Docket: A-422-14
Citation:
2016 FCA 218
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CORAM:
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STRATAS J.A.
RYER J.A.*
GLEASON J.A.
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BETWEEN:
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PFIZER CANADA
INC.
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Appellant
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and
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TEVA CANADA
LIMITED
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Respondent
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REASONS
FOR ORDER
STRATAS J.A.
[1]
Pfizer Canada Inc. moves in writing for an order
reconsidering and varying the judgment of this Court in this appeal (reasons
reported at 2016 FCA 161).
A.
The basic facts underlying the motion
[2]
In the judgment that Pfizer seeks to vary, this
Court allowed the appeal from the Federal Court, set aside the Federal Court’s
damage award against Pfizer, and remitted the matter to the Federal Court for
reconsideration.
[3]
In this motion, Pfizer brings to the Court’s
attention that after the Federal Court awarded damages against it, it paid the
damages award to Teva Canada Limited, satisfying its obligations. Then Pfizer
issued its notice of appeal in this Court. After this Court issued its judgment
setting aside the damages award, Pfizer asked Teva to satisfy its obligations
and return Pfizer’s payment, with interest. Teva refused.
[4]
In light of the judgment of this Court and on
the record before us, Teva has absolutely no right to keep Pfizer’s payment. In
submissions on this motion, Teva suggested nothing to the contrary. The
solution, of course would be for Teva to recognize its obligations, respect the
implications of the judgment of this Court, and return the payment to Teva with
some amount respecting interest. But it decided not to do so.
[5]
Pfizer asks this Court to vary its judgment to
add a requirement that Teva return the payment with interest. Pfizer relies
upon Rule 397(1)(b) and Rule 399(2)(a) of the Federal Courts
Rules, SOR/98-106, as amended. Under the former, the Court may reconsider
the terms of its judgment if “a
matter that should have been dealt with has been overlooked or accidentally
omitted.” Under the latter,
it may vary a judgment “by
reason of a matter that arose or was discovered subsequent to [its] making.”
[6]
However, this Court cannot entertain Pfizer’s
motion unless it has subject-matter jurisdiction over it.
[7]
In their motion materials, the parties did not
raise issues of subject-matter jurisdiction. But the fact that the parties have
not raised such issues does not relieve this Court of its responsibility to
ensure that it has subject-matter jurisdiction. A court must always be certain
that it is legally authorized to act. A court that acts without legal
authorization is acting contrary to law and fundamental constitutional
arrangements.
[8]
After reading and considering the parties’
motion materials, this Court was concerned about its subject-matter
jurisdiction. The concern stems from the retirement of Ryer J.A., one of the
three Justices on the appeal panel that issued the judgment of this Court.
Following his retirement, consistent with subsection 45(2) of the Federal
Courts Act, R.S.C. 1985, c. F-7, Ryer J.A. continued to act on cases that
he had heard. But, in accordance with that subsection, eight weeks after his
retirement he became functus. That eight week period has expired.
[9]
Can the two remaining members of the appeal
panel entertain a motion to vary a judgment issued by the three-judge panel?
This Court invited the parties to make submissions on this question.
[10]
The Court has now received and considered the
parties’ submissions. It concludes that it has jurisdiction.
B.
The jurisdictional issue
[11]
As a general rule, judgments on an appeal can be
made only by a panel of three judges: Federal Courts Act, R.S.C. 1985,
c. F-7, subsection 16(1). It follows that as a general rule variations of
judgments under Rules 397 and 399 can be made only by a panel of three judges.
The requirements set out in statutory provisions carry through to the
interpretation of provisions of subordinate instruments, such as regulations.
The Federal Courts Rules are regulations under the Federal Courts Act.
[12]
However, subsection 16(1) does not stand alone.
The Federal Courts Act sets out an exception in circumstances such as
these. Under subsection 45(3), after a judge who has been acting under
subsection 45(2)—such as Ryer J.A. in this case—has become functus, “the remaining judges may give judgment and,
for that purpose, are deemed to constitute the Federal Court of Appeal”: Air Canada Pilots Assn. v. Kelly, 2012
FCA 209, [2012] 1 F.C.R. 308; Canada (A.G.) v. Larkman, 2012 FCA 204,
433 N.R. 184. It follows from this and the reasoning in the preceding paragraph
that orders varying judgments under Rules 397 and 399
can be made by the two remaining judges.
[13]
Teva disagrees. It begins by submitting that
under Rule 399, the Court can designate a new panel of three judges to consider
whether an earlier judgment of the Court should be varied. It adds that the
general rule is that variations be performed by three judges. These
propositions are indisputably true: Pfizer Canada Inc. v. Canada (Minister
of Health), 2011 FCA 215, 420 N.R. 337 at para. 3; Ayangma
v. Canada, 2003 FCA 382, 313 N.R. 312.
[14]
Teva takes this proposition one step further and
says that the Court must always only act under Rule 399 by way of a three-judge
panel. This is a step too far. It ignores subsection 45(3). Under subsection
45(3), the original two-judge panel may act in circumstances such as these.
[15]
Teva adds that jurisprudence of this Court
supports its submissions. It cites Consorzio del Prosciutto di Parma v.
Maple Leaf Meats Inc., 2002 FCA 417, 297 N.R.135 at para. 3. Consorzio
does not assist. It stands only for the proposition that the judge who signed
the judgment in this Court cannot act alone and vary the Court’s judgment under
Rule 397. In Consorzio, Décary J.A. did suggest that there must be a
panel of three judges to vary the Court’s judgment. As a general matter, he is
correct. But he said nothing about subsection 45(3) of the Federal Courts
Act and this Court’s ability to act as a two-judge panel following one
judge’s retirement, nor did the facts of his case call for any comment on that
issue.
[16]
Teva also cites the jurisprudence of other
provincial appellate courts: Beriault (Trustee of) v. Pacific National
Leasing Corp. (1996), 93 O.A.C. 233, 66 A.C.W.S.
(3d) 193 (C.A.); Mullins v. Levy, 2010 BCCA 294, 320 D.L.R (4th) 752.
These authorities are to the same effect as Consorzio and do not concern
subsection 45(3) of the Federal Courts Act and this Court’s ability under
that subsection to act as a two-judge panel. Further, it is trite that all
appeals and appeal courts are statutory. The particular statutes that establish
appeal courts and vest them with particular powers determine their jurisdiction.
Decisions of other provincial appellate courts acting under statutes irrelevant
to the Federal Courts system offer no useful guidance on the question before us.
[17]
This Court has a penumbral jurisdiction
concerning basic matters related to its procedures and powers—a plenary
jurisdiction—and it exists alongside the explicit and implicit powers given to
this Court by statute: see, e.g., Canada (Human Rights Commission) v.
Canadian Liberty Net, [1998] 1 S.C.R. 626, 157 D.L.R. (4th) 385 at paras. 35 to 38; Canada
(National Revenue) v. RBC Life Insurance Company,
2013 FCA 50, 443 N.R. 378 at paras. 35-36; Mazhero v. Fox, 2014 FCA 226
at para. 9. The foregoing analysis should not be taken as foreclosing whether this
Court has jurisdiction to entertain this motion under its plenary jurisdiction.
In particular, I do not comment on the exceptional circumstance where a
judgment requires variation under Rule 397, the original panel cannot act, the
need for this Court to act is urgent, and private or public order must be
preserved.
C.
The merits of the motion
[18]
Rule 399(2)(a) does not apply in
circumstances such as these. That Rule allows for variation, among other
things, where something unforeseen that could not have been dealt with as part
of the appeal hearing but related to it has later happened.
[19]
Here, what has happened was foreseeable and
could have been dealt with as part of the appeal. Pfizer issued its notice of
appeal after it paid Teva the damages award. In its notice of appeal, it could
have specifically requested that if judgment were given in its favour, Teva
should return the payment with interest. It did not.
[20]
Similarly, this is a bar to relief under Rule
397(1)(b). That Rule deals only with “a matter that should have been dealt with” that “has been overlooked or accidentally omitted” in the Court’s judgment. Pfizer’s payment of
the damages award to Teva was not raised in the notice of appeal, nor was any
relief requested in the notice of appeal concerning that. Accordingly, nothing in
the notice of appeal has been “overlooked
or accidentally omitted” in
the judgment of this Court.
[21]
There was a single line or
two in passing amongst the argument at the end of Pfizer’s memorandum of fact and
law filed on the appeal alluding to the need for some undefined quantum of
monies to be refunded. But there was no evidence before the Court concerning
this and, thus, no evidence upon which this Court could act. In any event,
brief, unparticularized mention in passing in a memorandum is no substitute for
a formal, explicit request for specific relief in a notice of appeal. There was
no such request in Pfizer’s notice of appeal.
[22]
The notice of appeal defines
the scope of the appeal, sets the parameters of the debate, and triggers the
Court’s jurisdiction to act. Without a formal, explicit request for specific
relief in the notice of appeal, the request is not before the Court. It was
open to Pfizer to seek leave to amend the notice of appeal to include that sort
of request right up until the time of judgment and offer fresh evidence as to
the payments made in accordance with the Federal Court’s judgment. Pfizer did
not do so. Now that judgment has been rendered, it is not possible to retroactively
expand the scope of the appeal and then vary the judgment.
D.
Where does this leave
Pfizer?
[23]
Pfizer can sue Teva for restitutionary
recovery of monies wrongly withheld from it and any other relief warranted by
Teva’s act. If speed is of the essence, Pfizer can bring a summary judgment
motion on an expedited basis. But in these circumstances there is another option.
This Court has remitted the matter to the Federal Court. The Federal Court will
be determining whether Pfizer owes any damages to Teva and, if so, what the
quantum of damages should be. In a case such as this, the damages are to be
awarded to compensate Teva for damages suffered. As we said at 2016 FCA 161 at
paragraph 47, Teva is “to be
compensated, no more, no less.” In pursuit of this principle, the Federal Court will be bound to take
into account any payments that Teva might have received to which it is not
entitled. As part of this, it will want to hear submissions as to what interest
Teva should pay during the period that it wrongly held Pfizer’s payment.
[24]
When the Federal Court
decides the matter, its judgment becomes a legal statement of the state of
affairs that should have existed all along. Depending on how it decides, it may
turn out that Teva was entitled to its damages award all along. If so, in pursuit
of the compensation principle, the Federal Court may find that Teva’s retention
of Pfizer’s damages payment is of no remedial consequence whatsoever.
E.
Proposed disposition
[25]
In these unusual
circumstances, I would dismiss the motion, but order no costs of this motion.
Although, as explained above, Teva could have conducted itself differently,
both parties long ago could have discussed and resolved how to handle judgments
made as appeals and redeterminations are decided. This motion was avoidable.
“David Stratas”
“I agree.
Mary J.L. Gleason J.A.”
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