[1] This is an appeal from a decision of von Finckenstein J. of the Federal Court, 2004 FC 1220, dated September 7, 2004, who dismissed the appellant's appeal from a decision of Prothonotary Tabib. In her decision dated June 24, 2004, the learned Prothonotary ordered the appellant to answer a number of questions posed by the respondents, Bristol-Myers Squibb Canada Inc. and Bristol-Myers Squibb Co. (together, "BMS") during the course of examinations on discovery.

Background

[2] On March 26, 2002, the appellant filed a statement of claim in the Federal Court against BMS, claiming damages or accounting of profits by reason by BMS' initiation, on November 18, 1999 in file T-2020-99, of an application for prohibition against the appellant under the Patented Medicines (Notice of Compliance) Regulations (the "Regulations") and the subsequent failure of BMS to discontinue, in a timely manner, its application. I should point out that on February 23, 2001, BMS discontinued its prohibition proceedings.

[3] The appellant also seeks damages against Her Majesty the Queen by reason of the Minister of Health's (the "Minister") refusal to diligently process its Abbreviated New Drug Submission ("ANDS") for its drug Apo-Pravastatin.

[4] BMS' application for prohibition was commenced following receipt by BMS in October 1999 of notices of allegation from the appellant in respect of BMS' patents 1,150,170 (the " '170 patent") and 1,323,836 (the " '836 patent").

[5] Prior to sending its notices of allegation, the appellant had taken the position that it was not obliged, under the Regulations, to issue such notices by reason of the fact that its ANDS for Apo-Provastatin, submitted to the Minister on December 23, 1998, did not make any comparison to BMS's patents.

[6] The Minister did not agree with the appellant and took the position that the appellant was obliged under the Regulations to issue notices of allegation to BMS in respect of patents '170 and '836. Further, the Minister indicated to the appellant that he would not process its ANDS until such time as it had sent notices of allegation to BMS. In the event, the Minister did not begin to review the appellant's ANDS until October 2000. The Minister completed his review by February 21, 2001, and issued a notice of compliance to the appellant on February 27, 2001.The appellant claims damages against Her Majesty the Queen for the resultant delay.

[7] Following the commencement of the appellant's action against the respondents in March 2002, examinations for discovery were conducted in 2003 during the course of which the appellant refused to answer a number of questions posed by BMS on the grounds of relevance. As a result, BMS brought a motion to compel answers to these questions.

[8] On June 24, 2004, Prothonotary Tabib ordered that certain questions were to be answered. The appellant appealed that decision and, on September 7, 2004, von Finckenstein J. dismissed the appellant's appeal, concluding that the questions at issue were relevant and, hence, that the Prothonotary had made no reviewable error.

[9] By its appeal to us, the appellant seeks an order setting aside von Finckenstein J.'s decision, and dismissing BMS' motion to compel answers to the questions at issue.

[10] The parties have conveniently organized the questions at issue into three groups, namely:

1. Questions relating to applications filed by the appellant for listing on provincial drug formularies;

2. Questions relating to whether the appellant's drug Apo-Pravastatin is manufactured by a process that infringed the '170 patent.

3. Questions relating to the appellant's conduct in prosecuting a judicial review application against the Minister by reason of his refusal to process the ANDS for its drug Apo-Pravastatin.

[11] Before turning to the questions at issue, a few words regarding the standard of review which the motions Judge was bound to apply in reviewing the decision of Prothonotary Tabib. In Merck & Co. v. Apotex Inc. (2003), 28 C.P.R. (4^th) 491 at para. 9, our Court explained the standard in the following terms:

[9] It is common ground that when a motions judge hears an appeal from a prothonotary, assuming that no questions vital to the final issue of the case are involved, the reviewing judge can only exercise his or her own discretion in place of the prothonotary's if he or she concludes that the exercise of discretion by the prothonotary "was based upon a wrong principle or upon a misapprehension of facts" (Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (C.A.) at para. 95). In the present case the question for this Court is whether the prothonotary's decision was based upon a wrong principle. If so, the learned motions judge should have set it aside and exercised his own discretion.

[12] In Merck and Co., Inc. v. Apotex Inc. (C.A.), [2004] 2 F.C. 459, Décary J.A., writing for a unanimous Court on this point, reformulated the test put forward by MacGuigan J.A. in Canada v. Aqua-Gem Investments Ltd. (C.A.), [1993] 2 F.C. 425, in order to dissipate confusion which, in his view, had arisen from the wording used by MacGuigan J.A. At paragraph 19 of his Reasons, Décary J.A. wrote:

[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.

[Emphasis added]

[13] At paragraph 20 of his Reasons, Décary J.A. then briefly averred to the test by which we are to review von Finckenstein J.'s decision herein:

[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".

[Emphasis Added]

[14] As neither party has taken the position that the questions raised by Apotex in its motion before the Prothonotary were vital to the final issue of the case, the motions Judge could only intervene if the Order made by the Prothonotary was clearly wrong.

[15] As the issue before the learned Prothonotary was one of relevancy, I should indicate that the correct approach to that issue at the stage of discovery was enunciated by this Court in Everest & Jennings Canadian Ltd. v. Invacare Corp., [1984] 1 F.C. 856, where Urie J.A., writing for the Court at page 2 of the decision, stated:

[...] The correct test of relevancy for purposes of discovery was, in our opinion, propounded by McEachern C.J. in the case of Boxer and Boxer Holdings Ltd. v. Reesor, et al. (1983), 43 B.C.L.R. 352 (B.C.S.C.) When, at page 359, he said:

It seems to me that the clear right of the plaintiffs to have access to documents which may fairly lead them to a train of inquiry which may directly or indirectly advance their case or damage the defendant's case particularly on the crucial question of one party's version of the agreement being more probably correct than the other, entitles the plaintiffs to succeed on some parts of this application.

[16] We recently reaffirmed that test in SmithKline Beecham Animal Health Inc. v. Canada, [2002] F.C.J. No. 837, 2002 FCA 229. At paragraphs 24 and 25 of her Reasons for the Court, Madam Justice Sharlow wrote in the following terms:

[24] The scope and application of the rules quoted above depend upon the meaning of the phrases "relating to any matter in question between ... them in the appeal" and "relating to any matter in issue in the proceeding". In Compagnie Financiere et Commerciale du Pacifique v. Peruvian Guano Company (1882), 11 Q.B.D. 55 (C.A.), Brett, L.J. said this about the meaning of the phrase "a document relating to any matter in question in the action" (at page 63):

It seems to me that every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in the words "either directly or indirectly," because, as it seems to me, a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences.

[25] The "train of inquiry" test for documentary discovery was expressly approved by this Court in Everest & Jennings Canadian Ltd. v. Invacare Corp., [1984] 1 F.C. 856, 55 N.R. 73, 79 C.P.R. (2d) 138 (F.C.A.), adopting the test from Boxer v.Reesor (1983), 43 B.C.L.R. 352, 35 C.P.C. 68 (B.C.S.C.). See also Ikea Ltd. v. Idea Design Ltd., [1987] 3 F.C. 317, 13 F.T.R. 306, 16 C.P.R. (3d) 65 (F.C.T.D.) and Oro Del Norte, S.A. v. The Queen (1990), 35 F.T.R. 107, [1990] 2 C.T.C. 67, 90 D.T.C. 6373 (F.C.T.D).

[17] With those remarks in mind, I now turn to the motions Judge's decision and the grounds put forward by the appellant in seeking to set aside that decision.

[18] I begin with the first group of questions, i.e. those relating to applications filed by the appellant for listing Apo-Pravastatin on provincial formularies. The motions Judge concluded that these questions were relevant and, hence, found no error with the Prothonotary's decision. In his view, by giving an undertaking regarding provincial formularies, counsel for the applicant had implicitely conceded the relevancy of the questions.

[19] The undertaking on which the Judge relied for his determination can be found at pages 23 to 25 of the transcript of the evidence of Dr. Bernard Sherman (Appeal Book, Vol. II, pages 280-282), the appellant's witness, and it is as follows:

MR. CREBER: I have outstanding the question as to how the Ontario government was able to determine interchangeability. If you could provide a more complete answer on that, I would appreciate it.

MR RADOMSKI: I don't understand the question. You want us to go into the mind of the Ontario regulator to decide how the Ontario regulator determined that the Apotex product would be interchangeable?

MR. CREBER: Let's back up.

Q. You are aware that your company has to apply to the Ontario government to be listed on the formulary?

A. Yes.

Q. Therefore, there is a document that made such an application?

A. Yes.

Q. Can I see that document?

MR. RADOMSKI: Why Is that document relevant?

MR. CREBER: In there I assume that there would be references to the comparative bioavailability studies that were forwarded by the federal government.

MR. RADOMSKI: Here is what I am prepared to do.

THE WITNESS: That would be long after any relevant event.

MR. RADOMSKI: I appreciate that. I will look through the provincial submission, in light of the issue as you have identified it and, if there is anything relevant, we will produce it.

- - - UNDERTAKING

MR. CREBER: I would ask also for the other provinces and territories and private formularies in that request.

MR. RADOMSKI: You are asking for a lot. Dr. Sherman has pointed out that the provincial submission post-dates the federal submission and the federal Notice of Compliance. The issue has nothing to do with the provinces: it has only to do with the federal regulations.

I will look through the Ontario submission and, if there is anything relevant in there, we will produce it. If there is nothing relevant in there, then there is nothing to produce. If there is something relevant in the Ontario submission, I will then consider whether we will look at the other provinces' submissions.

[20] As I understand the undertaking, counsel for the appellant agreed to produce the appellant's applications to the Ontario Government, to the other provinces and territories and to private formularies, to the extent only that "there is something relevant", i.e. that there was a reference to the comparative bioavailability studies forwarded by the federal government. Consequently, I cannot see how the undertaking can be read as constituting an implicit recognition by the appellant that Apotex' applications to be listed on provincial formularies were relevant to the issues between the appellant and BMS.

[21] I am therefore of the view that the Judge was clearly wrong in finding, as he did, that the point of relevance had been conceded by the appellant. There can be little doubt that the debate between the parties pertains to the filing of the appellant's ANDS with the Minister and, specifically, whether the appellant's ANDS makes reference to BMS' patents. This appears quite clearly from the pleadings and, in particular, from paragraph 25 of the appellant's Statement of Claim, paragraphs 10 and 14 of BMS Canada's Statement fo Defence and paragraphs 12 to 16 of BMS US' Statement of Defence.

[22] I should point out that no issue is raised in the pleadings concerning the appellant's provincial filings.

[23] In supporting the Judge's conclusion on this issue, BMS argued that the questions were relevant, not only on the pleadings, but by reason of the appellant's conduct and the remedy that it seeks.

[24] With respect to the pleadings, BMS says that if there is a reference in the provincial formularies to their patents, then the questions are clearly relevant. I cannot agree. Firstly, provincial formularies are not raised in the pleadings and, secondly, as I have just indicated, the issue between the parties concerns the appellant's ANDS filed with the Minister.

[25] With respect to the appellant's conduct and the remedy sought, BMS argues, inter alia, that if the sales of a generic product depend, in great part, on the provincial listings, the dates of these listings are crucial in determining the appellant's damages. Assuming, but without deciding, that the dates of the provincial listings are relevant, I still do not see how this makes the provincial filings, per se, relevant.

[26] I therefore conclude that the Judge erred in concluding that the questions of group one were relevant. In my view, they clearly were not relevant and, as a result, the Judge ought to have interfered with the Prothonotary's decision. Consequently, the appellant need not answer these questions.

[27] I now turn to the second group of questions which pertain to whether the appellant's Apo-Pravastatin was manufactured by a process which infringed BMS' '170 patent.

[28] The judge, after referring to paragraph 21 of the appellant's Statement of Claim, where the appellant alleges that its drug was manufactured by a non-infringing process, and to paragraphs 17 and 18 of the BMS respondents' respective Statements of Defence, where the appellant's allegations are denied, concluded that the questions were relevant because the questions were directed at facts that were in dispute between the parties.

[29] If, as the appellant argues, the questions at issue, although raised in the pleadings, are not relevant because the '170 patent expired in July 2000 and that the only period of time at issue between it and BMS is February 21 to February 27, 2001, then the allegation in paragraph 21 of its Statement of Claim should, as the judge held, have been withdrawn.

[30] Before concluding on this point, I wish to point out that at paragraphs 2(a) and 44 of its Statement of Claim, the appellant seeks damages from BMS by reason of its initiation of prohibition proceedings, and that at paragraph 10 of its Reply to BMS' Statements of Defence, the appellant alleges that BMS ought never to have commenced its proceedings. In the light of these allegations, it is perfectly understandable why BMS would wish to make inquiries with regard to the process used by the appellant to manufacture Apo-Pravastatin.

[31] I am therefore of the opinion that the motions Judge made no reviewable error as far as this group of questions is concerned.

[32] I now turn to the final group of questions, i.e. those that pertain to the appellant's refusal to answer questions relating to the judicial review application which it commenced as a result of the Minister's refusal to process its ANDS. Specifically, the appellant refused to produce the affidavit of Dr. Bernard Sherman, its President, filed in support of the judicial review application, on the grounds that the application and the affidavit were not relevant to its claim against BMS.

[33] At paragraphs 27 and 28 of his Reasons, the motions judge concluded, in the following terms, that the documents were relevant:

[27] I find it difficult to accept this argument. Having produced the mandamus application (which it intends to rely on for some purpose) which refers to the supporting affidavit, it is incumbent on Apotex to produce this referenced affidavit. It may well be totally irrelevant to BMS Canada and BMS US as Apotex claims. However, without examining that document it is impossible to determine its relevance. At this point only Apotex knows the contents of the affidavit and its relevance.

[28] It may or may not be relevant for instance, to an assessment of the conduct of Apotex. This litigation is based on s. 8 of the Patented medicines (Notice of Compliance) Regulations. In such proceedings, the conduct of the first or second person which contributed to the delay is relevant to the quantum of damages. The affidavit in question may or may not shed light on the conduct of Apotex. As long as Apotex does not withdraw this document, it must produce supporting documents referenced therein.

[34] The appellant says that its judicial review application, brought against the Minister on November 25, 1999, in Court file T-2074-99, and ultimately discontinued, is not in issue between it and BMS. In its view, the Judge erred in finding relevance on the basis that the notice of application appeared in its affidavit of documents filed under rule 223 of the Federal Court Rules, 1998.

[35] The appellant says that it was bound to include the notice of application in its affidavit of documents by reason of rules 222 and 223, which require a party to disclose all documents that may be relevant to an issue, whether or not it intends to rely on these documents. Thus, since the notice of application is no doubt relevant to the issues between the appellant and Her Majesty the Queen, the appellant says that it had no choice but to include the document in its affidavit of documents.

[36] The appellant, therefore, takes issue with the motions Judge's conclusion that in listing the notice of application in its affidavit of documents, the appellant must have intended to rely on it "for some purpose". In my view, in so concluding, the motions Judge was clearly in error. Rule 222(2) makes it clear that all documents relevant to an issue between the parties must appear in an affidavit of documents, whether or not the party filing the affidavit intends to rely on the document. Rule 222(2) reads as follows:

222. (2) For the purposes of rules 223 to 232 and 295, a document of a party is relevant if the party intends to rely on it or if the document tends to adversely affect the party's case or to support another party's case.

222. (2) Pour l'application des règles 223 à 232 et 295, un document d'une partie est pertinent si la partie entend l'invoquer ou si le document est susceptible d'être préjudiciable à sa cause ou d'appuyer la cause d'une autre partie.

[37] There can be no doubt that the appellant's application for judicial review in Court file T-2074-99 and the matters raised therein are relevant to the issues between the appellant and Her Majesty the Queen. The question for determination herein is whether the appellant's judicial review application and, hence, Dr. Sherman's affidavit, have any relevance to the issues between BMS and the appellant.

[38] In support of the Judge's conclusion on this point, BMS point to his finding that Dr. Sherman's affidavit may shed light on the appellant's conduct and, as a result, is relevant. BMS further argues that it does not lie with the appellant to make general allegations against all respondents, and then to attempt to limit the debate by taking the position that certain of these allegations do not pertain to its claim against BMS.

[39] I have carefully reviewed the appellant's Statement of Claim and its Reply to BMS' Statements of Defence, and I am of the view that in light of the allegations found in the appellant's pleadings against it, BMS is entitled to discover the appellant in regard to its judicial review application and, hence, in regard to Dr. Sherman's affidavit.

[40] Since the appellant makes specific allegations against BMS regarding its decision to commence prohibition proceedings and is claiming damages caused to it by reason of the commencement of those proceedings, BMS should be allowed, in my view, to discover the appellant with respect to all facts, including those pertaining to its conduct, which might have a bearing on the damages sought. In that regard, it is relevant, in my view, for BMS to, inter alia, know why the appellant delayed the sending of its NOA.

[41] Consequently, I cannot conclude that the Judge made a reviewable error in refusing to interfere with the Prothonotary's decision.

[42] For these reasons, I would allow the appellant's appeal in part, I would set aside the Federal Court's decision insofar as the questions of group one are concerned, and I would accordingly dismiss BMS' motion to compel answers to the questions found in that group. In the circumstances, I would make no order as to costs.

"M. Nadon"

J.A.

"I agree.

Marshall Rothstein J.A."

"I agree.

K. Sharlow J.A."

FEDERAL COURT OF APPEAL

Names of Counsel and Solicitors of Record

DOCKET: A-476-04

STYLE OF CAUSE: APOTEX INC. v. HER MAJESTY THE QUEEN ET AL

PLACE OF HEARING: TORONTO, ONTARIO

DATE OF HEARING: THURSDAY, APRIL 28, 2005

REASONS FOR JUDGEMENT: NADON J.A.

CONCURRED IN BY: ROTHSTEIN J.A.

SHARLOW J.A.

DATED: June 9, 2005

APPEARANCES BY:

Ms. Julie Rosenthal For the Appellant

Mr. Patrick Smith For the Respondent (Bristol-Myers Squibb)

Mr. Marc Richard For the Respondent (Bristol-Myers Squibb)

SOLICITORS OF RECORD:

GOODMANS LLP For the Appellant

Barristers & Solicitors

Toronto, Ontario

Gowling Lafleur Henderson LLP For the Respondent (Bristol-Myers Squibb)

Barristers & Solicitors

Ottawa, Ontario

John H. Sims, Q.C. For the Respondent (Her Majesty the Queen)

Deputy Attorney General of Canada

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Apotex Inc. v. Canada, 2005 FCA 217

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2005 FCA 217