Date:
20130219
Dockets: A-337-12
A-338-12
A-339-12
Citation:
2013 FCA 45
CORAM: BLAIS
C.J.
GAUTHIER
J.A.
TRUDEL J.A.
Docket:
A-337-12
BETWEEN:
APOTEX
INC.
Appellant
and
ELI LILLY
CANADA INC.
Respondent
Docket: A-338-12
BETWEEN:
APOTEX INC.
Appellant
and
ELI LILLY CANADA INC.,
ELI LILLY AND COMPANY, ELI LILLY S.A. and
LILLY, S.A.
Respondents
Docket A-339-12
BETWEEN:
APOTEX INC. and
TEVA CANADA LIMITED
(Formerly known as NOVOPHARM
LIMITED)
Appellants
and
ELI LILLY CANADA INC.,
ELI LILLY AND COMPANY,
ELI LILLY S.A. and LILLY, S.A.
Respondents
REASONS FOR JUDGMENT
BY THE COURT
(Delivered
from the Bench at Montreal, Quebec, on February 19, 2013)
[1]
These
are consolidated appeals commenced by Apotex Inc. (Apotex) from an order by
Rennie J. of the Federal Court (2012 FC 880) upholding the order of
Prothonotary Aronovitch (T‑656-09, T-512-10, T-516-10) permitting the Eli
Lilly group of companies (Lilly) to obtain samples from various batches of bulk
raloxifene hydrochloride for the purpose of conducting tests described in said
order. The impugned order was made pursuant to Rule 249 of the Federal
Courts Rules, SOR/98-106 (the Rules) the interpretation of which is at the
heart of these appeals.
[2]
These
appeals were heard on the same day as other appeals commenced by Apotex in the
same context. In appeal A-300-12, Apotex and Apotex Pharmachem Inc. appeal from
an order made by Tremblay-Lamer J., T-1407-09, upholding the previous order
made by Prothonotary Tabib, this time in favour of H. Lundbeck A/S. In appeal
A-370-12, Apotex and Apotex Pharmachem Inc. appeal from an order made by Mosley
J. (2012 FC 991) also upholding a previous order by Prothonotary Aronovitch in
a file opposing Apotex to the Astrazeneca group of companies (Astrazeneca).
[3]
As
a result, the reasons of this Court disposing of Apotex’s arguments regarding
the Federal Court’s interpretation of Rule 249 in these consolidated appeals
will be incorporated by reference into the reasons issued in appeals A-300-12
and A-370-12. Of course, any issue specific to one of these files will, if
needed, be discussed in the reasons disposing of that particular appeal.
[4]
It
is trite law that 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 was based upon a wrong
principle or a misapprehension of facts; or
(b) in making them, the prothonotary
improperly exercised his or her discretion on a question vital to the final
issue of the case.
(Z. I. Pompey Industrie
v. ECU-Line N.V., 2003 SCC 27 at paragraph 18, endorsing Canada
v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 at 462-463 (F.C.A.)).
[5]
Rule
249 is a discovery mechanism allowing the Court if satisfied that it is
“necessary or expedient [nécessaire ou opportun] for the
purpose of obtaining information or evidence in full [renseignements
complets ou preuve complete]”, to order in respect of any property
that is the subject-matter of an action:
(a) a sample be taken of
the property;
(b) an inspection be made
of the property; or
(c) an
experiment be tried on or with the property.
[6]
Apotex’s
submissions are best summarized at paragraph 5 of its Memorandum of fact and
law:
… The decisions below trivialize
the “necessity or expediency” requirements imposed by Rule 249, disregard this
Court’s caution to only grant samples in exceptional circumstances and fail to
require the moving parties to meet their evidentiary burden on a motion under
Rule 249. In the result, the decisions below replace this Court’s historical
reluctance to encroach on a party’s property rights with an apparent
willingness to do so, in effect making Rule 249 redundant.
[7]
Rule
249 reads essentially as former Rule 471 (pre 1998 revision of the Rules). The
language of Rule 249 is very similar to the Rules of practice applicable in
Saskatchewan, British Columbia or the Yukon which both include the words
“necessary or expedient” (Saskatchewan Queen’s Bench Rules, rule 390; British
Columbia Supreme Court Civil Rules, B.C. Reg.
168/2009, rule 7-6(4); British Columbia Supreme
Court Rules, B.C. Reg. 221/90, rule 30(4) (Repealed); Yukon
Rules of Court, Yuk. Reg. O.I.C. 2009/65, rule 30(5)),
while the applicable rules in Ontario, Manitoba, Prince Edward Island or New
Brunswick, for example, only refer to the concept of what is “necessary for the
determination of an issue in the proceeding” (Ontario Rules of Civil
Procedure, R.R.O. 1990, Reg.194, rule 32.01; Manitoba Court of Queen’s
Bench Rules, Man. Reg. 553/88, rule 32.01; Prince Edward Island Rules of
Civil Procedure, rule 32.01; Rules of Court of New Brunswick, N.B.
Reg. 82-73, rule 35.01).
[8]
The
parties have provided us with case law indicating that the word “necessary”
used in these various provincial Rules appears to have been consistently
understood to mean that there is “a reasonable possibility that the proposed
test will reveal something useful for the trier of fact (that is something
which will assist the trier of fact in determining an issue in the proceeding)”
(See for example Peel School District No. 19 v. 553518 Ontario Ltd. (c.o.b.
Munden Park Electric), [2000] O.T.C. 687, 49 C.P.C. (4th) 384 at
paragraph 16 (S.C.J.); I.C.R.
General Contractors Ltd. v. Broadview Developments Ltd., 2011
NBBR 20 at paragraph 12; Thorpe v.
Honda Canada Inc.,
2009 SKQB 488 at paragraph 22; Bennett v. D.C. Jones Circle V. Ranches Ltd.
(1987), 20 C.P.C. (2d) 213, 52 Alta. L.R. (2d) 253 at
paragraphs 2, 4 (A.C.Q.B.); Dexter
Estate v. Economical Mutual Insurance Co., 2007 NBQB 266 at paragraphs 6-7)).
[9]
Apotex
has not explained why this interpretation should not be adopted in respect of
Rule 249. It simply relies on the previous decisions from this Court, which, in
Apotex’s view, indicate that the word “necessary” has a different meaning in
Rule 249. Apotex argues that the test of relevance which drives other discovery
Rules, such as Rule 223, is not sufficient to meet the requirements of Rule
249. Why else require an order of the Court? Necessarily because, Apotex
claims, the test under Rule 249 is a more stringent one. We disagree with
Apotex’s approach to Rule 249.
[10]
Read
in the context of Rule 3, which was added in the 1998 revision of the Rules,
the test set out in Rule 249 is clear and does not require that this Court
provide more detailed and strict guidelines in respect of its application. In
fact, it would be unwise to try to do so as it is evident that the use of the
words “necessary or expedient” was intended to give a broad discretion
to the Court. As always, facts do matter and they are particularly important
when dealing with motions such as those under Rule 249 which require the Court
to balance any number of factors relevant to the three main interests at play:
those of the party requesting the inspection or samples, those of the party in
possession of the property concerned and those of the trier of fact. It is
because of this need to balance all the relevant factors that a party must move
to get an order under Rule 249, contrary to other discovery Rules. In our view,
this is exactly how the Prothonotary approached her task when she set out to
determine the motions before her.
[11]
We
do not accept Apotex’s submission that our Court set out a strict test in P.J.
Wallbank Manufacturing. Co. Limited v. Kuhlman Corporation, [1981] 1 F.C.
645, 50 C.P.R. (2d) 145 at 146 (F.C.A.) (Wallbank) and in Posi-Slope
Enterprises Inc. v. Sibo Inc., 1 C.P.R. (3d) 140, [1984] F.C.J. no. 507
(QL) at 141 (F.C.A.) (Posi-Slope) and that the Prothonotary and the Judge
were bound to require evidence that the proposed tests were “the only means”
for the Respondents to establish their case or at least that this was an
“exceptional case” where such testing was the solution of “last resort” as
mentioned in Gerber Garment Technology Inc. v. Lectra Systems
of Canada, 66 C.P.R. (3d) 24, [1996] F.C.J. no. 41 (QL) at paragraph 3
(F.C.A.) (Gerber).
[12]
In
Wallbank, this Court overturned the decision of Cattanach J. on the
basis that he was wrong when he found that the inspection of the premises was
the only means available to the plaintiff. That being so and considering the
irreparable harm (prejudice) that could result from the said inspection, this
Court found that the Judge should not have issued the Order. This conclusion was
based on the balancing of the relevant factors in the particular facts of that
case.
[13]
It
is also clear from the decision of this Court in Posi-Slope, above, that
the motion was dismissed as “it was not necessary for either the purpose of
pleading or for any immediate purpose” expressly leaving the door open for the
applicant to bring a further motion at a later stage.
Posi-Slope cannot be read as
construing the full scope of Rule 249 (as it then read) when the very language
of the Rule is absent from the Court’s reasons.
[14]
The
Court agrees with Apotex that the same test applies to all orders pursuant to
Rule 249. But once again, facts matter. We understand that the balancing of the
relevant factors may well weigh more in favour of dismissing a motion for the
inspection of private premises, as it was the case in Wallbank and Posi-Slope,
as it often involves a serious intrusion and possibly irreparable harm for the
party whose property is concerned.
[15]
Usually,
the information that is available through discovery (for example, a full and
detailed description of the property or machinery or photographs thereof) is
sufficient to satisfy all the interests at play. However, in complex
pharmaceutical patent cases like the present ones, the usual mechanisms of
discovery may well not suffice and parties will often have to rely on Rule 249.
Of course, orders will still only issue upon the Federal Court being satisfied
that the requirements of Rule 249 have been met.
[16]
In
such cases, “expediency” may well be a major factor for the Court in exercising
its discretion (Richter Gedeon Vegyészeti Gyar RT v. Apotex Inc., Order
of Lutfy, A.C.J. dated 4 December 2000, Docket T-2520-93; Richter Gedeon Vegyészeti Gyar RT v. Apotex Inc.,
2002 FCT 1284, affirmed 2003 FCA 221; Glaxo
Group Ltd. v. Novopharm Ltd, 87 A.C.W.S. (3d) 356, [1999] F.C.J. no. 381
(QL) (F.C.T.D.)).
[17]
We
are satisfied that the Judge and Prothonotary below were alive to Apotex’s
submissions, including the argument that Lilly had already obtained an order
for a first round of samples. We agree, substantially for the reasons it gave
with the Federal Court’s analysis and the ensuing result.
[18]
In
concluding as we do, we are reminded of the principle set out in previous
decisions of this Court that one should be particularly reluctant to interfere
with discretionary decisions made on non-vital issues such as those raised in
the current appeal by Prothonotaries or Federal Court Judges in the course of
case managing a matter (See Sawbridge Indian Band v. Canada (Minister of Indian Affairs and Northern Development, 2001 FCA 338 at
paragraph 11; j2 Global Communications Inc. v. Protus IP
Solutions, 2009 FCA 41 at paragraph 16; Mushkegowuk Council v. Canada (Attorney
General), 2011 FCA 133 at paragraph 5).
[19]
Therefore,
the appeals will be dismissed with costs and a copy of these reasons will be
placed in each of the consolidated appeals (A-337-12; A-338-12; A-339-12) with
a formal judgment issuing in each of these appeals.
“Pierre Blais”
“Johanne Gauthier”
“Johanne
Trudel”
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