Date: 20070417
Docket: T-427-06
Citation: 2007 FC 407
Toronto, Ontario, April 17, 2007
PRESENT: The Honourable Mr. Justice de Montigny
BETWEEN:
SOLVAY
PHARMA INC. and ALTANA PHARMA AG
Applicants
and
APOTEX
INC. and THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER AND ORDER
[1]
This is an
appeal by Apotex Inc. (Apotex) from a decision of the case management prothonotary
dated March 27, 2007. The prothonotary granted an extension of time to complete
cross-examination, and set a schedule for the remaining steps in this
proceeding. Apotex is appealing that order only insofar as it allows Altana Pharma
AG (Altana) the opportunity to complete cross-examinations in this matter. It
is not objecting to the remainder of the schedule the prothonotary ordered, particularly
the date set for the hearing of the within application.
[2]
For the
reasons that follow, I have concluded the discretionary order should not be
disturbed, as Apotex has not convinced me the impugned order is clearly wrong.
Background
[3]
On or
about January 18, 2006, Apotex delivered a Notice of Allegation (NOA) pursuant
to section 5 of the Patented Medicines (Notice of Compliance) Regulations
(the Regulations), alleging infringement and validity issues in respect of
Canadian Patent Nos. 2,089,748 and 2,092,694. In response, Altana commenced the
within proceeding seeking an order pursuant to section 6 of the Regulations,
prohibiting the Minister from issuing a Notice of Compliance (NOC) to
Apotex for its proposed pantoprazole product.
[4]
On April
5, 2006, five days before its evidence was due, Altana moved for an extension
of time until October 20, 2006 to file its evidence. The Court refused to
grant the extension, but did extend the time to file the applicants’ evidence
to July 14, 2006. Then, by notice of motion dated June 21, 2006, Altana sought
once again the same extension of time to serve and file its evidence until
October 20, 2006. By order dated June 29, 2006, the prothonotary denied Altana’s
request.
[5]
Altana
then brought an appeal of this order, which was subsequently withdrawn. By
agreement of counsel subsequent to the hearing of the motion, Altana was given
an additional three weeks to serve and file its evidence. As a result, Altana
served Apotex with its evidence on August 4, 2006, which consisted of 14
affidavits from 12 different witnesses.
[6]
By order
dated December 12, 2006, the prothonotary granted Apotex an extension of time,
until January 31, 2007, to serve its evidence on Altana. The order also
permitted Altana to serve one additional affidavit. This order was made upon
the consent of all parties. On January 30, 2007, Apotex served Altana with
affidavit evidence from 11 witnesses.
[7]
Pursuant
to Rule 308 of the Federal Courts Rules (the Rules), all
cross-examinations on affidavits must be completed by all parties within 20
days after the respondent’s affidavits are filed, or the time for doing so has
expired, whichever is earlier. Since Apotex delivered its evidence on January
30, 2007, the period for cross-examinations expired February 19, 2007.
[8]
Pursuant
to Rule 309 of the Rules, an applicant shall serve and file an application
record within 20 days after all parties have completed cross-examinations, or
the time for doing so has expired, whichever is earlier. Since the deadline for
completing cross-examinations was February 19, 2007, the applicants were required
to serve and file an application record by March 12, 2007.
[9]
By notice
of motion dated March 14, 2007, the applicants brought a motion to set a
schedule, which came for a hearing before Prothonotary Martha Milczynski on
March 26, 2007.
The Impugned Order
[10]
By Order
dated March 27, 2007, the prothonotary allowed the applicants’ motion and set a
schedule to govern the remaining steps in this application. The Court ordered
that:
1. Cross-examinations shall be
completed by September 30, 2007;
2. The applicants shall serve and
file their application record and requisition for hearing by October 15, 2007;
3. The respondents’ records shall
be served and filed by November 15, 2007;
4. The hearing of this application
shall take place at the Federal Court in Toronto, 180 Queen Street West, for five (5) days commencing
on December 10, 2007;
5. The costs of this motion are
payable in the cause.
[11]
In so
doing, the prothonotary noted the objection of Apotex’s counsel to granting
Altana any extension of time. She wrote:
Apotex submits that the consequence of
the Applicants’ failure to comply with the Rules in this regard, should
be their loss of any opportunity for cross-examinations, and only as an indulgence,
is Apotex prepared to agree that the Applicants be permitted to file an
Application Record. Apotex submits it is available and the hearing should be
scheduled for June 18, 2007.
[12]
As the
case manager, the prothonotary was well aware of the parties’ conduct. As the
following paragraph of her order reveals, she took that into consideration, as
well as the large number of affidavits filed, in concluding a schedule to
govern the remaining steps was appropriate in the circumstances:
However, in light of the fourteen
affidavits filed by the Applicants, and the eleven affidavits filed by Apotex,
it is highly unlikely to say the least that cross-examinations would or could
have been completed and records filed in the timeframe under Part V of the Rules
following the filing of Apotex’s evidence – for which, I note, Apotex itself
benefited from an extension of time. Nonetheless, it cannot be said the
Applicants have proceeded with all due haste there have been numerous
unsuccessful and duplicative motions for production of Apotex’s pantoprazole
tablets and extensions of time.
Analysis
[13]
An order
to extend time on an application is discretionary. Since it has not been
argued (nor could it be) that such an order is vital to the final issue of the
case, it should not be disturbed on appeal unless it is clearly wrong, “in the
sense that the exercise of discretion by the prothonotary was based upon a
wrong principle or upon a misapprehension of the facts” (Canada v.
Aqua-Gem Investments Ltd. (C.A.), [1993] 2 F.C. 425 at page 454).
[14]
Before
turning to the specific arguments raised by the applicants, it is worth setting
out two overarching principles applicable in the present case. First, there is
no doubt that in the context of proceedings under the Regulations, the
deadlines established under the Rules are of the utmost importance. This is so
because an applicant, as a result of commencing a prohibition proceeding under
the Regulations, obtains what is tantamount to an interlocutory injunction for
up to 24 months without having to justify any of the criteria that would
normally be required before enjoining the issuance of a NOC. As the Federal Court
of Appeal indicated:
The court has a clear duty to deal with
an application expeditiously. Given that, in the scheme of the Regulations, it
is the patentee who has both the carriage of the proceeding and the interest in
its dilatory prosecution, departures from the schedule imposed by the Part V.1
rules ought not be routine.
Bayer AG v. Canada (Minister of National Health
and Welfare)
(1993), 51 C.P.R. (3d) 329, at page 337.
See also: Merck
Frosst Canada Inc. v. Apotex Inc. (1997), 72 C.P.R. (3d) 170
at pages 175 and 177-178 (F.C.A.); Merck Frosst Canada Inc. v. Canada
(Minister of National Health and Welfare) (1998), 80 C.P.R. (3d) 368 at
paragraph 33 (S.C.C.); Merck Frosst Canada Inc. v. Canada
(Minister of National Health and Welfare) (1994), 58 C.P.R. (3d) 245 at
page 248 (F.C.).
[15]
Of equal
importance is granting case management judges and prothonotaries proper
deference. Because she was well apprised of the facts and of the procedural
history of the within application, the prothonotary must be given some latitude
to fulfill her mandate. This deference should obviously not be equated with
licence to dispense with the Rules at whim, but the Court should be loath to
interfere with a discretionary decision on appeal, except in the clearest of
cases. As the Federal Court of Appeal wrote in Sawridge Band v. Canada
(C.A.), [2002] 2 F.C. 346 at paragraph 11:
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.
See also: Remo
Imports Ltd. v. Jaguar Cars Ltd. (2003), 24 C.P.R. (4th) 341
(F.C.); aff’d (2003), 24 C.P.R. (4th) 348 (F.C.A.).
[16]
In the present
case, Apotex submits the prothonotary erred in law and principle, by failing to
apply the correct legal test appropriate to determining whether an extension
should be applied. That error, according to Apotex, resulted in part from the
prothonotary’s failure to appreciate the true nature of the motion in question.
Apotex submits she treated the motion for an extension of time as a mere
scheduling conference designed to facilitate the prosecution of this matter.
[17]
There is
no dispute between the parties that Rule 8 of the Rules permits an extension of
time by way of motion. There is also no dispute as to the test for granting
an extension of time. In Canada (Attorney General) v. Hennelly
(1999), 244 N.R. 399, the Federal Court of Appeal listed the following factors
to determine whether an extension should be granted: 1) a continuing intention
to pursue his or her application; 2) that the application has some merit; 3)
that no prejudice to the respondent arises from the delay; and 4) that a
reasonable explanation for the delay exists.
[18]
While it
is true that the prothonotary did not explicitly go through each and every one
of these factors, I am not convinced she reached a decision that is clearly
wrong on its facts. One must never lose sight of the fact that the applicants
brought the motion for an extension of time in the context of a case-managed
proceeding. It would add considerably to the burden of case management if all
decisions at every step of the proceedings had to be fleshed out with elaborate
written reasons.
[19]
It is clear
from her reasons that the prothonotary was familiar with the proceeding and aware
of the steps taken to date. Not only did Altana bring a motion to extend time
for cross-examinations on deponents of affidavits served by Apotex, but it also
served Apotex on the same day with a notice of motion seeking leave to file
reply evidence. This, in itself, showed a continued intention to pursue the
application.
[20]
The
underlying principle in deciding to grant an extension of time is that justice
be done between the parties. Unless an application has no merit, a party
should not lose its right to conduct cross-examinations simply because it
failed to abide by the timelines provided by the Rules. This is not to say
that the time limits prescribed by the Rules are of no consequence and counsel
can disregard them without consequence. But when deciding whether the failure
to act in conformity with the time limits should be held against a party,
regard must be had to all the facts with a view to ensuring the parties are
treated fairly. I therefore agree fully with Prothonotary Roger Lafrenière’s approach
in Pfizer Canada Inc. v. Apotex Inc. (2005), 39
C.P.R.(4th) 71, where he stated at paragraph 23:
Although I find that improper
tactics were used by Apotex in this and the previous motion, which I consider
to be a failure to reasonably cooperate in expediting the application, I am
also of the view that to deny Apotex an opportunity to file responding evidence
would be too draconian a consequence. A party committing a procedural default
should not be denied an opportunity to respond to a proceeding unless there is
prejudice to the other side which cannot be compensated by costs, or otherwise.
[21]
I fail to
see what prejudice Apotex will suffer from the order granting an extension of
time for cross-examinations. Apotex has not appealed the date set for the
hearing, and so cannot complain that cross-examinations will delay the final
determination of the issues involved in this application. As for the
inconvenience to counsel representing Apotex, who claim to be incapable of
conducting the cross-examinations in light of their various commitments, it is
simply not a prejudice that can be taken into consideration. Not only is the
timetable more than reasonable, but more importantly, the alleged prejudice is
not to the party itself.
[22]
Apotex
also submitted that the prothonotary erred in considering the unlikelihood that
the cross-examinations would or could have been completed in the timeframe
established under Part V of the Rules. But Apotex’s own evidence was that it
fully expected cross-examinations to be completed and the applicant’s record
filed within the timelines prescribed by the Rules. The case management prothonotary
disagreed and found this was “highly unlikely to say the least”. Apotex cannot
now say that the prothonotary considered irrelevant factors when it raised this
issue with its own evidence. The prothonotary was not clearly wrong in making
this statement and did not misuse her judicial discretion.
[23]
Finally, I
can see no merits in Apotex’s argument that the prothonotary refused to hear its
argument, and had already decided to allow the applicants’ request for an
extension by asking that Apotex provide available dates for the hearing prior
to counsel delivering submissions. Nor do I find that the prothonotary
committed an error in awarding costs. Rule 410(2) clearly provides that the
costs of a motion for an extension of time are borne by the party bringing the
motion, “unless the Court orders otherwise”. It was therefore open to the prothonotary
to make the costs payable in the cause, in the exercise of her discretion.
[24]
For all of
the above reasons, I would accordingly dismiss this appeal.
ORDER
THIS COURT ORDERS that the appeal is dismissed, with
costs in the cause.
“Yves de Montigny”
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