellectual property litigation, the parties are looking at a very long period of time and a great deal of money and I question whether it is worth their while continuing in the circumstances. I understand that perhaps, because of what has happened, relationships between the solicitors who initially were acting for each party may be somewhat strained but since each party as of necessity had to retain extremely experienced counsel for the purposes of moving forward with the trial of the issue, perhaps those counsel might be able to bang their own and their clients' heads together and move this matter to a more satisfactory resolution. I would only remind them both that the Court is, of course, at their disposal and we do and are proud of the fact that we run a dispute resolution service out of the Court and that if counsel wish to have a little help, I would be happy to be of assistance if they think that that would help.
[14] Having said all that, I have concluded that the appropriate award of costs should be the sum of $20,000 payable forthwith and in any event of the cause. As I say, that is, in my view, less than a solicitor and client award but it is a substantial award which is justified by the circumstances.
Judge
Ottawa, Ontario
December 14, 2001
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