Date: 20021210
Docket: T-2520-93
Neutral citation: 2002 FCT 1284
BETWEEN:
RICHTER GEDEON VEGYÉSZETI GYAR RT
Plaintiff
- and -
APOTEX INC.
Defendant
REASONS FOR ORDER
GIBSON J.
Introduction
[1] These reasons arise out of an appeal by way of motion from an order of Prothonotary Aronovitch, dated the 8th of January, 2002, ordering the defendant to:
...produce samples of the Famotidine that the defendant produced pursuant to the Order of Mr. Justice Lutfy dated December 4, 2000 and which were marked as Exhibit 8 to the discovery of Dr. Sherman on June 27, 2001, in amounts no greater than are necessary to allow the plaintiff to carry out the tests or take the measurements described in the plaintiff's motion herein and more specifically, at paragraph 19 of the Avisar Affidavit dated September 24, 2001. The samples shall be produced no later than February 5, 2002, or at such other date as the parties may agree to.
[2] The applicant (the "defendant") seeks an order reversing the order of Prothonotary Aronovitch and dismissing the plaintiff's motion for the production of samples pursuant to Rule 249, and other relief, including costs throughout.
[3] While Prothonotary Aronovitch did not provide separate reasons for her order that is under appeal (the "Order under appeal"), she did include within her order a four paragraph endorsement. For ease of reference, that endorsement is attached as a schedule to these reasons.
Background
[4] This action was commenced by statement of claim filed the 26th of October, 1993. The plaintiff alleges, in the latest iteration of its Statement of Claim, infringement by the defendant of the plaintiff's Canadian Letters Patent No.1 263 120, 1 265 809, and 1 266 277 relating to processes for the preparation of Famotidine. By the latest iteration of its statement of defence, the defendant admits that it has had made for it Famotidine and further admits that it has offered for sale and sold in Canada Apo-Famotidine, which contains as the active ingredient Famotidine, but denies that its Famotidine is characterized by certain of the properties set out in the Statement of Claim.
[5] By motion dated the 29th day of October, 1999, the plaintiff sought an order:
... requiring the Defendant to provide samples of USP Famotidine and Famotidine from the batches listed in Defendant's Production Document[s] 208 and 213 which are in the possession of the Defendant so that measurements can be taken by the Plaintiff of the characteristics of the Famotidine;
[6] By order dated the 19th of April, 2000[1], Prothonotary Lafrenière dismissed the plaintiff's motion. No written reasons were, or endorsement was, provided.
[7] Prothonotary Lafrenière's decision was appealed. The appeal was dismissed by the Associate Chief Justice by order dated the 4th of December, 2000[2]. The Associate Chief Justice's order contained the following recitals, among others:
...
UPON the parties' acknowledgment that the Prothonotary's Order reflected his decision, communicated orally in open court, to dismiss the Motion after balancing the parties' respective affidavit evidence: Upjohn Co. v. Apotex Inc. (1993), 53 C.P.R. (3d) 507 (F.C.T.D.) at 510;
UPON the exercise by Prothonotary Lafrenière of his discretion in the adjudication of the plaintiff's motion, pursuant to Rule 249;
UPON the absence of any evidence in support of the Motion that the Prothonotary's Order raises questions vital to the final issue of this case: Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (C.A.) at 444-45, 454 and 462-463;
UPON the Court's satisfaction that any evidentiary limitation imposed on the plaintiff as the result of the Prothonotary's Order is not "vital" to the final issue of the case within the meaning of Aqua-Gem Investments Ltd., particularly at pages 444-45;
UPON the Court's satisfaction that the standard of review on this Motion is whether the Prothonotary's Order is clearly wrong, in the sense that the exercise of his discretion was based upon a wrong principle or upon a misapprehension of the facts: Aqua-Gem Investments Ltd.;
UPON the Court's satisfaction that the words "necessary or expedient" ( « nécessaire ou opportun » ) in Rule 249 are to be interpreted in the particular circumstances of each case and are not necessarily limited to "the only means" of obtaining the evidence, particularly with respect to an experiment with a pharmaceutical compound:...;
...
[citations contained in the last quoted recital omitted]
[8] Associate Chief Justice Lutfy's order was not appealed.
[9] By order dated the 14th of November, 2000[3] arising out of a further motion by the plaintiff, Prothonotary Lafrenière, once again without giving reasons, ordered in part:
Apotex is required to produce samples of each commercial lot of famotidine used to make tabletsfor the purpose of performing tests pursuant to Rule 91 and not Rule 249 of the Federal Court Rules. If necessary, the amount is to be determined following disposition of the appeal by the Defendant. [emphasis added]
[10] Once again, Prothonotary Lafrenière's order was appealed to the Associate Chief Justice.
[11] By order dated the 4th of December, 2000[4], the Associate Chief Justice struck the words underlined in the immediately foregoing quotation. The Associate Chief Justice recited the Court's satisfaction that the principle of res judicata was not applicable to the Prothonotary's Order in regard to his earlier order of the 19th of April, 2000. He further recited the Court's satisfaction that Rule 91(2) did not extend to the production of material for the purpose of performing tests but rather was limited to the production of documents and material "for inspection" at an examination for discovery.
[12] Associate Chief Justice Lutfy's order was not appealed.
[13] Also flowing out of Prothonotary Lafrenière's order of the 14th of November, 2000, the defendant was required to provide and did provide answers to a range of questions posed on examination for discovery of representatives of the defendant. Further, samples of the defendant's commercial Famotidine were made available for inspection on the 27th of June, 2001 at the continued discovery of the defendant. On the basis of this "new evidence" and of the results of further discovery on the 27th of June, 2001, the plaintiff brought its third motion for production of samples for testing that resulted in the Order here under appeal.
[14] Following Prothonotary Aronovitch's Order that is under appeal, on the 28th of February, 2002, pursuant to an order of the 5th of December, 2001 to compel further answers arising out of the continued examination for discovery on the 27th of June, 2001, the defendant produced further material that the plaintiff alleges is supportive of an order for production of samples for testing. By order dated the 8th of November, 2002, I granted leave to the plaintiff to file that additional or fresh evidence on this appeal on the ground that I was satisfied that the test for introduction of fresh evidence on an appeal reflected in paragraph 6 of the reasons of Justice Binnie in Public School Boards' Assn. of Alberta v. Alberta (Attorney General)[5] was met.
The Issues
[15] The issues before me on this appeal were the following: first, standard of review; secondly, error of law in the decision under appeal; and thirdly, assuming no error of law, reviewable error in the Prothonotary's exercise of discretion.
Analysis
1) Standard of Review
[16] In Canada v. Aqua-Gem Investments Ltd.[6], Justice MacGuigan wrote at pages 462-3:
I also agree with the Chief Justice [who dissented in part] in part as to the standard of review to be applied by a motions judge to a discretionary decision of a prothonotary. Following in particular, Lord Wright in Evans v. Bartlam, [1937] A.C. 473 H.L. ... and Lacourcière J.A. in Stoicevski v. Casement, 43 O.R. (2d) 436..., discretionary orders of prothonotaries ought nought to be disturbed on appeal to a judge unless:
(a) they 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 facts, or
(b) they raise questions vital to the final issue of the case.
Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo. [some elements of citations omitted]
[17] Before me, counsel for the defendant urged that Prothonotary Aronovitch both erred in law in determining that the principle of res judicata did not apply on the motion before her and erred in a reviewable manner in her exercise of discretion.
[18] In Microfibres Inc. v. Annabel Canada Inc.[7], I adopted the words of Justice Rothstein in Sawridge Band v. Canada[8] in application to discretionary decisions of case management prothonotaries. Prothonotary Aronovitch was acting as a case management Prothonotary when she made the Order here under appeal. Those words of Justice Rothstein are the following:
We would take this opportunity to state the position of this Court on appeals from orders of case management judges. Case management judges must be given latitude to manage cases. This Court will interfere only in the clearest case of a misuse of judicial discretion. This approach was well stated by the Alberta Court of Appeal in Korte v. Deloitte, Haskins, and Sells, ... and is applicable in these appeals. We adopt these words as our own:
This is a very complicated lawsuit. It is the subject of case management and has been since 1993. The orders made here are discretionary. We have said before, and we repeat, that case management judges in those complex matters must be given some "elbow room" to resolve endless interlocutory matters and move these cases on to trial. In some cases, the case management judge will have to be innovative to avoid having the case bog down in a morass of technical matters. Only in the clearest cases of misuse of judicial discretion will we interfere. In this case, the carefully crafted orders made by the case management judge display sound knowledge of the rules and the related case law. In particular, the order contains a provision that the parties are free to return to the case management judge for relief from the imposition of any intolerable burden imposed by the order. No clear error has been shown and we decline to interfere. While there may be some inconvenience to some of the parties, this does not translate into reversible error. We are not here to fine tune orders made in interlocutory proceedings, particularly in a case such as this one. [citation omitted, emphasis added]
[19] It is against these principles that the following analysis is conducted.
2) Error of Law
[20] Prothonotary Aronovitch determined that, "... in the instant circumstances, ..." the principle of res judicata did not apply to bar the motion before her, this notwithstanding that production of samples for testing under the authority of Rule 249 had previously been denied by a Prothonotary whose decision was upheld on appeal and that provision of samples pursuant to Rule 91 for testing had been ordered by a Prothonotary whose order in that respect was reversed on appeal. She determined that a seminal authority on res judicata, Town of Grandview v. Doering [9], could be distinguished on the facts. In Town of Grandview, both Justice Ritchie for the majority and Justice Pigeon, more indirectly, for the minority relied upon the reasons of Vice-Chancellor Wigram in Henderson v. Henderson[10] where he wrote:
... I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence might have brought forward at the time.
[21] The references in the forgoing quotation to "special circumstances" and "special cases" would appear to interrelate with the references to negligence, inadvertence, or even accident and reasonable diligence on the part of the party against whom res judicata is being claimed. The principle is cited in different words by Justice Winkler in Toronto-Dominion Bank v. Leigh Instruments Ltd. (Trustee of) [11] where he quotes with approval the following from the reasons of Lord Denning M.R. in Fidelitas Shipping Co. v. V / O Exportchleb [12]:
The rule then is that, once an issue has been raised and distinctly determined between parties, then, as a general rule, neither party can be allowed to fight that issue all over again. The same issue cannot be raised by either of them again in the same or subsequent proceedings except in special circumstances; [emphasis added]
Justice Winkler provides the following rationale for the principle from the reasons of Justice Macdonald in Ward v. Dana G. Colson Management Ltd.[13] where she wrote:
In my view, the courts should depart from the principles expressed by Lords Denning and Diplock in extremely rare circumstances. The reasons for this are obvious. A party to a proceeding, if granted a second chance to raise what was already before the court, undermines the integrity of the rules which guide the conduct of litigation. There has to be certainty and finality of the disposition of matters by the courts. Otherwise, the results would be chaotic.
[22] Justice Hugessen commented on the principle of res judicata in Paszkowski v. Canada[14] where he wrote at paragraphs 3 and 4:
The plaintiff says that that is res judicata to which Mr. Lester replies no, it cannot be res judicata because it is an interlocutory order and, of course, is subject to further review. And in my opinion they are both right. It seems to me that what one has to ask oneself when asking whether or not there is res judicata is: "what did the Court actually decide the first time around?" Here, there is no doubt that the Court, the first time around, actually decided that on the material before it, at that time, the plaintiff had a serious case to be argued. That is incompatible with any finding that the action is frivolous, vexatious or an abuse of process.
That decision is not res judicata in the sense that it was open to the defendant to move for summary judgment and will remain open to the defendant at trial to lead other evidence and to bring further arguments to bear which may persuade a judge that the action should be dismissed. It is res judicata in the sense that no application can be made today based on the same materials as were before Mr. Justice Rouleau inviting the Court to arrive at a contrary conclusion to the one reached by him. [emphasis added]
[23] The materials that were before Prothonotary Aronovitch were not the "same materials" as were before Prothonotary Lafrenière on the earlier motion for testing under Rule 249. Further, I am satisfied that the reason additional materials that were before Prothonotary Aronovitch were not before Prothonotary Lafrenière had nothing to do with any negligence, inadvertence or even accident on the part of the plaintiff. Equally, I am satisfied that the plaintiff was throughout acting with reasonable diligence in an effort to obtain the additional materials that finally came before Prothonotary Aronovitch and, more recently, have come before me. The record of this proceeding, I am satisfied, supports this conclusion.
[24] Counsel for the defendant urged that I should examine the qualitative value of the new materials that are now before the Court and, in particular, the fact that none of them have been brought forward under the affidavit of an expert who could attest to their qualitative value. I reject this argument. There will be a time and place for that qualitative assessment and I am satisfied that that time and place is at trial, assuming that this action reaches trial.
[25] While I would reach by a different route the conclusion that Prothonotary Aronovitch reached regarding the inapplicability of res judicata to the motion that was before her, I would nonetheless reach the same conclusion. I am satisfied that this is a case which falls within the "special circumstances" alluded to by Vice-Chancellor Wigram is Henderson v. Henderson[15], and is a "special case" constituting an exception to the application of the principle of res judicata. Put another way, I am satisfied that Prothonotary Aronovitch made no error of law in determining to order the production of samples for testing. It was open to the defendant to resist providing certain answers, certain samples and certain data on examination for discovery where it was advised to do so. That the Court reached a different conclusion and ordered answers and production of samples and data and that those answers and that data cast a different light on the issue of production of samples for testing was not capable of being known at the time of the first motion before Prothonotary Lafrenière. When it became known, it was not then open to the defendant to urge that the issue of production of samples for testing, determined on the basis only of evidence that was then available by reason of the tactics of the defendant, was res judicata.
3) The Prothonotary's exercise of discretion
[26] Rule 249(1) of the Federal Court Rules, 1998[16] reads as follows:
|
249. (1) On motion, where the Court is satisfied that it is necessary or expedient for the purpose of obtaining information or evidence in full, the Court may order, in respect of any property that is the subject-matter of an action or as to which a question may arise therein, that
(a) a sample be taken of the property;
(b) an inspection be made of the property; or
(c) an experiment be tried on or with the property.
|
249. (1) La Cour peut, sur requête, si elle l'estime nécessaire ou opportun pour obtenir des renseignements complets ou une preuve complète, ordonner à l'égard des biens qui font l'objet de l'action ou au sujet desquels une question peut y être soulevée :
a) que des échantillons de ces biens soient prélevés;
b) que l'examen de ces biens soit effectué;
c) que des expériences soient effectuées sur ces biens ou à l'aide de ceux-ci.
|
The critical words regarding the test for production of samples for testing are that the Court be "satisfied" that it is "necessary" or "expedient" ("l'estime nécessaire ou opportun") for the purpose of obtaining information or evidence in full. Where the Court is so satisfied, it then has a discretion to order production of samples for testing. That is the issue that was before Prothonotary Aronovitch. She determined to exercise her discretion in favour of production of samples.
[27] In P.J. Wallbank Manufacturing Co. Ltd. v. Kuhlman Corporation[17], the Court of Appeal reversed a decision of a trial judge to allow an inspection of premises and of methods and machines on the premises, under the predecessor of Rule 249(1) which was in essentially the same terms as the current Rule. The Court of Appeal noted that the trial judge's order would have involved a "serious intrusion upon the appellant's premises and a danger of irreparable harm to the appellant in the discovery of its know-how to a business competitor". It concluded that the order in question was not "necessary" at the stage that the action at issue had reached.
[28] The Court of Appeal reached a similar conclusion in Posi-Slope Enterprises Inc. v. Sibo Inc. et al.[18] and refused to order inspection of a machine "without prejudice to [the applicant's] right to bring a new application at a later stage."
[29] Associate Chief Justice Jerome, in Poly Foam Products Ltd. v. Cascades Sentinel Ltd.[19], expressed concern for the position reflected by the foregoing decisions which he described as representing a "very strict test". He concluded his expression of concern with the following passage:
Why then should we not take the approach that if I were presiding at the Trial and came to the impasse that exists here, would an inspection be beneficial? In resolving this matter, would I benefit from an inspection?
My answer is yes, and I see no reason not to order the inspection now.
[30] Justice Evans, then of the Trial division of this Court, would appear to have adopted a line of reasoning closer to that of Associate Chief Justice Jerome in Glaxo Group Ltd. v. Novopharm Ltd.[20] where he wrote at paragraph [4] of his reasons:
On the evidence before me I am satisfied that Novopharm is entitled to an order requiring Glaxo to produce samples of the materials for experiments or batches from the years in question. An analysis of the samples will provide evidence of whether particular properties of form 2 are attributable to impurities or are inherent in form 1, and will be relevant to the defences of obviousness and "no new substance" raised by Novopharm. Moreover, unless Novopharm can conduct its own analysis, it will be dependent on the results reported by Glaxo. [emphasis added]
The last sentence of the foregoing quotation is among the principle arguments made on behalf of the plaintiff in support of production of samples for testing in this matter.
[31] On the basis of the evidence that was before Prothonotary Aronovitch when she made the Order here under appeal, and in light of the foregoing authorities, I conclude that the learned Prothonotary made no reviewable error in exercising her discretion under Rule 249(1) as she did. Against the standard of review of such an exercise of discretion as enunciated in Aqua-Gem[21], and having regard to my own reasoning in Microfibres Inc.[22], I find no basis on which to interfere with the decision under appeal. No clear case of misuse of judicial discretion has been demonstrated.
Conclusion
[32] On the basis of the foregoing analysis, this appeal by way of motion from the decision of Prothonotary Aronovitch dated the 8th of January, 2002, ordering, pursuant to Rule 249, production of samples of Famotidine for testing from the samples that the defendant produced pursuant to an earlier order of Associate Chief Justice Lutfy, will be dismissed.
Costs
[33] The plaintiff shall have its costs of this appeal by way of motion, in any event of the cause.
____________________________
J.F.C.C.
Ottawa, Ontario
December10, 2002
SCHEDULE
ENDORSEMENT
Having regard to the defendant's argument of res judicata, I am satisfied that in the instant circumstances, the principle does not apply to bar the present motion. In my view, plaintiff is not estopped by the application of the orders of the Associate Chief Justice dated December 4, 2000, (on appeal of Prothonotary Lafrenières'[sic] orders of April 19, 2000 and November 14, 2000) from bringing the current application for the production of samples for testing. Neither order is made with prejudice or in my view, in a manner to preclude a further, properly founded application, pursuant to Rules 249 and 57(1)(b) of the Patent Act, R.S., c. P-4, s. 1.
The Town of Grandview v. Doering (1975), 61 D.L.R. (3d) 455 (S.C.C.), on which the defendant principally relies, may be distinguished on its facts. I take it that the inspection and testing of samples is to be considered in the context of the discovery process, having regard for the circumstances of the particular case, including whether further discoveries are susceptible of yielding the required information. (Leesona Corp. v. Montreal Throwing Co. Ltd. (1975) 19 C.P.R. (2d) 72 (F.C.T.D.) at page 75; Poly Foam Products Ltd. v. Cascades Sentinel Ltd. (1990), 31 C.P.R. (3d) 11 (F.C.T.D.) at pages 12 and 13; Valley Towing Ltd. v. Celtic Shipyards (1988) Ltd. (1995), unreported decision of Hargrave, Prothonotary dated August 22, 1995 (F.C.T.D.); [1995] F.C.J. No. 1135) at pages 2 and 3 and AMFAC Foods Inc. et al. v. C. M. McLean Ltd. (1980) 49 C.P.R. (2d) 74 (F.C.T.D.) at pages 75 and 76).
On the merits of the motion, having considered the evidence before me, including the expert evidence on which Apotex relies, the affidavit evidence of Mr. Avisar and the transcript of the cross-examination of Bernard Sherman dated June 27, 2001, I am satisfied that the plaintiff has demonstrated its entitlement to the requested samples in order to directly and satisfactorily determine whether Apotex's Famotidine has the three claimed properties which characterize Form B Famotidine, as described at paragraph 2 of the Avisar affidavit, dated September 24, 2001. (Glaxo Group Ltd. v. Novopharm Ltd., [1999] F.C.J. No. 381 (T.D.).
While I will order that the minimum required amount be produced, I am satisfied that the 1 gram requested by the plaintiff can be produced without inconvenience to the defendant. (See paragraph 5 of the Gingras affidavit, executed December 13th of 1999).
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
COURT NO: T-2520-93
STYLE OF CAUSE: RICHTER GEDEON VEGYÉSZETI GYAR RT
Plaintiff - and -
APOTEX INC.
Defendant
DATE OF HEARING: November 25, 2002
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR ORDER BY: GIBSON J.
DATED: December 10, 2002
APPEARANCES BY:
DIMOCK, R.E. For the Plaintiff
ANDREW BRODKIN
RICHARD NAIBERG For the Defendant
SOLICITORS OF RECORD:
Johnston Avisar For the Plaintiff
Toronto, Ontario
Bill W.K. Chan
(416)867-1661
H.B. Radomski For the Defendant
Andrew R. Brodkin
Goodmans LLP
Toronto, Ontario
[1] Defendant's Motion Record, Volume II, Tab 4-C.
[2] Defendant's Motion Record, Volume III, Tab 4-F.
[3] Defendant's Motion Record, Volume III, Tab 4-I, Schedule " 5".
[4] Defendant's Motion Record, Volume IV, Tab 4-L.
[6] [1993] 2 F.C. 425 (C.A.).
[7] (2001), 16 C.P.R. (4th) 12 (T.D.).
[8] (2001), 283 N.R. 112 (F.C.A.).
[11] (1997), 35 O.R. (3d) 273.
[12] [1965] 2 All E.R. 4.
[13] (1994), 24 C.P.C. (3d) 211 (Ont. Gen. Div.); affirmed [1994] O.J. No. 2792 (O.C.A.)
[14] (2001), 11 Imm. L.R. (3d) 286 (T.D.).
[17] (1980), 50 C.P.R. (2d) 145, [1981] 1 F.C. 645 (C.A.).
[18] (1984), 1 C.P.R. (3d) 140 (C.A.).
[19] (1989), 31 C.P.R. (3d) 11 (T.D.).
[20] [1999] F.C.J. No. 381, (online: QL)(T.D.).
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