Dockets: A-311-15
A-187-12
Citation:
2016 FCA 194
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CORAM:
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DAWSON J.A.
STRATAS J.A.
GLEASON J.A.
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BETWEEN:
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ASTRAZENECA
CANADA INC.
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Appellant
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and
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APOTEX INC.
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Respondent
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REASONS
FOR JUDGMENT
DAWSON J.A.
[1]
Rule 399(2)(a) of the Federal Courts
Rules, SOR/98-106, allows a court to set aside or vary an order or judgment
by reason of a matter that arises or is discovered after the order is made.
[2]
AstraZeneca Canada Inc., the appellant in Court
File A-311-15, sought variation of the judgment of the Federal Court rendered
by Justice Hughes on May 11, 2012, in Court File T‑2300‑05. For
reasons cited as 2015 FC 799, Justice Hughes dismissed the motion with costs.
AstraZeneca now appeals from this order of the Federal Court.
[3]
The relevant facts are not contested and are not
complex.
[4]
In January 2004, Apotex Inc. entered the market
with its generic version of omeprazole, Apo-Omeprazole. In consequence,
AstraZeneca sued Apotex for patent infringement.
[5]
Apotex then sued AstraZeneca in Court File
T-2300-05 pursuant to section 8 of the Patented Medicine (Notice of
Compliance) Regulations, SOR/93-133 (Regulations) seeking damages arising
from its delayed entry into the market for omeprazole. In this proceeding, one
defence raised by AstraZeneca was a plea that Apotex was not entitled to
damages because any sales of Apo-Omeprazole made during the relevant period
would infringe another AstraZeneca patent (the ‘693 Patent). AstraZeneca also
argued that such infringement was a relevant factor to consider pursuant to
subsection 8(5) of the Regulations so as to reduce or eliminate any
compensation payable to Apotex.
[6]
On May 12, 2012, for reasons cited as 2012 FC
559, Justice Hughes rendered his judgment in Court File T-2300-05. Justice
Hughes rejected AstraZeneca’s defence at paragraphs 140 to 150 and 175 to 181
of his reasons. Of particular relevance to the appeal before us is Justice
Hughes’ conclusion at paragraph 148 that:
… A Court hearing the pending infringement
action, if it concludes that the patent is valid and has been infringed by
Apotex in making the omeprazole drug that is the subject of these proceedings,
can at that time craft a remedy that is appropriate, having in mind any
compensation awarded in these proceedings.
[7]
In material part the judgment provided that
Apotex was entitled to be compensated under subsection 8(1) of the Regulations
for the loss it suffered during the period from January 3, 2002 to December 30,
2003 as a result of a prohibition proceeding commenced by AstraZeneca. The
judgment further provided that there was no basis for an exercise of judicial
discretion under subsection 8(5) of the Regulations to reduce or refuse
compensation to Apotex. Finally, the judgment directed a reference into the
amount of compensation owed to Apotex by AstraZeneca.
[8]
AstraZeneca appealed from the judgment of the
Federal Court to this Court; the appeal was dismissed with costs (2013 FCA 77).
[9]
One of the errors asserted on appeal by
AstraZeneca was that Justice Hughes had erred in finding the pending
infringement action to be irrelevant to the claim for damages under section 8
of the Regulations. This Court rejected AstraZeneca’s argument, expressly affirming
the correctness of the passage quoted above at paragraph 6 and characterizing
the passage to have been the fundamental reason for Justice Hughes’ decision.
The Court went on to state that “[i]t will be for the judge
trying the infringement action to ensure that overall, taking both proceedings
together, a party is compensated for its provable loss, if any, on proper
principles, no more and no less”.
[10]
It is in this context that AstraZeneca moved for
variation of the May 11, 2012 judgment. The basis for its motion was a finding
by Justice Barnes of the Federal Court in an action for patent infringement
that Apotex had infringed certain claims of the ‘693 Patent (2015 FC 322 and
2015 FC 671). This finding was said by AstraZeneca to be a new matter that arose
after the judgment of Justice Hughes in the section 8 proceeding.
[11]
Two variations to the judgment were sought by
AstraZeneca on the motion. The first variation sought to add a provision that
when determining Apotex’ entitlement to damages, the reference Judge may have
regard to the judgment of Justice Barnes. The second variation would have
reversed Justice Hughes’ conclusion that there was no basis for an exercise of
discretion under subsection 8(5) of the Regulations to reduce or refuse
compensation to Apotex. Instead, the judgment would provide that the reference
Judge might have regard to the judgment of Justice Barnes when exercising
discretion under subsection 8(5) of the Regulations.
[12]
As noted above, Justice Hughes dismissed the
motion for variation. He gave a number of reasons for his decision, only two of
which need be dealt with on this appeal.
[13]
Justice Hughes’ principal reason for dismissing
the motion was that in his original decision he had expressly considered the
scenario where Apotex might later be found to have infringed another patent.
Further, this Court had agreed with his conclusion that it would be for the
Judge in the infringement action to ensure a party is neither over nor under
compensated for its loss. Thus, Justice Hughes wrote the “only thing that has now happened is that the ‘might happen’ scenario considered by me and the Court of
Appeal has become a reality. That makes no difference. The ‘reality’ has
already been considered and a determination made. Nothing changes.”
[14]
I agree with Justice Hughes for the reason that
he gave. Justice Barnes’ finding of infringement of the ‘693 Patent is not a
matter that arose or was discovered after Justice Hughes’ judgment in the
section 8 proceeding within the contemplation of Rule 399(2)(a). This
finding is dispositive of the appeal.
[15]
The Judge’s second reason for dismissing the motion
was his view, relying upon the decision of this Court in Grenier v. Canada,
2008 FCA 63, [2008] F.C.J. No. 256, that because this Court had affirmed the
judgment of the Federal Court, it would be for this Court to vary the judgment
of the Federal Court as affirmed.
[16]
AstraZeneca argues that the Judge erred in law
on this point. Out of an abundance of caution it has, however, moved in this
Court for the same variation of the judgment requested in the Federal Court.
Again, AstraZeneca relies on Rule 399(2)(a). This is the subject matter
of Court File A-187-12.
[17]
I respectfully disagree with the Judge that the
motion to vary the judgment ought to have been brought in this Court. I reach
this conclusion for the following reasons.
[18]
First, the passage in Grenier relied upon
by the Judge was to the effect that a trial court cannot correct a judgment it
has rendered if the judgment has been the subject of a judgment by this Court.
I believe this is so because the original judgment has been superseded and is
thus not subject to correction. In Grenier, this Court was not required
to consider the proper forum in which to bring a motion under Rule 399 and the
Court did not decide this issue.
[19]
Second, when this Court dismisses an appeal,
this Court has concluded that the judgment below is not vitiated by an error of
law or a palpable and overriding error of fact or mixed fact and law. This
determination is a qualitatively different decision than a decision about whether
the judgment ought to be set aside or varied, not because of any error, but
because the judgment has been shown to be flawed based on matters discovered
after the judgment was made.
[20]
The person best placed to decide whether the
newly discovered matters would have affected the original judgment is the
original decision-maker.
[21]
Finally, Rule 59.06(2) of the Rules of Civil
Procedure, R.R.O. 1990, Reg. 194, permits a Court to set aside or vary an
order “on the ground … of facts arising or discovered
after it was made.” This Rule has been similarly construed by the Courts
of Ontario to require that motions to vary be brought before the Court that
pronounced the judgment in issue (see, for example, Mehedi v. 2057161
Ontario Inc. (Job Success), 2014 ONCA 604, 123 O.R. (3d) 73; Aristocrat
v. Aristocrat (2004), 73 O.R. (3d) 275, 190 O.A.C. 327).
[22]
This conclusion is also consistent with Royal
Trust Company v. E.M. Jones, [1962] S.C.R. 132, 31 D.L.R. (2D) 292. There, the
Supreme Court held that when a judgment has been affirmed by an intermediate
court of appeal, any subsequent proceeding to set aside the judgment is
properly brought in the trial court. In my view, this determination has equal
application to a motion to vary a judgment.
[23]
It follows that the motion for variation was
properly brought in the Federal Court and the motion for variation in this
Court should be dismissed on that basis.
[24]
A final note. This appeal and motion highlight
the difficulties that ensue when inconsistent findings are made in parallel
infringement and section 8 proceedings. I can only repeat Justice Sharlow’s
admonition on the prior appeal to the effect that it will be for the Judge
hearing “the infringement action to ensure that
overall, taking both proceedings together, a party is compensated for its provable
loss, if any, on proper principles, no more and no less.”
Conclusion
[25]
For these reasons I would dismiss the appeal
from the order of the Federal Court with costs and dismiss the motion for variation
of the judgment of this Court with costs.
[26]
A copy of these reasons shall be put on Court
Files A-187-12 and A-311-15.
“Eleanor R. Dawson”
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