Date: 20070404
Docket: T-1321-97
Citation: 2007
FC 367
Toronto, Ontario, April 4, 2007
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
ELI LILLY AND COMPANY
and ELI LILLY CANADA INC.
Plaintiffs
and
APOTEX
INC.
Defendant
AND
BETWEEEN:
APOTEX INC.
Plaintiff by Counterclaim
(Defendant)
and
ELI LILLY AND COMPANY
and ELI LILLY CANADA INC.
Defendants by Counterclaim
(Plaintiffs)
and
SHIONOGI & CO. LTD.
Defendant by Counterclaim
REASONS FOR ORDER AND ORDER
[1]
This is an
appeal by Apotex Inc. from the Case Management Prothonotary who made an Order, inter
alia, refusing to defer or bifurcate the issue of damages, or at least the
quantification of damages, arising out of the claims asserted by Apotex as
Plaintiff by Counterclaim under the provisions of the Competition Act.
[2]
Apotex is
well aware of the burden that it bears on such an appeal. Discretionary Orders
of a Prothonotary are not to be disturbed on appeal unless the question is one
vital to the final issues of the case or was clearly wrong or based on a wrong
principle or misapprehension of the facts. (Merck & Co. v. Apotex Inc.
(2003), 30 C.P.R. (4th) 40 (F.C.A.)). On this motion, Apotex relies
on the second of these grounds, only, arguing that the Prothonotary proceeded
on a wrong principle and misapprehended the facts.
[3]
When a
Prothonotary is acting in a case management role, as was the situation here, considerable
deference should be afforded to determinations made in that context. (see e.g. Anchor
Brewing Co. v. Sleeman Brewing and Malting Co. 2005 F.C. 261 which while being a discovery
questions motion, the general principle is applicable).
[4]
Apotex
argues that the “wrong principle” upon which the Prothonotary proceeded was to
find that damages must be proved as an element of a claim under the Competition
Act. Apotex argues that the “misapprehension of facts” that the
Prothonotary laboured under was that, given that
there was an Order deferring damages in respect of the
patent infringement claim, and given that there would be at least some overlap
or offset of the claim for damages under the Competition Act, it
would be inappropriate to have discovery proceed on one aspect
and not the other, and equally
inappropriate to require Apotex to proceed to trial on its
damages matters, while not requesting the
plaintiffs in the patent infringement aspect to do likewise.
[5]
The
Prothonotary gave Reasons for her Order, stating inter alia.
In sum, I am not satisfied on the balance
of probabilities that, in light of the evidence and all the circumstances of
this case (including the nature of the claim, the conduct of the litigation,
the issues and the remedies sought), severance is more likely than not to
result in the just, expeditious and least expensive determination of the
proceeding on its merits. Ilva
Saronno S.p.A. v. Privilegiata Fabbrica Maraschino “Excelsior” Girolamo
Luxardo S.p.A.(2000), 183 F.T.R. 25 (F.C.T.D.).
There is no evidence that the bifurcation
of damages attributable to the alleged breaches of the Competition Act will
result in any savings or efficiencies. To the contrary, Lilly’s evidence is
that it has conducted its discovery on remedies and requires no further
discovery on this point. Counsel for Apotex advised in the course of the
hearing that, to his knowledge, no further documents are expected from
Shionogi. There is no reason to expect that Shionogi’s discovery will have to
be extended beyond the days now set aside for that purpose in January or that
Apotex’s discovery, now scheduled to conclude in the spring of 2007, will have
to be extended.
I will not comment on each element to
which I have had regard, and which Shionogi and Lilly ably address in detail.
Suffice it to say that, in addition to Apotex’s failure to adduce convincing
evidence, it has failed to demonstrate that liability and damages are distinct
and easily severable in respect of the competition claims.
As a matter of law, proof of loss or
damages is an essential element of the cause of action to fix civil liability
for breaches of the Competition Act: Price v. Panasonic Canada Inc. (2002) 22
C.P.C. (5th) 379 at paras. 27-28; Culhane v. ATP Aero Training Products Inc.,
(2005), 39 C.P.C. (4th) 20 at paras. 1-2; and Eli Lilly and Co.
v. Apotex (2004), 32 C.P.R. (4th) 195 at
para. 6. The issues of liability and damages in respect of the conspiracy
allegations are intertwined, and may not be severed. Absent proof of damages,
therefore, Apotex cannot make out its
civil liability claim under sections 36 and 45 of the Competition Act.
At paragraph 37 of its written
representations, Apotex says that even if it has to establish “the fact” that
it has suffered damages in the liability phase, it considers this to be
distinct from the extent or quantum of the loss.
Thus, in the course of the hearing,
Apotex proposed an alternative to deferring all questions going to damages,
namely, that an order issue deferring only “the quantification of damages”,
without prejudice to the rights of the parties to have discovery as to “the
fact of loss or damages” suffered by Apotex.
As a practical matter, it is not possible
in the context of discovery to limit the parties’ examinations to the fact of
loss as this issue, quite properly, is bound to entail delving into the extent
of the loss. Requiring the parties to maintain a distinction at discovery
between the existence and the extent is both unworkable and likely to prove
contentious at the expense of judicial and other resources.
Just as Apotex has failed to demonstrate
any savings or efficiencies resulting from the bifurcation of damages, or
remedy, as a whole, there is even less of a basis for believing that the
incremental limitation proposed by Apotex will result in any efficiencies. The
likelihood is to the contrary.
[6]
Apotex argues
that the statement that “the issues of liability and damages in respect of
the conspiracy allegations are intertwined, and may not be severed”, is
wrong, therefore the Prothonotary proceeded on a “wrong principle” and the
Court should exercise its discretion anew. I am not entirely persuaded that the
statement is wrong but I will not comment further, since the reasons of the
Prothonotary clearly indicate that she, nonetheless, proceeded to consider all
the arguments that Apotex raised as to difficulties as to discovery and trial. Thus
at the end of the day, whether or not the Prothonotary was “wrong” on a “principle”
is immaterial, she determined the matter based on discretion.
[7]
The second
issue is whether there was a “misapprehension of the facts”. I do not find any
such misapprehension. The reasons of the Prothonotary indicate that the same
matters raised before me were raised before her. She made a reasoned
determination in this regard.
[8]
Therefore,
I find that Apotex has failed to overcome the burden of demonstrating that
there was sufficient error in the decision of the Prothonotary that it should
be reversed on this appeal.
ORDER
For the reasons above;
THIS COURT ORDERS that
1.
The motion
is dismissed.
2.
Costs to
the Plaintiffs, Eli Lilly and Company and Eli Lilly Canada Inc. and Defendant
by Counterclaim, Shionogi & Co. Ltd., in the cause.
“Roger
T. Hughes”