Docket:
T-1555-12
Citation: 2014 FC 173
Ottawa, Ontario, February 24, 2014
PRESENT: The
Honourable Mr. Justice O'Reilly
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BETWEEN:
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PFIZER CANADA INC.
AND G.C. SEARLE & CO.
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Applicants
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and
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APOTEX INC.
AND THE MINISTER OF HEALTH
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Respondents
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ORDER AND REASONS
I. Overview
[1]
Pfizer appeals an order of Prothonotary Aalto in
which, on Apotex’s motion, he struck certain paragraphs from expert evidence
filed by Pfizer, permitted Apotex to file expert evidence in reply, and ordered
Pfizer to compensate, Apotex in part, for its costs. The order arose in the
context of Pfizer’s application for a prohibition order under the Patented
Medicines (Notice of Compliance) Regulations. Pfizer’s appeal
relates solely to the portion of the order in which Prothonotary Aalto ordered
Pfizer to pay the costs of Apotex’s motion on a “substantial indemnity basis”.
[2]
Pfizer argues that the Prothonotary should not
have imposed costs on an elevated level without giving it a chance to make
submissions (Apotex had sought costs on its motion but not solicitor and client
costs). Further, Pfizer submits that no such cost award can be imposed without
an explicit finding of exceptional circumstances, which the Prothonotary did
not make. Finally, Pfizer contends that Prothonotary Aalto erred by not making
reference to the factors relevant to cost awards set out in s 400 of the Federal
Courts Rules, 1998 SOR/98-106.
[3]
I cannot agree with Pfizer’s submissions. Prothonotary
Aalto dealt with the circumstances before him by creating a suitable and fair
remedy that gave both parties some relief. Pfizer was able to preserve almost
all its expert evidence. Apotex was given a chance to meet that evidence with
its own and received some compensation for the additional costs it would incur.
I cannot see any unfairness to Pfizer in these circumstances, or anything
unreasonable about Prothonotary Aalto’s decision.
II. Apotex’s
Motion and the Prothonotary’s Order
[4]
On its prohibition application, Pfizer wished to
reverse the evidence – that is, to require Apotex to file its evidence first.
Apotex opposed that request, but acquiesced to a partial reversal of evidence
in which Pfizer would tender its fact evidence first, Apotex would then file
its expert evidence on inutility, and then Pfizer would tender its responding
expert evidence.
[5]
Pfizer filed some fact evidence, to which Apotex
responded with its expert evidence. Pfizer then filed its expert evidence,
which included a good deal of evidence Apotex regarded as fact evidence, mainly
studies supporting Pfizer’s position on utility.
[6]
Apotex then moved to strike a substantial amount
of Pfizer’s evidence on the basis that it was out of keeping with the partial
reversal order and, accordingly, that Apotex had been prejudiced in having to
produce its expert evidence without disclosure of the documentation on which
Pfizer intended to rely to support its utility arguments. Pfizer opposed the
motion but conceded that Apotex should have a right of reply to the expert
evidence.
[7]
Prothonotary Aalto clearly believed that
reversal orders in general and partial reversal orders in particular should be
discouraged. However, he acknowledged that the striking of portions of
affidavits is an exceptional remedy. The judge hearing the prohibition
proceeding should have the benefit of a full record, and to strike large
portions of its evidence would prejudice Pfizer. On the other hand, Pfizer
would clearly have been aware of the existence of the fact evidence on which
its experts were going to rely, based on parallel proceedings with another
party, yet it did not disclose that evidence to Apotex. The issue was the
remedy that should be granted in the circumstances.
[8]
Prothonotary Aalto sought a middle ground in
which the prejudice to Apotex could be remedied, in part, by allowing it to
file reply evidence. In addition, he concluded that the portions of Pfizer’s
expert opinions that were critical of Apotex’s experts for their failure to
consider studies of which they were unaware should be struck. Finally, he held
that Apotex should receive substantial indemnity costs for having to bring its
motion to strike, and should be compensated for the costs of preparing reply
evidence, although not the experts’ fees themselves.
III. Did
the Prothonotary treat Pfizer unfairly or render an unreasonable decision?
[9]
Pfizer argues that the Prothonotary could not
impose solicitor and client costs without giving it a chance to make
submissions on that issue. Further, the Prothonotary could not impose solicitor
and client costs without making a finding that special circumstances justified
them. Finally, Pfizer contends that the Prothonotary had to consider the
factors in s 400 of the Federal Courts Rules in his cost award.
[10]
A short answer to Pfizer’s position is that the
Prothonotary did not impose solicitor and client costs. He imposed costs on a
substantial indemnity basis and encouraged the parties to come to an agreement
on quantum. This is not the same thing as imposing solicitor client costs.
Further, the Prothonotary’s reasons as a whole disclose why he imposed an
elevated cost award. He refers to mischief, misbehaviour, and prejudice.
Finally, the Prothonotary had no obligation to refer specifically to the
factors in Rule 400.
[11]
In addition, however, in my view, these
circumstances differ from an ordinary cost award. Here Prothonotary Aalto used
costs as a means of fashioning an appropriate and balanced remedy in a complex
and unique situation.
[12]
Further, since costs can be used as a tool for
achieving justice between parties, a judicial officer, particularly a case
management judge, must have the freedom to determine how heavy a tool to use by
setting the appropriate quantum. That must include setting costs at an elevated
level.
[13]
Here, Prothonotary Aalto arrived at a creative
remedy that sought to allow Pfizer to preserve almost all of its evidence, give
Apotex a chance to respond to that evidence, and compensate Apotex for some of
the additional costs it would incur in doing so. In his discretion, Prothonotary
Aalto imposed elevated costs as a means of achieving a just resolution of the
predicament brought about by the reversal order, and allowing the parties to
continue to advance to a hearing on the real issues between them. Short of an
obvious error or injustice, I would be loathing to meddle with the Prothonotary’s
well-informed balancing of the respective parties’ positions or his efforts to
move the case along.
[14]
Therefore, I would dismiss this motion with
costs.
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