Date: 20011206
Docket: T-1168-01
Neutral Citation: 2001 FCT 1375
BETWEEN:
APOTEX INC.
Plaintiff
and
SYNTEX PHARMACEUTICALS INTERNATIONAL LIMITED and
HOFFMANN-LaROCHE LIMITED
Defendants
REASONS FOR ORDER AND ORDER
BLAIS J.
[1] This is a motion for an order to set aside the order of the Prothonotary dated October 17, 2001.
RELEVANT FACTS
[2] This proceeding was commenced by a statement of claim dated July 6, 2001 seeking inter alia damages pursuant to section 8 of the Patented Medicines (Notice of Compliance) Regulations ("Patent Regulations") in respect of Apotex' lost sales of naproxen controlled release tablets.
[3] By notice of motion dated August 1, 2001, the defendants brought a motion to strike this proceeding pursuant to Rule 221 of the Federal Court Rules.
[4] By order dated October 17, 2001, the Prothonotary allowed the defendants' motion and thereby struck the within action having concluded that it was "plain and obvious" that the prohibition proceeding was not pending and, in any event, that the pre-amended version of section 8 of the Patent Regulations did not apply.
STANDARD OF REVIEW
[5] The Federal Court of Appeal has established in Canada v. Aqua-Gem Investments Ltd., [1993] 2 C.F. 425 at pages 462-63, that the standard of review to be applied by a motion judge to a discretionary decision of a prothonotary:
I also agree with the Chief Justice in part as to the standard of review to be applied by a motions judge to a discretionary decision of a prothonotary. Following in particular Lord Wright in Evans v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and Lacourcière J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d) 436 (Div. Ct.), discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless:
(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or
(b) they raise questions vital to the final issue of the case.15
[...]
15. It should be noted that Lord Wright's phrase "the final issue of the case" is quite different from "the final issue in the case." Lord Wright means "vital to the result of the case" rather than "vital to the ultimate issue on the merits of the case."
[6] At page 4 of his decision, the Prothonotary repeated his findings in a similar motion heard the same day in Apotex v. Eli Lilly and Company et al. (T-320-01), September 27, 2001):
I conclude that it is plain and obvious that the Plaintiff cannot succeed in regard to the proposed amendment. To begin with, no material facts have been pleaded which would support a cause of action under the former section 8 of the Regulations. The Plaintiff does not allege that it has suffered harm by reason of the delay of the Minister in issuing a notice of compliance "beyond the expiration of all patents". Rather, paragraph 18 of the proposed amended pleading simply asserts that the statutory relief is available "by reason of any delay in the issuance of an NOC cause by the commencement of an application for prohibition". This is a clear mis-characterization of the section.
In my view there is no ambiguity as to when liability for damages may be imposed under former section 8 of the Regulations. I fully adopt the observations of Mahoney, J. in Bayer AG v. Canada (Minister of National Health and Welfare) (1993), 51 C.P.R. (3d) 329 at 337 in which he identifies restrictions to the availability of relief under that section:
In particular, no liability as to damages arises from the application as would be imposed by the undertaking any court would require before making an interlocutory injunction. The liability for damages created by s. 8 of the Regulations pertains only to those incurred as a result of the NOC not issuing until after the patent has expired.
In light of the above findings, I need not deal with the alternative argument by the Defendant Roche that the "application" was not dismissed "by the Court hearing the application".
[7] I have to mention that in Apotex v. Eli Lilly and Company and Eli Lilly Canada Inc., 2001 FCT 1144, ("Apotex"), I rendered a decision thereby reversing the decision of the Prothonotary.
[8] Similarly to my decision rendered in Apotex, supra, I have no hesitation in concluding that the interpretation of section 8 of the Patent Regulations is a question vital to the final issue of this case and this Court must intervene and exercise its discretion de novo.
[9] Nevertheless, I should distinguish my decision in Apotex, supra from this particular case; in fact, in Apotex, supra, Apotex had raised the point that if by reason of subsection 9(6) of the transition provisions that accompanied amendments to section 8 of the Patent Regulations which says:
Section 8 of the Regulations, as enacted by section 8, applies to an application pending on the coming into force of these Regulations.
Section 8 of the Patent Regulations as amended does not apply, then section 8 of the Patent Regulations as it existed prior to the 1998 amendments will apply.
[10] Apotex has already raised this point on this motion but not in its statement of claim.
[11] Nevertheless, Mr. Justice Blanchard has rendered a decision in Apotex Inc. v. Eli Lilly and Company and Eli Lilly Canada Inc., 2001 FCT 636, ("Eli Lilly"), in respect to a very similar argument that is raised in this case.
[12] The Prothonotary decided not to follow the decision of Mr. Justice Blanchard and relied only upon paragraphs 25-49 of the written submissions by the defendants.
[13] In his decision dated June 11, 2001, Justice Blanchard held that:
[para 11] I accept the plaintiff's position that the power of the Court to strike pleadings must be exercised with great care and only in cases where the plaintiff could not possibly succeed. Thus, the Court should only strike pleadings in the clearest of circumstances, where there is no arguable basis for including the matters to which objection has been taken.
[para 12] In reviewing the statement of claim, and applying the criterion established by the Supreme Court of Canada, I am not convinced that it is "plain and obvious" that the impugned pleadings fail to disclose a reasonable cause of action.
[para 13] The moving party in this instance has chosen to ask this court to engage in a rather complex exercise of statutory interpretation, which it contends will lead to a conclusion that would justify the "draconian measure" of striking the plaintiff's statement of claim. I am of the view that the interpretation of section 8 and the determination of its objects is a complex matter of statutory interpretation and is better left for argument at trial where proper evidence may be adduced and should not be disposed of by a motions judge in a preliminary proceeding.
[para 14] The jurisprudence appears to be settled, that contentious legal issues of statutory interpretation will not be dealt with on motion to strike a pleading. Mr. Justice Lemieux in Pfizer Canada Inc. v. Apotex Inc. addressed the issue:2
In the context of issues relating to statutory interpretation, Reed J. in Amway of Canada Ltd. v. Canada, [1986] 2 F.C. 312 (T.D.) at 326, was of the view that where there exists a contentious legal issue of a statutory interpretation to be resolved, that issue, not being clear and obvious, should be left for argument at trial and should not be disposed of by a motions judge in a preliminary proceeding.
In Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, Wilson J., for the Court, canvassed the applicable principles governing the determination of a motion to strike on the basis of no reasonable claim. She canvassed the origins of the provision now incorporated in rules of practice and considered its application in English and Canadian jurisprudence.
As I see it, Wilson J. endorsed the principle where arguments as to law and fact are intricate and complex, they should be dealt with a trial after all of the evidence is adduced because in such circumstances it is impossible to reach the conclusion that there is no cause of action in fact or law.
Footnote omitted.
[14] In Merck Frost Canada Inc. v. Canada (1994), 55 C.P.R. (3rd) 302 at 316 (F.C.A.) Hugessen J. held:
Section 8 is particularly obscure in its meaning. It appears to create a liability in the first person in the event that the Minister should comply with the 30 month prohibition in circumstances where s. 7(2) specifically provides that the prohibition shall have ceased to apply. Fortunately, we are not required to interpret it on this appeal. [emphasis added]
[15] Both the decision rendered by Justice Blanchard in Eli Lilly, supra and my own decision rendered in Apotex, supra can be distinguished from the present case. Nevertheless, one question still remains: There is not yet a clear understanding of what section 8 of the Patent Regulations really means.
[16] In my view, it would have been more prudent for the Prothonotary to follow the guidance of Mr. Justice Blanchard in his decision:
[para 18] ...the contentious issues are of a complex nature better suited for determination at trial...
[17] Therefore, I am of the view that the order of the Prothonotary dated October 17, 2001 should be overturned.
O R D E R
THIS COURT ORDERS THAT:
- The order of the Prothonotary dated October 17, 2001 be set aside;
- The defendants should be allowed twenty days from this decision to file and serve their statement of defence;
- With costs in favour of the plaintiff.
Pierre Blais
Judge
OTTAWA, ONTARIO
December 6, 2001
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