Dockets:
A-460-11
Citation: 2014 FCA 65
CORAM:
SHARLOW J.A.
DAWSON J.A.
MAINVILLE J.A.
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BETWEEN:
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SANOFI-AVENTIS CANADA INC. and
SANOFI-AVENTIS DEUTSCHLAND GmbH
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Appellants
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and
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TEVA CANADA
LIMITED
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Respondent
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REASONS
FOR JUDGMENT
MAINVILLE J.A.
[1]
This appeal was heard together with two other appeals in
dockets A-147-12 and A-192-12 with respect to an action commenced by Teva
Canada Limited (“Teva”) seeking compensation from Sanofi-Aventis Canada Inc.
and Sanofi-Aventis Deutschland GmbH (collectively referred to herein as
“Sanofi”) pursuant to section 8 of the Patented Medicines (Notice of
Compliance) Regulations, SOR/93-133 (“NOC Regulations”) with respect
to the drug ramipril.
[2]
This Court has concurrently issued judgments and
reasons for judgment with respect to the two other appeals in dockets A-147-12
and A-192-12 bearing respectively citation numbers
2014 FCA 67 and 2014
FCA 69.
[3]
This appeal is from an order of Snider J. of the
Federal Court (“Trial Judge”) dated November 25, 2011 which dismissed Sanofi’s
appeal from an order of Prothonotary Aalto dated October 12, 2011 denying its
motion seeking amendments to its statement of defence to include allegations
respecting the two following issues.
[4]
The first amendment sought to assert that in the
hypothetical market which had to be established to determine the level of
compensation owed under section 8 of the NOC Regulations, Pharmascience
Inc. (“Pharmascience”) would have been the first generic drug manufacturer to
enter the generic ramipril market. The second amendment sought to add to the
statement of defence that the HOPE indications (Heart Outcomes Prevention
Evaluation i.e. use of ramipril in the prevention of cardiovascular
events and of stroke, diabetes and congestive heart failure) for Teva’s generic
version of ramipril was a significant unapproved indication, and that section 8
of the NOC Regulations does not contemplate recovery of damages with
respect to loss sales of a generic drug product for such an unapproved
indication.
[5]
For the reasons set out below, I would dismiss this
appeal.
The decisions below
[6]
At the time it submitted its motion for amendments to
its defence in the Teva litigation, Sanofi was also involved in additional
litigation concerning ramipril and section 8 of the NOC Regulations with
other generic drug manufacturers, notably Laboratoire Riva Inc. and Apotex Inc.
Sanofi sought similar amendments in all three proceedings, and all these motions
were heard and decided together by Prothonotary Aalto.
[7]
Prothonotary Aalto noted that Sanofi had sought these
amendments to its pleadings (with a related motion to examine a representative
of Pharmascience) some three months prior to the trials in both the Teva and
Apotex proceedings. The prothonotary also noted that Sanofi had cast the two
amendments in dispute as mere “clarifications” or house keeping amendments.
[8]
After a careful review of the parties’ submissions, Prothonotary
Aalto took the view that, contrary to Sanofi’s representations, both suggested
amendments added new, substantial and largely speculative allegations. The prothonotary
further took into account the late timing of the amendments relative to the
then-looming trial dates, and concluded that Teva would be prejudiced by the
real risk of having the trial adjourned as a result of the need to alter expert
reports which had already been exchanged between the litigants.
[9]
Reviewing the prothonotary’s decision de novo, the
Trial Judge dismissed Sanofi’s appeal for essentially the same reasons as those
given by the prothonotary. The Trial Judge concluded, in light of all the
circumstances, that the interests of justice would not be served by allowing
the amendments.
The standard of review
[10]
The standard of review to be applied to a discretionary
order of a prothonotary has been conclusively established by this Court in Canada
v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (F.C.A.) and in Merck
& Co. v. Apotex Inc., 2003 FCA 488, [2004] 2 F.C.R. 459 at paras. 17 to
20, and confirmed by the Supreme Court of Canada in Z.I. Pompey Industrie v.
ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450 at para. 18: such an order
is not to be disturbed unless (a) the question raised in the motion is vital to
the final issue of the case, or (b) the order is clearly wrong, in the sense
that the exercise of discretion by the prothonotary was based on a wrong
principle of law or a misapprehension of the facts. In turn, this Court
may interfere with the decision of a Federal Court judge dismissing an appeal
from a discretionary order of a Prothonotary only if judge’s decision is clearly
wrong.
[11]
In this case, the Trial Judge found it difficult to
assess whether the proposed amendments were vital to the final issue of the
case in light of Sanofi’s inconsistent arguments concerning the nature of its
amendments. As noted in the Trial Judge’s order at pp. 4 and 5: “[o]n the one
hand, they submit that these amendments to the pleadings are critical to their
defence. On the other hand, they argue that the amendments are minor and, in
the case of the HOPE amendment, merely set out a legal issue that does not even
need to be pleaded.” Out of an abundance of caution, the Trial Judge assumed,
without deciding, that the prothonotary’s decision to refuse the amendments was
vital, and she thus proceeded to review the matter de novo.
[12]
Before this Court, Sanofi (which has since changed
counsel) now submits that the amendments were vital to its defence. Like the
Trial Judge, I will assume, without deciding, that the amendments were vital.
Principles applicable to amendments
[13]
The Federal Courts Rules, SOR/98-106 govern amendments to
pleadings through Rules 75 to 79 as well as in Rules 200 and 201. These rules provide
for a liberal approach to amendments. After extensively reviewing the
jurisprudence of this Court, Décary J.A. set out the applicable principles in Canderel
Ltd. v. Canada, [1994] 1 F.C. 3 (C.A.) at p. 10: “while it is impossible to
enumerate all the factors that a judge must take into consideration in
determining whether it is just, in a given case, to authorize an amendment, the
general rule is that an amendment should be allowed at any stage of an action
for the purpose of determining the real questions in controversy between the
parties, provided, notably, that the allowance would not result in an injustice
to the other party not capable of being compensated by an award of costs and
that it would serve the interests of justice.”
[14]
Though recognizing these well-known and long settled principles, Sanofi
nevertheless submits that “pleading amendments should be permitted at any time,
including on the eve of trial or even during trial, provided that allowing the
amendment would not be unjust”: Sanofi’s memorandum at para. 21. Relying on VISX
Inc. v. Nidex Co. (1998), 234 N.R. 94, [1998] F.C.J. No. 1766 (QL) (F.C.A.),
Sanofi holds that amendments to pleadings should be granted even where there is
deplorable and careless delay.
[15]
In my view, Sanofi fails to take into account that there are at least two
independent criteria that must be met to allow an amendment: (a) any injustice
to the other party is capable of being compensated by an award of costs, and
(b) the interests of justice would be served. Failure to meet one or the other
of these criteria may result in the amendment being refused.
[16]
The criterion based on the interests of justice notably allows a Court
to consider factors related to the proper and efficient administration of
justice: Merck & Co. v. Apotex Inc., above at para. 35-36 and 42. As
noted by Lord Griffiths in Ketterman v. Hansel Properties Ltd., [1988] 1
All E.R. 38 (H.L.) at p. 62 (cited approvingly by this Court in Merck &
Co. v. Apotex Inc., above at para. 30):
Another factor that
a judge must weigh in the balance is the pressure on the courts caused by the
great increase in litigation and the consequent necessity that, in the
interests of the whole community, legal business should be conducted
efficiently. We can no longer afford to show the same indulgence towards the
negligent conduct of litigation as was perhaps possible in a more leisured age.
There will be cases in which justice will be better served by allowing the
consequences of the negligence of the lawyers to fall on their own heads rather
than by allowing an amendment at a very late stage of the proceedings.
[17]
The judge deciding upon a motion to allow an amendment to the pleadings
must, as a general rule, consider the timeliness of the motion, the extent to
which the proposed amendment would delay the proceedings, and the manner in
which the party who seeks the amendment has comported itself throughout the
proceedings: Canderel Ltd. v. Canada, above at p. 11; Bristol-Myers
Squibb Co. v. Apotex Inc., 2011 FCA 34, 414 N.R. 162 at para. 37. Monetary
compensation to the other litigants through costs awards, even where possible,
is thus not the only factor that must be considered and weighed. Also included
in the balancing exercise is the efficiency of the judicial process itself.
Analysis
[18]
The Trial Judge rightfully found that Sanofi’s proposed Pharmascience
amendment was brought on the “eve of the trial with no credible explanation for
the lateness” and that Sanofi “has little excuse for waiting until now to raise
the issue” of its proposed HOPE amendment: Trial Judge’s order at pp. 6 and 7.
Sanofi submitted no explanation for its tardiness to either the Trial Judge or
to this Court. The inference that must be drawn from this is that there is no acceptable
explanation.
[19]
As I have already noted, the timing of a motion to amend is a relevant
factor to be taken into account when considering whether the motion should be
granted. As stated in Canderel Ltd. v. Canada, above at p. 11, “[a]s
regards interests of justice, it may be said that the courts and the parties
have a legitimate expectation in the litigation coming to an end and delays and
consequent strain and anxiety imposed on all concerned by a late amendment
raising a new issue may well be seen as frustrating the course of justice”.
[20]
In this case, not only was the timing of Sanofi’s motion tardy, it also
almost certainly ensured that the trial would be considerably delayed had it
been allowed. In this matter, I adopt the words of Hugessen J. in Montana
Band v. Canada, 2002 FCT 583, [2002] F.C.J. No. 774 (QL) at para. 7:
Every amendment to pleadings will of course cause some
delay but some delays are far more consequential than others. Where one is virtually
on the eve of a lengthy and major trial, whose date has been known and
anticipated for many months, the preparation for which has been the subject of
close and intensive cooperation between counsel and the Court extending over a
period of years and where the issues are many and complex and the proceedings
involve numerous parties, there is simply no way in which an order for costs
could possibly provide adequate compensation for the loss of the trial date.
Indeed, even the attempt to assess the costs that would have been thrown away
by the anticipated delay of this trial would be well-nigh impossible.
[21]
This, in my view, is sufficient to dispose of the appeal.
[22]
I would therefore dismiss the appeal, with costs in favour of Teva.
"Robert M. Mainville"
“I agree.
Karen Sharlow J.A.”
“I agree.
Eleanor R. Dawson J.A.”
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