Date: 20020614
Docket: T-1337-99
Neutral citation: 2002 FCT 667
Ottawa, Ontario, this 14th day of June 2002
PRESENT: THE HONOURABLE MADAM JUSTICE LAYDEN-STEVENSON
BETWEEN:
NOVARTIS PHARMACEUTICALS CANADA INC. and
NOVARTIS AG,
Applicants,
- and -
APOTEX INC. and
THE MINISTER OF HEALTH,
Respondents.
REASONS FOR ORDER AND ORDER
LAYDEN-STEVENSON J.
[1] The applicants, Novartis Pharmaceuticals Canada Inc. et al. (Novartis), on motion, seek an order permitting them to file their evidence in this proceeding and an order directing a schedule governing the prosecution of the proceeding. For ease of reference and clarification, the procedural history will be briefly summarized.
[2] The notice of application, a prohibition proceeding, which I will refer to as "Cyclo 8", is
based upon Apotex's eighth notice of allegation, dated June 10, 1999, alleging non-infringement of certain claims of Canadian patent 1,332,150 (the 150 patent) in relation to the medicine cyclosporine. Novartis commenced this prohibition proceeding on July 23,1999.
[3] Another prohibition application by Novartis, "Cyclo 7", is based upon Apotex's seventh
notice of allegation dated May 28, 1999, alleging invalidity of certain claims of the 150 patent.
[4] On March 3, 2000, a notice of status review issued with respect to the Cyclo 8
application, the applicants not having filed anything further to the Notice of Application. The parties negotiated an agreement regarding the conduct of the proceeding. On May 3, 2000, McKeown J. issued an order as follows:
IT IS ORDERED THAT this application shall be dismissed for delay unless the Applicants and the Respondent Apotex Inc.,file and serve a notice of motion to implement the matters set out on page 2 of the letter from Gowling, Strathy & Henderson dated April 13, 2000 to the Federal Court on or before May 31, 2000.
In accordance with that order, by notice of motion dated May 31, 2000, Novartis requested an order staying the Cyclo 8 proceeding pending the resolution of the Cyclo 7 proceeding as well as an order extending the 24-month period [as provided by paragraph 7 (1) (e) of the Patented Medicines (Notice of Compliance) Regulations SOR/93-133 as amended, SOR/98-166] for a period equal to the length of the stay. Apotex consented to the requested relief.
[5] By order of Prothonotary Madam Aronovitch dated June 7, 2000, it was ordered that:
Court File T-1337-99 [Cyclo 8] is stayed pending the resolution of Court File
T-1266-99 [Cyclo 7] and
The 24-month period is extended for the period of time equal to the length of the stay ordered in paragraph 1.
[6] The Cyclo 7 application was dismissed by the Federal Court Trial Division on October
18, 2001. Novartis has appealed the decision. On October 22, 2001, Apotex, on motion, sought an order dismissing the Cyclo 8 proceeding or, in the alternative, an order requiring Novartis to file a notice of discontinuance. By order dated November 1, 2001, per Kelen J., the motion was dismissed with costs. The decision was not appealed but on November 30, 2001, Apotex filed another motion requesting that the stay of the Cyclo 8 proceeding be dissolved and that the proceeding be dismissed on the grounds that it was frivolous, vexatious or an abuse of process. On March 20, 2002, Prothonotary Madam Aronovitch dissolved the stay, on consent of Novartis, but otherwise denied the motion with costs. The decision of Prothonotary Madam Aronovitch has been appealed.
[7] Novartis, on April 19, 2002, filed the within motion. The respondent Apotex rigorously
opposes the granting of the requested relief. The Apotex argument can be consolidated and summarized by reference to three paragraphs in its Written Representations. The paragraphs provide as follows:
Almost three years after its commencement, Novartis now moves for an Order permitting it to file its evidence in this proceeding. Moreover, Novartis brings this motion over six months after Mr. Justice Blais dismissed the proceeding in Court File No. T-1266-99 [Cyclo 7] five and a half months after the Order of Justice Kelen and over four months after Novartis agreed to lift the stay of this proceeding.
Strikingly, Novartis brings this motion without now, or ever, offering any explanation for its failure to meet the deadlines imposed by the Federal Court Rules. It is respectfully submitted that the Court cannot grant the relief sought unless Novartis satisfies the test for an extension under the Federal Court Rules, and is able to convince the Court that it ought now, approximately 15 months out of time (excluding the stay period), to be entitled to file its evidence.
Since Novartis has adduced no evidence whatsoever on this motion to satisfy the test that must be met before an extension of time under the Federal Court Rules can be granted, it is respectively submitted that Novartis' motion must fail.
[8] If Apotex is correct, it will have achieved on this motion what it failed to achieve on its
previous motions seeking the dismissal of the Novartis proceeding.
[9] Despite the articulate submissions of Apotex, many of which centred on issues previously
determined by the orders of Justice Kelen and Prothonotary Aronovitch, for the reasons which follow, I agree with the applicants' position and procedure.
[10] The Apotex argument fails to acknowledge the significance and consequences of the
status review and the order staying the proceeding.
[11] Rule 380 subsections (1)(b) and (2) of the Federal Court Rules, 1998, SOR/98-106
provide that where 180 days have passed since a notice of application was issued and a requisition for hearing has not been filed, a status review will be conducted on the basis of written submissions. It is implicit in Rule 380 that the time limits prescribed by the Rules have not been met. Were it otherwise, there would be no need for a status review. An order, which is made following a status review, operates prospectively and once the order issues, the time limits prescribed by the Rules no longer apply. This is so, irrespective of the nature of the order. Viewed in this context, the argument of Apotex wherein it seeks to revert to and apply the prescribed time limits, pre-status review, cannot be sustained.
[12] With respect to the stay, the meaning of a "stay of proceedings" was discussed by Dickson, C.J. in R. v. Jewitt, [1985] 2 S.C.R. 128 at 137:
A stay of proceedings is a stopping or arresting of a judicial proceedings by the direction or order of a court. As defined in Black's Law Dictionary (5th ed. 1979), it is a kind of injunction with which a court freezes its proceedings at a particular point, stopping the prosecution of the action altogether, or holding up some phase of it. A stay may imply that the proceedings are suspended to await some action required to be taken by one of the parties as, for example, when a non-resident has been ordered to give security for costs. In certain circumstances, however, a stay may mean the total discontinuance or permanent suspension of the proceedings.
[13] Once a stay of proceedings is ordered, the parties are precluded from taking any further
steps in the matter. This remains the case unless and until such time as the stay is vacated or dissolved. Upon dissolution of the stay, by operation of law, the proceeding is re-instated to the point or stage that existed at the time the stay was initially ordered.
[14] Here, Apotex requested that the stay be dissolved and Novartis consented. Since the order from a status review operates prospectively thereby rendering the prescribed time limits inapplicable, upon the dissolution of the stay, the applicants should have sought the directions of
the Court regarding the prosecution of the proceeding. However, concurrent with the request and consent for dissolution of the stay in this case, the respondent, Apotex, moved to have the application dismissed. Apotex was unsuccessful. The combined effect of the status review, the stay order and the order denying the Apotex motion to dismiss, renders it unnecessary for Novartis to seek an extension of time to file the applicants' affidavits. However, in view of my earlier finding with respect to the appropriate course of action, it would have been inappropriate for Novartis to have forged ahead with the filing of affidavits without first seeking directions from the Court.
[15] The Novartis motion was timely and I conclude that the motion requesting permission to
file affidavits and seeking directions for a schedule governing the prosecution of this proceeding is appropriate and proper. I emphasize that this conclusion is fact specific and is confined to the very unique and unusual circumstances that exist here.
[16] Counsel for Novartis informed the Court that the applicants' affidavits are ready for
filing. There is, therefore, no need to allow two weeks for filing as initially requested by the applicants.
ORDER
IT IS THEREFORE ORDERED that:
1) The applicants shall serve and file their evidence in this proceeding within 3 days of the date of this order;
2) The respondents shall serve and file their evidence within 30 days of the service of the applicants' evidence;
3) Cross-examinations shall be completed within 60 days of the service of the respondents' evidence;
4) The applicants' record shall be served and filed within 30 days of completion of the cross-examinations;
5) The respondents' record shall be served and filed within 30 days of the service of the applicants' record.
Costs will be costs in the cause.
___________________________________
Judge
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1337-99
STYLE OF CAUSE:
NOVARTIS PHARMACEUTICALS CANADA INC. ET AL
-and-
APOTEX INC. ET AL
PLACE OF HEARING: OTTAWA, ONTARIO
DATE OF HEARING: JUNE 4, 2002
REASONS FOR ORDER AND ORDER OF THE HONOURABLE MADAM
JUSTICE LAYDEN-STEVENSON
DATED: JUNE 14, 2002
APPEARANCES:
MR. RICHARD G. DEARDEN FOR APPLICANTS
MS. JENNIFER WILKIE
MR. ANDREW BRODKIN FOR RESPONDENTS
MS. NATHALIE BUTTERFIELD APOTEX INC.
SOLICITORS OF RECORD:
GOWLING LAFLEUR HENDERSON LLP FOR APPLICANTS
OTTAWA, ONTARIO
GOODMANS LLP FOR RESPONDENTS
TORONTO, ONTARIO APOTEX INC.
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