Date: 20090924
Docket: T-1359-08
Citation: 2009 FC 965
Ottawa, Ontario, September 24,
2009
PRESENT: The Honourable Mr. Justice Martineau
BETWEEN:
SANOFI-AVENTIS
CANADA INC.
Applicant
and
ATTORNEY GENERAL
OF CANADA
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1]
The
Patented Medicine Prices Review Board (the Board) ensures that
the prices of patented medicines charged by patentees are not excessive. The
Board operates pursuant to the Patent Act, R.S.C. 1985, c. P-4 (the
Act), and particularly, sections 79, 83, 86, 89 and 91, which govern
proceedings and provide for the remedial powers of the Board.
[2]
The
applicant Sanofi-Aventis Canada Inc. is the successor company to
Hoechst Marion Roussel Canada Inc. (HMRC), and in that capacity, seeks judicial
review of an interlocutory decision rendered by the Board on July 30, 2008, in
which the Panel of the Board constituted to hear the matter dismissed the
request of the applicant, who had made joint submissions with the Board Staff,
that further Board proceedings against HMRC regarding the pricing of the
medicine Nicoderm be terminated (the impugned decision). The applicant asks that
the impugned decision be set aside and that the Board be prohibited from
conducting a hearing on allegations of excessive pricing by HMRC.
[3]
The
Attorney General of Canada, who is named as the respondent, opposes the
application for judicial review.
[4]
The issues
raised in this application can be stated as follows:
1.
Should
this application be dismissed given that it calls for the review of an
interlocutory decision?
2.
Did the
Board have jurisdiction to continue the proceedings?
3.
Did the
Board breach principles of procedural fairness in rendering the impugned
decision?
4.
Is the Board’s
decision to continue the proceedings otherwise unreasonable?
[5]
The
application should be dismissed. At best, it is premature. Having had the
benefit of hearing full arguments from counsel, I also find that the Board had jurisdiction
to continue the proceedings, that it did not breach principles of procedural
fairness and that the impugned decision is otherwise reasonable.
I. Background
[6]
This is not the first judicial review brought before this
Court in respect of HMRC’s objections to the Board’s jurisdiction to hear and decide
this matter.
[7]
HRMC is the exclusive distributor in Canada of Nicoderm, an
aid to smoking cessation. Nicoderm is a transdermal nicotine patch. HMRC began
selling Nicoderm in May 1992. Between 1994 and 2001, HMRC enjoyed the
benefit, in Canada, of various patents belonging to Alza Corporation (Alza) of
the United States, including Canadian Patent No. 1331340 (the ‘340 patent),
Canadian Patent No. 1333689 (the ‘689 patent) and Canadian Patent No. 1338700
(the ‘700 patent). Alza has also applied for patents which pertain to
nicotine patches; among these are Canadian Patent Application No. 2,032,446
(the ‘446 application) and Canadian Patent Application No. 2,040,352 (the ‘352
application).
[8]
On
March 9, 1999, HMRC submitted a Voluntary Compliance Understanding (VCU) for
consideration by the Chairperson of the Board. Nonetheless, the Chairperson
determined that a hearing should be held in the public interest.
[9]
On April 20, 1999, the Board issued a Notice of Hearing to
determine whether the applicant “is selling or has, while a patentee, sold the
medicine known as Nicoderm in any market in Canada at a price that, in the
Board’s opinion, is or was excessive and if so, what order, if any should be
made”.
[10]
The hearing was scheduled to commence on July 5, 1999, but
in the meantime HMRC bought a motion before the Board on May 25, 1999,
objecting to their jurisdiction on various grounds, including:
1. The
structure and conduct of the Board, which HMRC claimed breached the principles
of procedural fairness and created a reasonable apprehension of bias;
2. The nature
of Nicoderm as a delivery device and not a medicine;
3. The
fact that HMRC was not a patentee in respect of the ‘340 patent and
the ‘689 patent;
4. The lack of
the Board’s jurisdiction over patent applications.
[11]
On May 27, 1999, the Board Staff itself motioned the Board for
production and to compel disclosure from HMRC.
[12]
The Board Staff’s motion was granted on August 3, 1999. The
same day, the Board rendered its decision concerning the first part of HMRC’s
motion and dismissed HMRC’s allegations of institutional bias and breach of the
rules of procedural fairness (issue 1 above). The Board’s decision in respect of jurisdiction,
Part I, was the subject of cause number T-1576-99. Indeed, on September 2, 1999,
HMRC commenced an application for judicial review before the Federal Court. By
agreement, further proceedings on the issue of excess pricing were suspended
pending the outcome of HMRC’s motion in respect of jurisdiction, Part II,
before the Board (issues 2 to 4 above).
[13]
This second part of HMRC’s motion was heard before the
Board from December 17‑19, 1999. On March 13, 2000, the Board
issued an interim order requesting additional information from the parties, and
on August 8, 2000, the Board denied the second part of HMRC’s motion. The Board
dismissed HMRC’s argument that Nicoderm is not a medicine, concluded that the ‘700,
‘689 and ‘340 patents all pertain to Nicoderm and found that HMRC was a
“patentee” for the purposes of the ‘700 and ‘689 patents but not the ‘340
patent. The Board also determined that HMRC was the “patentee” with respect to
the ‘352 and ‘446 patent. This second interlocutory decision dated August 8, 2000, was the
subject of cause number T‑1671-00.
Indeed, on September 8, 2000, HMRC filed a second application for judicial
review before the Federal Court.
[14]
Several
motions on matters of procedure in files T-1576-99 and T-1671-00 were made by HMRC
and the Board.
[15]
On October 25, 2000, the Board Staff made a motion to the
Federal Court to be made a party to the judicial review. Around the same time,
the Board filed a motion seeking intervener status. These motions were heard
together by a Prothonotary of the Federal Court on March 13, 2001 and
they were rejected on July 13, 2001 (Hoechst Marion Roussel Canada v. Canada
(Attorney General), 2001 FCT 795). Both rejections were appealed to the
Federal Court (Canada (Patented Medicine Prices Review Board) v. Hoechst
Marion Roussel Canada Inc. (11 February 2002), Ottawa T-1576-99
(F.C.)), and subsequently to the Federal Court of Appeal (Canada
(Patented Medicine Prices Review Board) v. Hoechst Marion Roussel Canada Inc.,
2002 FCA 505), where they were denied.
[16]
After the Board and Board Staff’s motions to be made
parties in the judicial review were dismissed, HMRC brought to the Court
another motion to compel the production of documents in possession of the Board
that were said to be relevant to the judicial review, including the Board Staff
report concerning excessive pricing that was submitted to the Chairperson prior
to the issuance of the Notice of Hearing. On November 14, 2003, this motion was
rejected by the Prothonotary (Hoechst Marion Roussel Canada v.
Canada (Attorney General), 2003 FC 1343), as was the appeal which
ensued (Hoechst Marion Roussel Canada v. Canada
(Attorney General), 2004 FC 489).
[17]
On May 16, 2005, HMRC’s judicial review applications were finally
heard by the Court. On November 17, 2005, Justice Heneghan dismissed the application
for judicial review with respect to Part I of the Board’s decision on
jurisdiction, and allowed in part the application for judicial review with
respect to Part II of the Board’s decision (Hoechst Marion Roussel Canada
Inc. v. Canada (Attorney General),
2005 FC 1552).
[18]
In summary, the Court held that the Board had jurisdiction over
Nicoderm as a “medicine” and dismissed the allegations of institutional bias
and breaches of procedural fairness. As to predetermination of issues, the
Board’s decision to issue a Notice of Hearing did not represent the Board’s
conclusion on the issue of excessive pricing, but rather constituted an
allegation that was sufficiently substantiated to justify a hearing on the
merits. The Court also found that HMRC was the “patentee” of the ‘700 and ‘689
patents within the meaning of section 79 of the Act. However, the Court found
that the Board erred in finding that it was authorized to assert jurisdiction
over the two laid-open patent applications, which are the ‘446 and ‘352 applications.
Accordingly, that part of the Board’s decision in relation to jurisdiction,
Part II, was quashed by the Court. The rest of the judicial review application
was otherwise dismissed.
[19]
HMRC took
no appeal of the judicial review in respect of the objections to the Board’s
jurisdiction.
[20]
As a result of the 2005 Federal Court judgment above, the
amount of excess revenues charged against HMRC was decreased to about 20% of
the amount previously calculated by Board Staff in 1999.
[21]
Between January and February 2006, HMRC was in direct
communication with the Board Staff concerning the pricing of Nicoderm. On March
11, 2006 the Board Staff confirmed that it considered it appropriate to
terminate proceedings before the Board on the basis of a proposed Joint Submission
by the Board Staff and HMRC.
[22]
On August 28, 2006, the Joint Submission was filed with the
Board. After some correspondence between the Board and the Board Staff in March
and April 2007, the Panel of the Board constituted to hear the matter ordered
an oral hearing which took place on July 3, 2008.
[23]
On July 21, 2008 the Panel rejected the Joint Submission
and instructed the parties to continue with the proceeding according to a
revised schedule. It is this latest decision which brings HMRC back before this
Court through its successor company, Sanofi-Aventis Canada Inc.
II.
Should
this application be dismissed given that it calls for the review of an
interlocutory decision?
[24]
In the
impugned decision, which is clearly interlocutory in nature, the Board found:
[…]
2. The Panel is not persuaded that the
resolution proposed in the Joint Submission is appropriate.
3. A central premise of the Joint
Submission is that sales of Nicoderm below its maximum non-excessive price
(MNE) during the period from and after 1998 should be deemed to off-set
excessive revenues alleged to have been earned from 1995, when the Board
acquired jurisdiction over the pricing of Nicoderm, until 1997.
4. The Panel is not satisfied that this
premise is consistent with the Guidelines, which appear to contemplate the
off-setting of excessive revenues only by compliance with a Board order or
voluntary compliance undertaking […]
[…]
6. The Panel finds support for this
conclusion in the recent decision of a differently constituted panel in the
proceeding pertaining to the medicine Copaxone.
[…]
8. The panel [in that case] issued a
decision on this point, in which it said:
The Guidelines do not permit a patentee
to charge excessive revenues in one or several years and then offset those
revenues of its own accord by reducing (or not increasing) the price of the
medicine in subsequent years. Indeed, such an approach would seriously impair,
if not defeat, the Board’s mandate… The Panel considers these terms in the
Guidelines to be an appropriate implementation of the terms of the Act, and
that the Order is reflective of this.
[…]
10. The parties provided various other
reasons why it would not be in the public interest to continue this proceeding,
mostly related to the passage of time and the intervening events. The Panel is
not persuaded that any of these reasons, or all of them taken together, warrant
discontinuance of the proceeding.
[25]
In
considering whether or not to review an interlocutory decision, the Court must
consider the presence of “special circumstances”. In Sztern v. Canada (Superintendent of
Bankruptcy),
2008 FC 285 at paragraph 19, I noted that:
The starting point of my analysis, per Szczecka,
is that unless there are special circumstances
there should not be an immediate judicial review of an interlocutory judgment. As
I found in MiningWatch Canada v. Canada (Minister of
Fisheries and Oceans), 2007 FC 955, [2007] F.C.J. No. 1249 (QL) at
paragraph 148: "The rationale for this is that applications for judicial
review of an interlocutory ruling may ultimately be totally unnecessary: a
complaining party may be successful in the end result, making the applications
for judicial review of no value. Also, the unnecessary delays and expenses
associated with such applications can bring the administration of justice into
disrepute.
[26]
This
principle was recently confirmed by the Federal Court of Appeal in Greater
Moncton International Airport Authority v. Public Service Alliance of Canada,
2008 FCA 68, at paragraph 1 (Greater Moncton), where reliance is placed
on recent jurisprudence which suggests that the judicial review of
interlocutory decisions should only be undertaken in “the most exceptional of
circumstances” (Fairmont Hotels Inc. v. Director Corporations Canada,
2007 FC 95, at paragraphs 9-10; Prince Rupert Grain Ltd. v. Grain
Workers’ Union, Local 333, 2005 FCA 401, at paragraph 2; Canada
(Attorney General) v. Brar, 2007 FC 1268, at paragraph 29).
[27]
The fact
that an issue may relate to a tribunal’s jurisdiction, including allegations of
bias and breach of procedural fairness, does not automatically justify
immediate judicial review (Greater Moncton, at paragraph 2; Sanofi
Pasteur Ltd. v. Canada (Attorney General), 2008 FC 286, at paragraph 46
(Sanofi Pasteur); Lorenz v. Air Canada, [2000] 1 F.C. 494,
at paragraphs 12 and 13 (F.C.)). There are several compelling policy reasons
which militate in favour of judicial discretion, including the risk of the
fragmentation of the process as well as the likelihood that such intervention
will lead to additional costs and delays. Indeed, the background to this case
provides ample demonstration that multiple interlocutory judicial review
applications involving so called “jurisdictional matters” result in long and
unnecessary delays which are time consuming and which monopolize limited
judicial resources at all levels. Again, a more basic concern is that such
litigation may become unnecessary in light of the Board’s ultimate decision in
this matter (Greater Moncton, at paragraph 1).
[28]
I do not
believe that this case raises any special circumstances that merit immediate
review by the Court. After considering potential hardship to the applicant,
waste of judicial resources, delay and fragmentation, I do not believe that the
applicant has raised any issue which could not be adequately determined before
the Board. Fundamental to the applicant’s request is a finding of whether or
not the applicant engaged in excessive pricing, a determination best made by
the Board. Considering the fact that the Board’s decision to either accept or
reject the Joint Submission by the applicant and the Board Staff is not in any
way determinative of this issue, the applicant may very well be successful at
the hearing, rendering any litigation before the Federal Court useless.
[29]
In any
event, for the sake of clarity, the following reasons provide additional
rationale for dismissing the present judicial review application which I find
to be clearly unfounded after a close examination of the applicant’s most
recent objections to the continuation of the proceedings before the Board.
III. Did the Board have jurisdiction
to continue the proceedings?
[30]
Both the
applicant and the respondent agree that the standard of review for questions of
jurisdiction is correctness. In the case at bar, the issue is whether the Board
had jurisdiction to continue the proceedings.
[31]
The
applicant alleges that the Board has lost jurisdiction over the matter because
pursuant to subsection 83(7) of the Act, the Board is unable to make an order
against patentees who ceased to benefit from the patents in question more than
three years “before the day on which the proceedings in the matter commenced.”
Furthermore, the applicant alleges that pursuant to section 93 of the Act, the
Board is unable to hear matters when neither the Chairperson nor the
Vice-Chairperson of the Board are members of the hearing panel.
[32]
These are
both primarily questions of statutory interpretation, and at least the first
question deals with a true question of vires. Accordingly, pursuant to Dunsmuir
v. The Queen, 2008 SCC 9, at paragraphs 50 and 59, these questions are to
be reviewed on a standard of correctness.
Is the Board Time-Barred?
[33]
Subsection
83(7) of the Act reads as follows:
|
83. (7) No order may be made under this section in respect of a
former patentee who, more than three years before the day on which the proceedings
in the matter commenced, ceased to be entitled to the benefit of the patent
or to exercise any rights in relation to the patent. (Emphasis added)
|
83. (7) Le présent article ne
permet pas de prendre une ordonnance à l’encontre des anciens brevetés qui,
plus de trois ans avant le début des procédures, ont cessé d’avoir
droit aux avantages du brevet ou d’exercer les droits du titulaire.
(je
souligne)
|
[34]
The applicant, who
ceased to benefit from the patents in question in December 2000, suggests that
the “proceedings in the matter” commence only once the hearing on the merits of
the case has actually commenced before the Panel charged with hearing the
matter, or at very least, once the evidence to be relied upon by the Board
Staff at the hearing is submitted to the Board. Since no steps beyond the
Notice of Hearing issued in 1999 had been taken until 2008, the Board is
legally precluded by subsection 83(7) of the Act from continuing with a
hearing.
[35]
I am
unable to accept the submission made by the applicant which is not consistent
with the wording and purpose of the Act nor with the representations made by
HMRC and the Board Staff in their Joint Submission. There is a clear distinction
between a “hearing” and a “proceeding” (sections 86 and 87 of the Act). Indeed,
the proceedings may commence long before the Board actually receives evidence
at the hearing. I am comforted by the Guidelines at paragraph 8.1 Chapter
2, which provide that a “Chairperson may commence a formal proceeding by issuing a
Notice of Hearing and establishing a Hearing Panel of the Board for that
proceeding.”
[36]
Accordingly,
I find that the proceedings commenced when the applicant was issued a Notice of
Hearing on April 20, 1999, which was before the applicant ceased to benefit
from the patents in question and, therefore, within the time frame set out in
subsection 83(7) of the Act.
Is the Panel Improperly Constituted?
[37]
Since the
Notice of Hearing was filed in 1999, three members on the original panel set to
hear the case have retired, including the Chairperson and Vice-Chairperson. The
new panel does not include the current Chairperson or Vice-Chairperson. The
applicant argues that the Act provides that the Board is unable to hear a case
or make an order as to excessive prices in the absence of either the current
Chairperson or Vice-Chairperson of the Board.
[38]
The
applicant refers to section 93 of the Act, which provides:
|
Chairperson
and Vice-chairperson
93. (1) The Governor
in Council shall designate one of the members of the Board to be Chairperson
of the Board and one of the members to be Vice-chairperson of the Board.
|
Président et
vice-président
93. (1) Le
gouverneur en conseil désigne,
parmi les
conseillers, un président et un vice-président.
|
|
|
Duties of Chairperson
(2) The Chairperson is the chief
executive officer of the Board and has supervision over and direction of the
work of the Board, including
(a) the apportionment of the work among the members
thereof and the assignment of members to deal with matters before the Board
and to sit at hearings of the Board and to preside at hearings or other
proceedings; and
(b) generally, the conduct of the work of the
Board, the management of its internal affairs and the duties of its staff.
|
Attributions du
président
(2) Le président est
le premier dirigeant du Conseil et, à ce titre, il en assure la direction. Il
est notamment chargé de la répartition des affaires entre les conseillers, de
la constitution et de la présidence des audiences et des autres procédures,
ainsi que de la conduite des travaux
du Conseil et de la
gestion de son personnel.
|
|
|
Duties of
Vice-chairperson
(3) If the Chairperson is absent or incapacitated or if the
office of Chairperson is vacant, the Vice-chairperson has all the powers and
functions of the Chairperson during the absence, incapacity or vacancy.
1993, c. 2, s. 7.
|
Attributions du
vice-président
(3) En cas d’absence
ou d’empêchement du président, ou de vacance de son poste, la présidence est
assumée par le vice-président.
1993, ch. 2, art. 7.
|
|
|
|
|
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[39]
The
submission advanced by the applicant that the Panel is improperly constituted is
both unsustainable in law and impracticable in fact. In my opinion, there is no
ambiguity in the impugned legislative provision and the answer to any alleged ambiguity
can be found upon review of the wording of subsection 93(2) in French, which
confirms that: “il [le président] est notamment chargé … de la
constitution et de la présidence des audiences et des autres procedures.” This makes
it clear that the
Act does not require the Chairperson or the Vice-Chairperson to preside at
every single hearing. Rather, they are charged with the responsibility to
manage the assignment of members (including themselves) to sit and preside at
hearings of the Board. The fact that the Board panel that has been assigned to
the applicant’s case contains neither the Chairperson nor the Vice-chairperson
does not hinder the Board’s ability to carry out the hearing.
IV. Did the Board breach
principles of procedural fairness in rendering the impugned decision?
[40]
There is
no disagreement between the parties that a duty of fairness applies to the
Board’s decision in this case (Hoechst Marion Roussel Canada Inc. v. Canada (Attorney General), 2005 FC 1552 at
paragraph 73 (Hoechst)). Both parties also submit that breaches of
procedural fairness are reviewed on a standard of correctness. I agree (Sanofi
Pasteur, supra, at paragraph 5; Hoechst, supra, at paragraph
61; Leo Pharma Inc. v. Canada (Attorney General), 2007 FC 306 at paragraph 17 (Leo
Pharma)).
[41]
This
Court, in dealing with one of the interlocutory issues raised between the Board
and the applicant, pronounced on the content of the duty of fairness applicable
to the Board’s decisions. In Hoechst, supra, Justice Heneghan
conducted an analysis of the factors outlined in Baker v. Canada (Minister of Citizenship and
Immigration),
[1999] 2 S.C.R. 817 (Baker), and concluded:
73 On
the basis of the foregoing, I conclude that the basic requirements of
procedural fairness, as described [page564] by the Supreme Court of Canada in Lakeside Colony of Hutterian Brethren v. Hofer, [1992] 3
S.C.R. 165, that is the right to an unbiased tribunal, the right to notice and
the opportunity to make representations, apply to the Board's actions. However,
I would grant a considerable degree of flexibility to the Board in respect of
the procedural requirements in light of the factors described in Baker. Subsection 97(1) of the Act clearly states that
proceedings of the Board are to be dealt with as informally and expeditiously
as the circumstances and considerations of fairness permit, providing ample
room for flexibility on the part of the Board, as long as natural justice and
procedural fairness are respected.
[42]
I fully
endorse those comments. In the case at bar, before dismissing the Joint
Submission and deciding to continue the proceedings, the Panel convoked an oral
hearing and afforded to the applicant the opportunity to make representations.
Unreasonable Delay
[43]
The
applicant claims that the delay in this case between the issuance of the Notice
of Hearing and the proposed date for the hearing is so long that it amounts to
an abuse of process pursuant to which the Board loses its jurisdiction to hear
the matter. If the proceedings continue, the Board would be in violation of
principles of procedural fairness.
[44]
The test
used in order to determine whether delay was unreasonable is found Justice
Lebel’s dissent in Blencoe v. British Columbia (Human Rights Commission),
2000 SCC 44, at paragraph 160 (Blencoe):
160 As
indicated above, the central factors toward which the modern administrative law
cases as a whole propel us are length, cause, and effects. Approaching these
now with a more refined understanding of different kinds and contexts of delay,
we see three main factors to be balanced in assessing the reasonableness of an
administrative delay:
(1) the time taken compared to the inherent
time requirements of the matter before the particular administrative body,
which would encompass legal complexities (including the presence of any
especially complex systemic issues) and factual complexities (including the
need to gather large amounts of information or technical data), as well as
reasonable periods of time for procedural safeguards that protect parties or
the public;
(2) the causes of delay beyond the
inherent time requirements of the matter, which would include consideration of
such elements as whether the affected individual contributed to or waived parts
of the delay and whether the administrative body used as efficiently as
possible those resources it had available; and
(3) the impact of the delay, considered
as encompassing both prejudice in an evidentiary sense and other harms to the
lives of real people impacted by the ongoing delay. This may also include a
consideration of the efforts by various parties to minimize negative impacts by
providing information or interim solutions.
[45]
With
regard to the first consideration, in light of section 97(1) of the Act, which
provides that the Board shall deal with proceedings “as
informally and expeditiously as the circumstances and considerations of
fairness permit,” the applicant is correct in concluding that the 9 year period
from April 20, 1999 to July 21, 2008, was likely not what Parliament had in
mind. However, the existence of a long delay, by itself, is not determinative
and other factors must also be considered.
[46]
With respect to the proceedings commenced in 1999 by the issuance
of a Notice of Hearing, it is apparent that the ensuing long
delay was not the sole responsibility of the Board, a factor that speaks
directly to the second consideration. As
recounted above, following the issuance of the Notice of Hearing, HMRC
commenced two judicial review applications to prevent the Board from hearing
the matter. Thus, it is the applicant’s preliminary motion objecting to the
jurisdiction of the Board and their applications for judicial review which
resulted in the 6 year delay from 1999 to 2005. While the motions of the Board
and Board Staff to be added as party or granted intervener status before the
Court may have contributed to the delay, the precipitating event was the
applicant’s initial motion to the Board. For these reasons, I cannot find that
the causes of the delay suggest a finding of unreasonable delay.
[47]
With
respect to the impact of the delay and the existence of prejudice, the
applicant claimed that the length of the delay itself led to a presumption of
prejudice. I cannot accept this blunt statement considering the fact that the
applicant caused much of the delay itself. This conclusion is further
strengthened by the fact that the applicant failed to present to the Court any
evidence of prejudice suffered or of a change in position or reliance on the
delay. Furthermore, the applicant has not been able to show that as a result of
the delay, their ability to respond to the allegations has been impaired (Kaburda
v. Dental Surgeons of British Columbia, 2000 BCSC 481, at paragraph 38. Given
that the applicant was aware of the case against them since they received the
Notice of Hearing on April 20, 1999, it cannot be said that the applicant has
suffered any prejudice as a result of the delay in proceedings. Indeed, the
effect of the 2005 Federal Court judgment is to restrain the period of
examination solely to the patents in issue and not the two patent applications
made by Alza; this decision did not change the case against the applicants in
that they must still face the allegation of excessive pricing.
[48]
In
conclusion, I find that there is no abuse of process or breach to procedural
fairness because of the long delay in this case.
Independence of the Panel
[49]
The
applicant also claims that in failing to accept the Joint Submission of the
Board Staff and HMRC, the Panel merged the roles of adjudicator (normally
carried out by the Panel charged of hearing the matter) and prosecutor (normally
carried out by the Board Staff), compromising the right of the applicant to
have the case decided by an independent and impartial tribunal.
[50]
Justice Heneghan
in Hoechst, supra, at paragraph 83, has already determined that
in carrying out their normal responsibilities, “there is sufficient
institutional impartiality between the overlapping functions as performed by
individuals working as Board Staff or serving as members of the Board panel.”
Indeed, in the course of oral argument before this Court, the applicant’s
counsel conceded that there was no issue with regards to the independence of
the prosecutor. In concurring with HMRC in the request to discontinue the
proceedings, Board Staff did not withdraw the allegations previously made that
there was excessive pricing. Since the Joint Submission does not determine the
issue of whether HMRC engaged in excessive pricing, the issue remains very much
alive. This issue must be decided by the Panel who remains independent from
Board Staff. A well informed person would see no reasonable apprehension of
bias on the part of the Board panel in deciding to hear the matter.
[51]
The applicant
also seems to assert that the Panel is functus officio and had no other
choice but to accept the Joint Submission to terminate the proceedings. The
applicant has not provided any evidence from the Act or Guidelines in
support of such an assertion, which again is clearly unsupported in law and
fact. While the Board Staff may have been responsible for bringing the issue of
excessive pricing before the Board, it remains that it was the Chairperson who
took the decision to commence a formal proceeding by issuing a Notice of
Hearing and establishing a hearing Panel for the Board for that proceeding (see
paragraph 8.1 of Chapter 2 of the Guidelines).
[52]
It is on the
basis above which I distinguish the case at bar from the authority cited by the
applicant in support of its position, McKeown v. Royal Bank of Canada, 2001
FCT 81 (McKeown). In that case, which concerned a complaint of unjust
dismissal made by a Bank employee under Part III of the Canada Labour Code,
R.S.C. 1985, c. L-2, the foundation of the tribunal’s ability to decide the
matter was removed because their jurisdiction was triggered by the complaint of
the applicant. Since the latter had withdrawn her complaint, the tribunal had overstepped
its jurisdiction in going ahead with the complaint. McKeown does not
apply to the present case because unlike in McKeown, there is no
statutory requirement of having a valid subsisting claim before the Board can
proceed with a hearing. Therefore, the unwillingness of the Board to accept the
Joint Submission does not call into question the independence of the
adjudicator.
Legitimate expectations of the applicant
[53]
The
applicant also claims that as a result of their understanding of Board practices
in other proceedings which dealt with off-setting excess revenues, they expected
that the Board would not continue the present proceedings because the reduction
in their prices had off-set any excess revenue they may have previously
accumulated. This argument must also fail.
[54]
First, it
is well established that the doctrine of legitimate expectations does not give
rise to substantive rights (Baker, supra, at paragraph 26).
[55]
Second, the
applicant has not provided any cogent or convincing evidence of where their
expectation comes from. They simply refer to a VCU executed for another product,
but nowhere in this document does the Board state that as a result of a
voluntary reduction in prices, the company can off-set any excess revenue they
may have previously collected.
[56]
As stated
by the Supreme Court in Canadian Union of Public Employees (C.U.P.E.) v. Ontario (Minister of Labour), 2003 SCC 29, at paragraph
131:
131 The
doctrine of legitimate expectation is "an extension of the rules of
natural justice and procedural fairness": Reference re
Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525, at p. 557. It looks
to the conduct of a Minister or other public authority in the exercise of a
discretionary power including established practices, conduct or representations
that can be characterized as clear, unambiguous and unqualified, that has
induced in the complainants (here the unions) a reasonable expectation that
they will retain a benefit or be consulted before a contrary decision is taken.
To be "legitimate", such expectations must not conflict with a
statutory duty. See: Old St. Boniface Residents Assn. Inc.
v. Winnipeg (City), [1990] 3 S.C.R. 1170; Baker, supra;
Mount Sinai, supra, at paragraph 29; Brown and
Evans, supra, at para. 7:2431. Where the conditions
for its application are satisfied, the Court may grant appropriate procedural
remedies to respond to the "legitimate" expectation.
[57]
In the
present case there are no established practices, conduct or representations
that the applicant has been able to show in these proceedings that would give
rise in the Court’s opinion to a clear, unambiguous and unqualified
expectation. Therefore, the applicant does not get the benefit of the doctrine
of legitimate expectations.
The provision of reasons
[58]
The
applicant also argues that the Board did not provide adequate reasons in the
impugned decision. According to the applicant, the Board did not address any of
the points raised during the hearing concerning the passage of time and the
public interest (or lack thereof) in continuing with the hearing. It is not
contested however that the reasons do address the main argument of the joint
submission, namely that the proceedings should be discontinued because the
issues raised in the Notice of Hearing have been resolved.
[59]
Furthermore,
despite the applicant’s concerns with the provision of reasons in the present
case, the applicant’s counsel suggested during the course of oral argument that
had the Board accepted the Joint Submission, there was nothing in the Act that
would require the provision of reasons, despite the Board’s duty to ensure that
the public interest is protected by monitoring the pricing practices of various
patentees.
[60]
I have
carefully read the Joint Submission as well as the Board’s decision and I have
no difficulty in finding that the reasons provided by the Board were adequate
in the circumstances. The Board was not required to provide a detailed analysis
for every factor taken into consideration. Suffice it to note that the
applicant had the opportunity to be heard on the question whether the
proceedings should be discontinued, and it was given an explanation of what was
considered to be the most salient factors.
V. Is the Board’s decision to
continue the proceedings otherwise unreasonable?
[61]
Lastly,
the applicant argues that in refusing the Joint Submission prepared by the
Board Staff and HMRC the Board otherwise acted in an unreasonable manner. This
proposition was not fully developed by the applicant at the hearing before the
Court as it is directly related to its main argument that the Board’s reasons
are inadequate. Therefore, I cannot accept this alternative argument in light
of the conclusions drawn above.
[62]
In any
event, the Board’s decision to continue with the proceedings is reasonable in
the circumstances. The Board is an administrative tribunal with economic
regulatory functions and as such, law and policy require that some leeway be
provided to it, in pursuing its mandate (Ciba-Geigy Ltd. v. Canada (Patented Medicine Prices
Review Board
(1994), 56 C.P.R. (3d) 377, [1994] F.C.J. 884 (F.C.A.) (Q.L.)). It must be
stressed that the impugned decision is not a decision to initiate proceedings.
Acting in the public interest, the Board has already determined that it is
proper to proceed with the matter, and this determination was upheld by this
Court in 2005.
[63]
The Board
is simply not bound by any recommendation made by Board Staff. To find
otherwise would be to empower the Board Staff and the patentee with the ability
to dictate the outcome of proceedings before the Board, a result which would be
clearly inconsistent with the recognized institutional independence of the
Board. The applicant has simply not met the high burden of convincing the Court
that the decision to continue the proceedings is unreasonable. The reasons
provided by the Board in the impugned decision support the conclusion not to
accept the Joint Submission and are reasonable in the circumstances.
VI. Conclusion
[64]
In light
of all the foregoing reasons, this judicial review must be dismissed.
[65]
The
respondent has not sought costs. Accordingly, no costs will be awarded in
favour of the respondent.
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