Date:
20131023
Docket:
T-1194-12
Citation:
2013 FC 1066
Toronto, Ontario,
October 23, 2013
PRESENT: The
Honourable Mr. Justice Campbell
BETWEEN:
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TEVA CANADA LIMITED
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Plaintiff
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and
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PFIZER CANADA INC. AND PFIZER
INC.
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Defendants
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REASONS FOR ORDER AND ORDER
[1]
In
the present action pursuant to s. 8 of the Patented Medicines (Notice of
Compliance) Regulations, SOR/93-133 (the Regulations) the Plaintiff (Teva)
argues that the Defendants (Pfizer) are liable for damages by keeping its drug
RATIO-AMLODIPINE off the market between 2006 and 2009.
[2]
By
a decision dated April 5, 2013, Madam Prothonotary Milczynski denied Pfizer’s
motion to strike out Teva’s Statement of Claim and dismiss the action.
Presently under consideration is Pfizer’s appeal of the Prothonotary’s decision
on an argument with respect to each feature of the
two-part standard of review stated
in paragraph 19 of the decision in Merck & Co v Apotex Inc, 2003 FCA
488 (Merck):
Discretionary orders of
prothonotaries ought not be disturbed on appeal to a judge unless:
a) the questions raised in the
motion are vital to the final issue of the case, or
b) the orders 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.
For ease of reference, the
Prothonotary’s decision is attached as ADDENDUM I to these reasons.
[3]
With
respect to the first part of the standard of review, Pfizer argues that each
question addressed by the Prothonotary in dismissing the motion to strike must
be considered de novo on the present appeal because each is vital to the
final resolution of the present action. Pfizer’s argument is grounded on the
statement in paragraph 18 of Merck that “a decision which can thus be either
interlocutory or final depending on how it is decided, even if interlocutory
because of the result, must nevertheless be considered vital to the final
resolution of the case”. Pfizer also argues “to the extent that recent cases
have come to a different view, they are based on an incorrect reading of the
Federal Court of Appeal’s reasons in Merck” (Pfizer’s Written
Representations, para. 53).
[4]
The
recent cases referred to by Pfizer have held that the issues under
consideration by a Prothonotary leading to a dismissal of a motion to
strike are not subject to being considered de novo on appeal. An example
of this line of authority is Justice Boivin’s decision in Seanautic Marine
Inc (c.o.b. Union Africa Line) v Jofor, 2012 FC 328 at paragraph 20:
[…] The Court recognizes that
recent jurisprudence has held that an appeal from the dismissal of a motion to
strike does not raise a question that is vital to the final issue of the case
(see Ridgeview Restaurant Ltd. v Canada (Attorney General), 2010 FC 506 at para
24, [2010] FCJ No 613; Chrysler
Canada Inc. v Canada, 2008 FC 1049 at para 4, [2009] 1 CTC 145; Apotex Inc. v
AstraZeneca Canada Inc., 2009 FC 120 at para 25, [2009] FCJ No 179; AYC
Pharmacy Ltd. v Canada (Minister of Health), 2009 FC 554 at para 9, 95 Admin LR
(4th) 265; and Horseman v Horse Lake First Nation, 2009 FC 368 at para 2,
[2009] FCJ No 476; Lundbeck Canada Inc. v Canada (Minister of Health), 2008 FCA
265 at para 14, [2008] FCJ No 1275; and Peter G. White Management Ltd. v
Canada, 2007 FC 686 at para 2, [2007] FCJ No 931). Therefore, the Court
concludes that, given the context and nature of the questions raised in the
appeal and in light of the case law above, this matter does not raise a
question that is vital to the final issue of the case and thus should not be
reviewed de novo.
[Emphasis added]
[5]
Pfizer’s
“vitality” argument is based on a careful analysis of Justice Décary’s decision
in Merck and its application by Justice Simpson in Sanofi-Aventis
Canada Inc v Teva Canada Ltd, [2010 FC 1210] (Sanofi). Pfizer’s
argument requires a back to basics review. The critical passages from Merck
in this review are paragraphs 17 to 28 of the decision as quoted in ADDENDUM
II to these reasons.
[6]
In
the decision in Sanofi, after reviewing the
decision in Merck, and, in particular Justice MacGuigan’s
statements in Aqua-Gem, Justice Simpson provides the following
conclusion at paragraphs 31 and 32:
Merck 2003 was a case in which
Apotex sought to make fundamental amendments to its Statement of Defence. The
motions judge who reviewed the Prothonotary's decision to allow the amendment
declined to treat the proposed amendments as vital and did not conduct a de
novo review. He upheld the Prothonotary's decision to allow the Apotex
amendments.
The Court of Appeal found that
the proposed amendments were vital and conducted its own de novo review. In the
end, it declined to permit the amendments. The importance of this decision
for present purposed [sic] is that the restatement and the Court's subsequent
analysis makes it
clear that, as Sanofi submits, it is the question before the Prothonotary that
is the focus of the "vitality" analysis.
[Emphasis added]
[7]
In
my opinion, two principles are communicated by the decision in Merck.
First, a Judge sitting on an appeal from a Prothonotary’s order is required to
consider the vitality of the questions raised in the motion before the
Prothonotary. In this respect, I agree with Justice Simpson’s analysis. But
second, the requirement to consider does not impose a certain response or
outcome. That is, as clearly expressed in paragraphs 22 and 23 of Merck,
for good reason, not all impugned findings made by a Prothonotary require de
novo consideration. Thus, whether a de novo hearing is engaged depends
on the substantive issue under consideration and, as expressed in paragraphs 27
and 28 of Merck, the importance of that issue to the litigation. That
is, context is important.
[8]
In
my opinion, the analysis of the substantive issues undertaken in Merck must
be considered as merely an example of how the principles communicated in the
decision can be applied. And, apart from the principles stated, neither the
decision in Merck nor Sanofi is a precedent for the outcome of
the present motion. Each case turns on its own merits.
[9]
For
example, the decision in Merck addressed whether a motion to amend by
the defendant raised questions vital to the final issues of that claim. The
Court of Appeal found that the amendments would add a completely new defence
that would go to the heart of the claim, so they were considered to be vital.
In the present claim, Pfizer brings a motion to strike Teva’s claim in its
entirety. Therefore, given this fundamental distinction, I find that the
“vitality” reasoning on the
merits in Merck is
distinguishable and is only relevant to the merits of the motion under
consideration in that claim.
[10]
In
my opinion, the jurisprudence of this Court that holds that issues considered
by a Prothonotary leading to the dismissal of a motion to strike are not
subject to being considered de novo on appeal is a proper well-established
application of the second principle I have discerned from the decision in Merck.
Generally speaking, because on a motion to strike the focus of a Prothonotary
is on the test as to whether it is plain and obvious that the claim cannot
succeed, and because the dismissal of a motion to strike allows the full merits
of the claim advanced by a plaintiff to be determined on a trial, it cannot be
said that that the issues considered by a Prothonotary in dismissing a motion
to strike are vital to
the final resolution of the claim. However, the general can be made specific in
a situation where it can be established that the dismissal of a strike motion
will have an impact on the litigation that compels de novo consideration
of certain issues argued to be vital to the litigation. In my opinion, this is
not such a situation.
[11]
In
addition to adhering to the jurisprudence of this Court with respect to
vitality, in my opinion there is good reason to send this claim to trial
without de novo consideration of the issues considered by the
Prothonotary. Albeit with respect to quantum of damages, Teva makes the
following key allegation at paragraph 49 of the Statement of Claim:
The Defendants knew, or ought to
have known, both when the application for the 393 Patent was filed, and when
the T -1350-04 Prohibition Application was commenced and pending, that there
was no basis in fact to support the statements in the 393 Patent that besylate
is sufficiently superior to the other salts, for instance tosylate and mesylate
so as to make it "unique" or "outstanding" or "particularly
suitable" (Impeachment Judgment at para. 179). The selection of words such
as unique, outstanding and particularly
suitable were the work of patent
draftsmanship not of the inventors (Impeachment Judgment at para. 199). The
Defendants' misleading assertion that the besylate salt had these "special
advantages" was central to their ultimately successful argument that
Ratiopharm's allegations of anticipation, double-patenting, and invalid
selection were not justified, and was in contravention of s. 53 of the Patent
Act.
If the allegation is proved at
trial, given the evolution of the interpretation of s. 8 of the Regulations,
the impact of such a finding on liability for damages is uncertain. Justice
Evans in Apotex
Inc. v. Eli Lilly and Co.,
2004 FCA 358 at paragraph 16 cautions that difficult questions involving
the interpretation of s. 8 can only be satisfactorily resolved in the context
of a trial. In
my opinion, this caution certainly applies to the present litigation.
[12]
As
a result, I dismiss Pfizer’s vitality argument.
[13]
With
respect to the second part of the standard of review expressed in paragraph 19
of Merck, Pfizer argues that the exercise of discretion by the Prothonotary
was based upon a wrong principle or upon a misapprehension of the facts.
However, during the course of the hearing of the present appeal, Counsel for
Pfizer confirmed that the Prothonotary was correct in applying both the “but
for” approach and the “plain and obvious” test in reaching a conclusion on the strike
motion. With respect to the abuse of process argument advanced by Pfizer on the
motion, I find that the Prothonotary was correct in applying the “clearly
abusive” test (see: Blencoe v British Columbia (Commission), 2000 SCC 44
at para. 120).
[14]
In
my view, Pfizer’s error argument is based on simply a disagreement with the
conclusions reached in opposition to the arguments advanced on the motion. It
is clear that the Prothonotary’s
points of disagreement with
Pfizer’s arguments are only directed towards determining whether it is plain
and obvious that Teva’s action cannot succeed on its merits or is an abuse of
process and, thus, do not impact in any way on the conclusions that might be
expressed by the trial judge following a trial on the evidence.
[15]
In
my opinion, the Prothonotary approached the motion to strike on correct legal
principles, and on a full apprehension of the facts, and, thus, I find that
there is no basis for interfering with the Prothonotary’s clear reasons for
allowing the claim to proceed to trial.
[16]
As
a result, I dismiss Pfizer’s error argument.
ORDER
THIS
COURT ORDERS that for the reasons provided, the present
appeal is dismissed.
I award costs of the appeal to the
Plaintiff.
“Douglas
R. Campbell”
“ADDENDUM I”
Date:
20130405
Docket: T-1194-12
Toronto, Ontario,
April 5, 2013
PRESENT: Madam Prothonotary
Milczynski
BETWEEN:
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TEVA CANADA
LIMITED
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Plaintiff
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and
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PFIZER CANADA
INC. AND PFIZER INC.
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Defendants
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ORDER
UPON Motion, dated the
20th day of August, 2012, on behalf of the Defendants (collectively “Pfizer”),
for an order:
1.
Striking out the statement of claim and
dismissing this action; and
2.
Granting Pfizer its costs of this action, or in
alternative of the motion, on an elevated scale; or such order as may seem
just.
AND UPON reviewing the
motion records filed on behalf of the parties and hearing submissions of
counsel;
The within action is a claim
for damages, commenced pursuant to section 8 of the Patented Medicines
(Notice of Compliance) Regulations (“PMNOC Regulations” or “Regulations”).
Section 8 provides that liability arises upon the dismissal or discontinuance
of an application for an order of prohibition, brought under section 6 of the PMNOC
Regulations, to compensate the respondent drug manufacturer in the section
6 proceeding for having been kept off the market by virtue of the operation of
the Regulations, namely the “first person” brand-name pharmaceutical
having commenced an application in response to receipt of the “second person”
generic’s Notice of Allegation:
8. (1) If an
application made under subsection 6(1) is withdrawn or discontinued by the
first person or is dismissed by the court hearing the application or if an
order preventing the Minister from issuing a notice of compliance, made
pursuant to that subsection, is reversed on appeal, the first person is liable
to the second person for any loss suffered during the period
(a) beginning
on the date, as certified by the Minister, on which a notice of compliance
would have been issued in the absence of these Regulations, unless the court
concludes that….
(ii) a
date other than the certified date is more appropriate; and
(b) ending
on the date of the withdrawal, the discontinuance, the dismissal or the
reversal.
(2) A second
person may, by action against a first person, apply to the court for an order
requiring the first person to compensate the second person for the loss referred
to in subsection (1).
The determination of the
nature, scope and quantum of damages (if any) payable in a section 8 case
requires the judge hearing the trial to construct a “but for” universe, within
which findings must be made about the presumed conduct and actions of various
players, including the brand-name first person pharmaceutical company, the
second person generic who argues it was delayed in obtaining a notice of
compliance for its product, the Minister of Health, other generics, customers
of these pharmaceutical manufacturers - and as is evident in the within action,
determinations might also need to be made as to what the Federal Court or
Federal Court of Appeal might or might not have done (and/or when) in the
particular circumstances of this case.
To the extent that there may be
(as there are in this case) multiple section 6 proceedings, a patent
impeachment action and the expiry of I.P to factor into this “but for”
universe, it can quickly become populated with many “what-ifs” relating to
various scenarios or outcomes. Final disposition of a section 8 action may
require a great deal in the way of the parties’ and judicial resources, and
many years of litigation to conclude.
Nonetheless, the PMNOC
Regulations have established this regime within which brand name and
generic pharmaceuticals are to resolve these disputes relating to the approval
process, market entry and damages.
In the within action, the
chronology and relevant facts are as follows:
On January 23, 2004 ratiopharm
Canada Inc. filed an Abbreviated New Drug Submission (“ANDS”) for
Ratio-Amlodipine with the Minister of Health, based on demonstrated
bioequivalence to Pfizer’s Norvasc tablets.
Since that time ratiopharm
Canada Inc. and ratiopharm Inc. amalgamated with Teva Canada Ltd (on August 10,
2010), and so for the balance of this order, reference to “Teva” will be used
to refer to either Teva or ratiopharm.
Following the filing of the
ANDS, on June 5, 2004, Teva delivered its Notice of Allegation (“NOA”) in respect
of the two patents listed on the Patent Register against the Norvasc tablets at
that time. Teva acknowledged that a Notice of Compliance (“NOC”) for the
Ratio-Amlodipine product would not issue until the expiry of Canadian Patent
No. 1,253865 (the “865 Patent”) on May 9, 2006, but alleged that the second
patent on the Patent Register, Canadian Patent No. 1,321,393 (the “393 Patent”)
was invalid.
On July 19, 2004, Pfizer
commenced an application under s.6 of the PMNOC Regulations, T-1350-04
for an order prohibiting the Minister of Health from issuing an NOC until the
expiry of the 393 Patent, on the grounds that Teva’s allegations of invalidity
were unjustified.
On October 20, 2004, the
Minister advised Teva that its ANDS for Ratio-Amlodipine was satisfactory.
Thus, but for the commencement of T-1350-04, Teva could obtain its NOC and
enter the market with its product upon expiry of the 865 Patent.
By order dated February 17,
2006, Pfizer’s application for prohibition in T-1350-04 was dismissed. However,
Teva could not just wait until the May 9, 2006 expiry of the 865 Patent to
obtain its NOC. Prior to T-1350-04 being dismissed, on January 20, 2006,
Pfizer caused a new patent to be listed on the Patent Register in respect of
its Norvasc tablets, Canadian Patent No. 2,355,493 (the “493 Patent”).
On February 15, 2006, to
address the 493 Patent, Teva delivered its second NOA, alleging that Teva’s
Ratio-Amlodipine would not infringe the 493 Patent.
On March 31, 2006, Pfizer
commenced its second application for an order of prohibition: T-586-06,
requesting that the Court prohibit the Minister from issuing an NOC to Teva
until the expiry of the 493 Patent.
While the application in
T-586-06 was proceeding, on May 9, 2006 the 865 Patent expired.
Also, while the application was
proceeding, on February 19, 2007, Norvasc related prohibition applications
(Pfizer’s section 6 prohibition proceedings against Pharmascience and Cobalt)
were dismissed. In the Pharmascience and Cobalt matters, the Federal Court
held that it was “plain and obvious” that the 493 Patent should not be listed
under the provisions of the PMNOC Regulations, as against Notice of
Compliance questions.
Pfizer’s application in
T-586-06 in respect of the 493 Patent was dismissed on April 26, 2007.
However, Teva did not obtain its NOC at that time. Despite the expiry of the
865 Patent by this time, the matter of the 393 Patent had not yet concluded.
Pfizer had appealed the
dismissal of the application for a prohibition order in T-1350-04, and on June
9, 2006 the Federal Court of Appeal reversed the dismissal. In its place, the
Court of Appeal issued an order prohibiting the Minister of Health from issuing
a NOC to Teva for Ratio-Amlodipine until the expiry of the 393 Patent.
Teva brought a motion to the
Federal Court of Appeal seeking to have the Court set aside its judgment of
June 9, 2006, dismiss the application and set aside the 393 prohibition order.
That motion was dismissed.
Teva then, on September 21,
2007, commenced an action to impeach the 393 Patent, and on July 8, 2009, the
Federal Court voided the 393 Patent on several grounds.
On July 9, 2009 Teva received
the NOC for its Ratio-Amlodipine product.
Pfizer appealed the July 8,
2009 decision voiding the 393 Patent, but the appeal was dismissed by the
Federal Court of Appeal on July 29, 2010.
Against this factual backdrop,
Teva now seeks to claim damages from Pfizer for having been kept off the market
as a result of the operation of the PMNOC Regulations. The issues on
this motion are:
(i)
Is it plain and obvious that Teva’s action
cannot succeed?
(ii)
Is it plain and obvious that Teva’s action is an
abuse of process; and
(iii)
Is it plain and obvious that Teva’s allegation
that Pfizer engaged in fraudulent and oppressive conduct is an abuse of
process?
I am satisfied that so long as
there is any temporal window within which Teva may reasonably assert attracts
liability for damages, the action must be permitted to continue. The “but for”
world without operation of the PMNOC Regulations must take into account
that at first instance, Pfizer’s application in T-1350-04 was dismissed, the
865 Patent had expired and had Pfizer not commenced the application in T-586-06
in respect of the 493 Patent (which was dismissed), Teva could have received
its NOC and entered the market with its Ratio-Amlodipine tablets between May 9,
2006 and June 9, 2006.
Teva submits that the fact that
the Federal Court of Appeal issued the prohibition order one month after the
expiry of the 865 Patent in respect of the 393 Patent (which was subsequently
found invalid) does not alter the fact that “but for” Pfizer’s application in
T-586-06, Teva would have received an NOC and commenced selling on May 9,
2006. As at May 9, 2006, the prohibition order had not yet been issued by the
Court of Appeal. There is a possibility for this one month window because of
the dismissal of T-586-06. In addition, there may be further “what ifs” based
on plausible arguments relating to the 393 Patent and the fact that it was declared
to be void – can a void patent have any impact on the calculation of damages
under section 8 of the PMNOC – despite or independent of the Federal Court of
Appeal decision on appeal and on reconsideration?
With respect to the decision of
the Federal Court of Appeal on reconsideration, the Court did not make any
determination about Teva’s ability to pursue a section 8 damage claim based on
the dismissal of T-586-06 with respect to the 493 Patent, and made no
determination with respect to Pfizer’s liability under the Regulations in light
of the dismissal of T-586-06. The Court of Appeal addressed the subject of the
motion for reconsideration, namely its decision to reverse T-1350-04 which Teva
urged the Court of Appeal to reconsider in light of the Federal Court’s
findings that the 493 Patent ought not to have been listed. The Court of
Appeal refused to set aside its decision to issue a prohibition order in
respect of the 393 Patent because what Teva was advancing in support of the
motion was “too speculative”:
Beyond this, the
course of events proposed by Ratiopharm is too speculative to give rise to a
new “matter” within the meaning of Rule 399(2)(a) or to justify the invocation
of this Court’s inherent jurisdiction in order to set aside this Court’s prior
decision. Ratiopharm assumes, amongst other things, that if the 493 patent had
not been improperly listed, the Minister would have issued a NOC with respect
to its Besylate tablets prior to the time when Pfizer’s appeal before this
Court was to be heard and in any event, before the Court rendered its decision
with the result that the Court would have exercised its discretion against
disposing of the appeal and a prohibition would not have been issued.
There are an infinite
number of intervening events which could have altered the scenario painted by
Ratiopharm. It is simply impossible to assume that the events would have
unfolded as Ratiopharm suggests or to give this scenario the certainty that
would be required in order to justify the setting aside of the earlier decision
of this Court.
Accordingly, whatever the final
outcome of this action may be, I am not satisfied that the allegations and
claim for damages made by Teva can be found to be an abuse of process or an
attempt to re-litigate the 393 Patent prohibition proceedings. Teva does not
seek to overturn the prohibition order issued by the Court of Appeal, but have
the fact that the 393 Patent was subsequently found void to be included as a
factor in its section 8 damage claim.
Thus, but for T-586-06, Teva
may have obtained the NOC on May 9, 2006 and Teva may (or may not) succeed in
having these considerations related to the delisting of the 493/dismissal of
T-586-06 taken into account, together with other factors related to the 393 Patent
in either asserting some claim for damages for the one month or attempting to
enlarge the window or otherwise in calculating damages. Either way, the
outcome cannot be certain.
It is open to the Court to take
into account a wide variety of factors in a section 8 proceeding:
s.8(4) If a court
orders a first person to compensate a second person under subsection (1), the
court may, in respect of any loss referred to in that subsection, make any
order for relief by way of damages that the circumstances require.
s.8(5) In assessing
the amount of compensation the court shall take into account all matters that
it considers relevant to the assessment of the amount, including any conduct of
the first or second person which contributed to delay the disposition of the
application under subsection 6(1).
Finally, I note that the
jurisprudence relating to section 8 proceedings is still evolving and is not
fully settled. The Regulations by their very nature give rise to the
construction of complex scenarios, such that the “what ifs” unless clearly
abusive or doomed to fail, must be permitted to proceed to be adjudicated on a
full evidentiary record and legal argument at trial. As noted in Apotex
Inc. v Pfizer, 2009 FC 631 at para.29:
These cases involved
the construction of s.8 to answer questions of law raised by the parties…I
agree that where there are difficult legal questions requiring the legal
construction of a complex statutory framework, summary judgment is not
appropriate.
Accordingly, as Pfizer has not
established that Teva’s claim is either entirely without merit and doomed to
fail or constitutes an abuse of process, the motion must be dismissed.
THIS COURT ORDERS that:
1.
The motion be and is hereby dismissed.
2.
In the event the parties cannot agree on costs,
the matter may be spoken to on a case management teleconference.
“Martha Milczynski”
“ADDENDUM II”
Paragraphs
17 to 28 of the decision in Merck & Co v Apotex Inc, 2003 FCA 488
read as follows:
The standard of review
17 This Court, in Canada v.
Aqua-Gem Investment Ltd., [1993] 2 F.C. 425 (F.C.A.), set out the standard of
review to be applied to discretionary orders of prothonotaries in the following
terms:
[...] 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.
Where such
discretionary orders are clearly wrong in that the prothonotary has fallen into
error of law (a concept in which I include a discretion based upon a wrong
principle or upon a misapprehension of the facts), or where they raise
questions vital to the final issue of the case, a judge ought to exercise his
own discretion de novo.
[MacGuigan J.A., at
pp. 462-463]
[footnote omitted]
18 MacGuigan J.A. went on, at
pp. 464-465, to explain that whether a question was vital to the final issue of
the case was to be determined without regard to the actual answer given by the
prothonotary:
[...] It seems to me
that a decision which can thus be either interlocutory or final depending on
how it is decided, even if interlocutory because of the result, must
nevertheless be considered vital to the final resolution of the case. Another
way of putting the matter would be to say that for the test as to relevance to
the final issue of the case, the issue to be decided should be looked to before
the question is answered by the prothonotary, whereas that as to whether it is
interlocutory or final (which is purely a pro forma matter) should be put after
the prothonotary's decision. Any other approach, is [sic] seems to me, would
reduce the more substantial question of "vital to the issue of the
case" to the merely procedural issue of interlocutory or final, and
preserve all interlocutory rulings from attack (except in relation to errors of
law).
This is why, I suspect, he uses
the words "they (being the orders) raise questions vital to the final
issue of the case", rather than "they (being the orders) are vital to
the final issue of the case". The emphasis is put on the subject of the
orders, not on their effect. In a case such as the present one, the question to
be asked is whether the proposed amendments are vital in themselves, whether
they be allowed or not. If they are vital, the judge must exercise his or her
discretion de novo.
19 To avoid the confusion
which we have seen from time to time arising from the wording used by MacGuigan
J.A., I think it is appropriate to slightly reformulate the test for the
standard of review. I will use the occasion to reverse the sequence of the
propositions as originally set out, for the practical reason that a judge
should logically determine first whether the questions are vital to the final
issue: it is only when they are not that the judge effectively needs to engage
in the process of determining whether the orders are clearly wrong. The test
would now read:
Discretionary orders
of prothonotaries ought not be disturbed on appeal to a judge unless:
a) the questions
raised in the motion are vital to the final issue of the case, or
b) the orders 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.
20 With respect to the test
to be applied by this Court on an appeal from a judge's decision, the Supreme
Court of Canada, in Z.I. Pompey Industrie v. ECU-Line N.V. (2003), 224 D.L.R.
(4th) 577, held at para. 18 that the Federal Court of Appeal may only interfere
with the decision of the applications judge where the judge "had no
grounds to interfere with the prothonotary's decision or, in the event such
grounds existed, if [the judge's] decision was arrived at on a wrong basis or
was plainly wrong".
Whether the proposed amendments
are vital to the final issue of the case
21 The first argument raised
by the appellants is that the judge erred in finding that the amendments sought
were not vital to the issue of the case and in not, therefore, exercising de
novo his discretion.
22 The test of
"vitality", if I am allowed this expression, which was developed in
Aqua-Gem, is a stringent one. The use of the word "vital" is
significant. It gives effect to the intention of Parliament, as so ably
described by Isaac C.J. at pages 454 and 455 of his minority reasons in
Aqua-Gem (I pause here to note that the learned Chief Justice's analysis of the
role of the prothonotaries in the Federal Court remains basically unchallenged
in the majority opinion written by MacGuigan J.A.):
[...] such
a standard [of review] is consistent with the parliamentary intention embodied
in section 12 of the [Federal Court] Act, that the office of prothonotary is
intended to promote "the efficient performance of the work of the
Court".
In my respectful view
it cannot reasonably be said that a standard of review which subjects all
impugned decisions of prothonotaries to hearings de novo regardless of the
issues involved in the decision or whether they decide the substantive rights
of the parties is consistent with the statutory objective. Such a standard
conserves neither "judge power" nor "judge time". In every
case, it would oblige the motions judge to re-hear the matter. Furthermore, it
would reduce the office of a prothonotary to that of a preliminary "rest
stop" along the procedural route to a motions judge. I do not think that
Parliament could have intended this result.
23 One should not,
therefore, come too hastily to the conclusion that a question, however
important it might be, is a vital one. Yet one should remain alert that a vital
question not be reviewed de novo merely because of a natural propensity to
defer to prothonotaries in procedural matters.
24 In Aqua-Gem, at p. 464,
MacGuigan J.A. distinguished on the one hand between "routine matters of
pleadings", words used by Lord Wright in Evans v. Bartham, [1937] 2 All
E.R. 646 (H.L.) at 653, and "a routine amendment to a pleading",
words used by Lacourcière J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d)
436 (Ont. C.A.) at 438, and, on the other hand, between "questions vital
to the final issue of the case, i.e. to its final resolution".
25 When is an amendment a
routine one as opposed to a vital one? It would be imprudent to attempt any
kind of formal categorization. It is much preferable to determine the point on
a case by case basis (see Trevor Nicholas Construction Co. v. Canada (Minister
for Public Works), [2003] F.C.J. No. 357, 2003 FCT 255, per O'Keefe J. at para.
7, aff'd, [2003] F.C.J. No. 1706, 2003 FCA 428). I note that amendments that
would advance additional claims or causes of action have consistently been
found, in the Federal Court of Canada, to be vital for the purposes of the
Aqua-Gem test (see Scannar Industries Inc. et al v. Minister of National
Revenue (1993), 69 F.T.R. 310, Denault J., aff'd (1994), 172 N.R. 313 (F.C.A.);
Trevor Nicholas Construction Co., (supra); Louis Bull Band v. Canada, [2003]
F.C.J. No. 961, 2003 FCT 732 (Snider J.).
26 In the case at bar, counsel
for Apotex has opined that since the proposed amendments do not raise a new
defence but simply set out an alternative factual basis for an existing
non-infringement defence, they are routine amendments. Counsel for the
appellants, on the other hand, invite the Court to determine that the proposed
amendments were vital amendments as they are an attempt to withdraw an
admission which would have had an important impact on the final issue of the
case and to raise a new defence.
27 The proposed amendments,
in my view, represent a dramatic departure from the position until now advanced
by Apotex in its pleadings. Its defence of non-infringement was essentially
based on the fact that it had acquired lisinopril made prior to the issuance,
on October 16, 1990, of the '350 Patent and on the fact that it had acquired
lisinopril made under a Compulsory Licence issued to its supplier, Delmar.
Apotex' pleadings in these and other proceedings has always assumed that were
it not for those facts, there would be infringement of the '350 Patent. The
construction of the Patent and the chemical composition of lisinopril has never
been an issue.
28 The proposed amendments,
clearly, would add a totally new defence to the Statement of Defence, a new
defence that would go to the heart of the claim of the '350 Patent and require
expert evidence that could not have been contemplated by the appellants at the
discovery stage in view of the admissions already made in the pleadings and in
the proceedings. They are, in my view, vital to the final issue of the case. A
de novo review of the decision of the prothonotary was therefore warranted and
the applications judge erred in finding that it was not. I must, therefore,
exercise de novo the discretion the applications judge failed to exercise.
[Emphasis added]
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