Dockets: A-303-15
Citation:
2016 FCA 215
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CORAM:
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NADON J.A.
PELLETIER J.A.
RENNIE J.A.
DE MONTIGNY J.A.
GLEASON J.A.
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BETWEEN:
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HOSPIRA
HEALTHCARE CORPORATION
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Appellant
(Plaintiff)
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and
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THE KENNEDY
INSTITUTE OF RHEUMATOLOGY
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Respondent
(Defendant)
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AND BETWEEN:
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THE KENNEDY
TRUST FOR RHEUMATOLOGY RESEARCH, JANSSEN BIOTECH, INC., JANSSEN INC. and
CILAG Gmbh INTERNATIONAL
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Respondents
(Plaintiffs
By Counterclaim)
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and
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HOSPIRA
HEALTHCARE CORPORATION, CELLTRION HEALTHCARE CO., LTD. and CELLTRION, INC.
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Appellants
(Defendants
By Counterclaim)
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REASONS
FOR JUDGMENT
NADON J.A.
I.
Introduction
[1]
Before us is an appeal of an order made by Mr.
Justice Boswell of the Federal Court (the Motions Judge) on June 18, 2015
wherein he dismissed the Appellants’ appeal from the Order of Madam
Prothonotary Milczynski (the Prothonotary) rendered on April 17, 2015 pursuant
to which she ordered, inter alia, that the additional examination of two
witnesses by the Appellants would be limited to one half day per witness by
teleconference.
[2]
By order of the Chief Justice, this appeal was
heard by a panel of five judges. At issue is the question of whether this Court
should revisit the standard of review applicable to discretionary orders made
by prothonotaries enunciated in Canada v. Aqua-Gem Investments Ltd.,
[1993] 2 F.C. 425, 149 N.R. 273 [Aqua-Gem]. The Respondents invite us to
abandon the standard of review set out in Aqua-Gem and to replace it by
the standard enunciated by the Supreme Court of Canada in Housen v.
Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 [Housen]. For the
reasons that follow, it is my view that we should abandon the Aqua-Gem standard
and adopt the one set out in Housen.
II.
Facts
[3]
The Kennedy Trust for Rheumatology Research
(Kennedy), one of the Respondents, is the owner of patent number 2,261,630 (the
‘630 Patent) entitled “Anti-TNF Antibodies and
Methotrexate in the Treatment of Autoimmune Disease”. The two named
inventors of this patent, Sir Ravinder Nath Maini (Dr. Maini) and Sir Marc Feldman
(Dr. Feldman) (the inventors), are retired and live in the United Kingdom. They
are respectively 79 and 71 years old.
[4]
On March 6, 2013, the Appellant Hospira
Healthcare Corporation (Hospira) commenced an action against Kennedy seeking, inter
alia, declarations that the ‘630 Patent was invalid and that Hospira’s
proposed product did not infringe the ‘630 Patent.
[5]
On October 4, 2013, Kennedy and the other
Respondents, namely Janssen Biotech, Inc., Janssen Inc. and Cilag GmbH
International counterclaimed against Hospira and the other Appellants, namely Celltrion
Healthcare Co., Ltd. and Celltrion, Inc. seeking, inter alia,
declarations that the ‘630 Patent was valid and that the Appellants had
infringed or induced infringement of the ‘630 Patent.
[6]
In May 2014, the Appellants conducted a
discovery of each of the two inventors – in London for Dr. Maini and in New
York for Dr. Feldmann where he happened to be travelling. However, the
Appellants were unable to complete the examinations. Prior to the examinations,
counsel for the Appellants had requested two days of discovery for each of the
inventors, but that request had been refused by counsel for the Respondents
whose view was that one day for each inventor was sufficient. Consequently, at
the end of the first day, the examination of each inventor was terminated by
the Respondents.
[7]
On July 31, 2014, the Appellants brought a
motion seeking, among other things, to continue the examination of the
inventors, at their own expense, for one additional day per inventor. The
Appellants sought to examine the inventors in Toronto.
III.
Decisions Below
A.
Order Of The Prothonotary
[8]
The Appellants’ motion was heard in Toronto on
March 10, 2015 by the Prothonotary who had been case managing the action from
the outset. On April 17, 2015, she ordered that “Hospira
and Celltrion shall complete the examination of each of Dr. Feldmann and Dr.
Maini in one-half day (each), which examinations shall be conducted by
teleconference, unless otherwise agreed to by the parties” (paragraph 6
of her order).
B.
Order Of The Motions Judge
[9]
On June 18, 2015, the Motions Judge dismissed
the Appellants’ appeal from the Prothonotary’s order. Applying the standard of
review set out in Aqua-Gem, the Motions Judge stated that the
re-attendance of the inventors and their continued examination was not vital to
the final issue of the case, and that the Prothonotary’s order was not clearly
wrong. He emphasized that the Federal Court was reluctant to interfere with
case-management decisions made by prothonotaries who were to be given “elbow room” in performing “a
difficult job” (paragraph 4 of his order).
[10]
The Motions Judge concluded that the
Prothonotary had properly exercised her discretion and that she had rendered “not only a focused decision but a reasonable one as well”
(paragraph 5 of his order). He further held that the motion before him was of “questionable necessity or merit” and that it “undermine[d] the objectives of the case management system”
(paragraph 6 of his order).
IV.
Issues
[11]
The appeal raises the two following questions:
i.
Should this Court reconsider the standard of
review applicable to discretionary orders made by prothonotaries, as set out in
Aqua-Gem?
ii.
Was the Motions Judge wrong in refusing to
interfere with the Prothonotary’s order?
V.
Parties Submissions
A.
Appellants’ Submissions
(1)
Standard of Review
[12]
The Appellants say that the standard of review
applicable to discretionary decisions made by prothonotaries is the one set out
by this Court in Aqua-Gem, as reiterated by the Supreme Court in Z.I.
Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450,
at paragraph 18 [Pompey]. The Appellants further say that the standard
of review on appeal to this Court with respect to questions of law is
correctness and palpable and overriding error in regard to findings of fact.
(2)
Merits Of The Appeal
[13]
The Appellants argue that the Motions Judge
erred in that he allowed the Respondents to thwart their right to examination
for discovery under Rule 237(4) of the Federal Courts Rules, SOR/98-106 (the
Rules) which provides that “where an assignee is a
party to the action, the assignor may also be examined for discovery”. There
is no dispute between the parties that the inventors, as assignors of the
patent at issue, can be examined by the Appellants under the Rule.
[14]
Contrary to the Motions Judge’s view that “the re-attendance [of the inventors] will only serve to
provide historical context”, the Appellants point to the other purposes
of inventor discovery and say that there is no requirement that the examining
party demonstrate, a priori, “any necessity in
examining the assignor or specifically set out what the assignor’s examination
will add to the litigation” (paragraph 39 of the Appellants’ memorandum).
According to the Appellants, since there is no limitation to the right of examination
of an assignor, the burden of establishing that the examination is “oppressive, vexatious or unnecessary” falls on the
person being examined, i.e. in this case the Respondents. In the Appellants’
view, the Prothonotary wrongly shifted the burden in that she required the
Appellants to justify the necessity of their examination of the inventors.
[15]
The Appellants contend that “[t]he ‘elbow room’ of case management does not confer on a
prothonotary the ability to disregard the Rules” (paragraph 46 of the
Appellants’ memorandum). Indeed, the deference that ought to be afforded in
such a case is not without limits. The Appellants are of the view that the
decision relied on by the Motions Judge, namely Sawridge Band v. Canada,
2006 FCA 228, [2006] F.C.J. No. 956 (QL) [Sawridge], is clearly distinguishable
from the case before us because of factual differences. The Appellants argue
that had the Motions Judge performed the same review of the merits of the
Prothonotary’s order as the Court did in Sawridge, he would have
concluded that the Prothonotary’s order was clearly wrong.
[16]
The Appellants further submit that “a case management prothonotary cannot prioritize expedience
over a right conferred by the Rules” (paragraph 59 of the Appellants’
memorandum), and say that this is what the Prothonotary did by limiting the
duration and manner of the discovery sought by them without a determination
that the examination was abusive or otherwise improper. The Prothonotary erred,
say the Appellants, by permitting the Respondents to arbitrarily end their
examination of the inventors and thus the Motions Judge ought to have
intervened.
[17]
Turning to the manner in which examinations for
discovery ought to be conducted, the Appellants insist that the default rule is
that examinations are done in person, and that an order that examinations be
conducted by video-conference is an exceptional remedy that must be justified
by the party seeking it. The Appellants contend that the Prothonotary also
prejudged the relevance of questions that had yet to be asked by limiting the
examinations of the inventors to one half day each.
[18]
The Appellants further say that the Prothonotary
misapprehended the facts of the case, because there was no evidence that the
examinations were abusive or that the inventors were unable to attend in person
for one day each. In addition, the issues for discovery were too vast, in the
Appellant’s opinion, to be covered in the timeframe ordered by the
Prothonotary.
B.
Respondents’ Submissions
(1)
Standard Of Review
[19]
The Respondents invite this Court to reconsider
the standard of review applicable to discretionary orders made by prothonotaries.
They say that such orders should be reviewed according to the Housen
standard rather than the prevailing Aqua-Gem/Pompey standard which, in
their view, is manifestly wrong and should be abandoned.
[20]
The Respondents argue that the de novo
review of prothonotaries’ decisions that are vital to the final outcome of the
case is irreconcilable with the presumption of fitness and that there is “no compelling reason for adopting differing standards of
review on appeal depending solely on the place in the judicial hierarchy
occupied by the first-instance decision maker” (paragraphs 33 and 34 of
the Respondents’ memorandum.)
[21]
The Respondents also point out that, in Pompey,
the Supreme Court merely reiterated the standard enunciated by this Court in Aqua-Gem
without further explanation. According to the Respondents, Housen is the
Supreme Court’s definitive word on the standard of review and is binding on this
Court.
[22]
Moreover, the Respondents assert that the Aqua-Gem/Pompey
standard is fraught with uncertainty because the question of whether an issue
is vital or not is difficult to answer and requires a case-by-case assessment.
Conversely, the Respondents say that the Housen standard is easy to
apply. Finally, the Respondents say that decisions made by prothonotaries with
respect to the merits of actions of less than $50,000 are already reviewed on
the Housen standard. In any event, the Respondents say that, other than
in respect of the de novo review for vital issues, the Aqua-Gem/Pompey
and the Housen standards are, in effect, the same.
(2)
Merits Of The Appeal
[23]
With respect to the merits of the appeal, the
Respondents say that the Appellants are simply re-arguing in this appeal what
they have already argued before the Prothonotary and the Motions Judge. As the
issue before us is not one that is vital to the outcome of the case, the Respondents
say that the Appellants are in error when they argue that the Motions Judge
should have substituted his discretion for that of the Prothonotary.
[24]
Relying on Rule 3, the Respondents say that
discovery “is not a never ending process” and
that it should be proportionate. The Respondents further say that the Federal
Court properly managed its process according to this principle. In addition,
the Respondents assert that a case management judge has the power to make any
order that is necessary for the just determination of the proceedings,
including by dispensing compliance with a Rule. By granting the Prothonotary
some “elbow room”, the Motions Judge deferred to
her factually-based decision in accordance with Sawridge.
[25]
The Respondents also say that the purposes of
examining an inventor for discovery are limited and that restricting inventor
discovery in this case to one-and-a-half day per inventor does not cause
prejudice to the Appellants. Finally, the Respondents emphasize that, absent
the issuance of letters rogatory, they do not have the power to compel the two
inventors to re-attend because they are residents of the United Kingdom. In
this context, they submit that it was appropriate for the Prothonotary to order
that they should be examined by way of teleconference.
VI.
Analysis
A.
Should This Court Reconsider The Standard Of
Review Of Discretionary Decisions Made By Prothonotaries?
[26]
At the outset, I must say that as the order made
by the Prothonotary that gives rise to the present appeal is not one that is
vital to the final outcome of the case, a determination of whether or not the
standard of review should be revisited is in no way determinative of this case.
As the Respondents have argued, there does not appear to be, other than in
respect of the de novo review when the issue is vital, any substantial
difference between the Aqua-Gem/Pompey standard and the Housen
standard. Both standards, in my respectful opinion, simply formulate the same
principles through the use of different language.
[27]
In effect, under the Aqua-Gem/Pompey
standard, a discretionary decision made by a prothonotary is clearly wrong, and
thus reviewable on appeal by a judge, where it is based: (1) upon a wrong
principle - which implies that correctness is required for legal principles - and
(2) upon a misapprehension of facts - which seems to be the equivalent of the "overriding and palpable error" criterion of
the Housen standard if it caused the prothonotary's decision to be "clearly wrong".
[28]
Notwithstanding, I have no doubt that the
question of the standard of review applicable to discretionary decisions of
prothonotaries is one that needs to be revisited. It is my opinion that we
should now adopt the Housen standard with regard to discretionary decisions
made by prothonotaries as we have done in respect of similar decisions made by
judges of first instance (in Imperial Manufacturing Group Inc. v. Decor
Grates Incorporated, 2015 FCA 100, [2016] 1 F.C.R. 246 [Imperial
Manufacturing], to which I will return later). Needless to say, the issue
of the standard of review applicable to orders of both judges and prothonotaries
has been one of the most contentious issues before our Court and before all
courts of appeal, including before the Supreme Court of Canada, in the last 10
to 15 years. It is my respectful view that it is not in the interests of
justice to continue with a plurality of standards when one standard, i.e. the Housen
standard, is sufficient to deal with the review of first instance
decisions.
(1)
The Aqua-Gem Test And Why It Should Be Changed
[29]
In Aqua-Gem, decided in 1993, our Court
enunciated the standard which, until now, has been applied to review
discretionary decisions made by prothonotaries. Until this appeal, Aqua-Gem
was the last time when a panel of five judges of this Court heard an appeal. It
was an important issue then and remains so today.
[30]
The matter giving rise to the appeal in Aqua-Gem
was a motion brought by the Respondent for an order staying the proceedings
under paragraph 50(1)(b) of the Federal Court Act, (1993),
R.S.C., 1985, c. F-7 or, in the alternative, dismissing the proceedings for
want of prosecution pursuant to then Rule 440. The motion was heard by the
Associate Senior Prothonotary (the Senior Prothonotary) who dismissed it. The
Senior Prothonotary’s decision was appealed to a motions judge who disagreed
with him and, who, as a result, set his Order aside, with costs.
[31]
The issue before our Court in Aqua-Gem
was whether all discretionary decisions made by prothonotaries should be
reviewed by way of de novo hearings, which our Court’s decision in Canada
v. Jala Godavari (The), 135 N.R. 316, 40 C.P.R. (3d) 127 [The
Jala Godavari] seemed to suggest, or whether such decisions should be
reviewed for error only in some or all cases.
[32]
Three opinions were given in Aqua-Gem.
Chief Justice Isaac (the Chief Justice) opined both on the standard of review
and with regard to the merits of the appeal. Robertson J.A. opined on the
merits only and MacGuigan J.A., with whom Mahoney J.A. and Décary J.A. agreed,
addressed both the standard of review and the merits of the appeal.
[33]
The first opinion, given by the Chief Justice,
concluded that the standard of review enunciated in The Jala Godavari
was incomplete and that, in relying on that decision, the motions judge had
erred in interfering with the Senior Prothonotary’s decision. In coming to this
view, the Chief Justice carefully examined the legislative underpinnings of the
role of prothonotaries and the nature of the functions which they were expected
to perform. This led him to say, at page 441, that:
Doubtless, in providing for the office of
the Registrar or Master in the Exchequer Court and of the prothonotary in this
Court, Parliament was mindful of the pre-trial and post judgment support which
the master system provided for superior court judges in the judicial systems of
England and Ontario, both of which made extensive use of these judicial
officers.
[34]
The Chief Justice then proceeded to consider the
history and evolution of the law concerning the office of master in Canada and
in England. More particularly, he examined both English and Ontario cases with
regard to the standard of review pursuant to which decisions made by masters
were to be reviewed. That examination led him to conclude that the approach
taken by the Ontario Court of Appeal in Stoicevski v. Casement, (1983) 43
O.R. (2d) 436 (Div. Ct.) [Stoicevski] was the proper approach and the
one that this Court should follow. At page 454 of his reasons, the Chief
Justice formulated the standard which, in his view, this Court should adopt in
reviewing discretionary decisions of prothonotaries. He put it as follows:
I am in agreement with counsel for the
appellant that the proper standard of review of discretionary orders of
prothonotaries in this Court should be the same as that which was laid down in
Stoicevski for masters in Ontario. I am of the opinion that such orders ought
to be disturbed on appeal only where it has been made to appear that
(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 the facts, or
(b) in making them, the
prothonotary improperly exercised his discretion on a question vital to the
final issue of the case.
[35]
On the basis of this standard of review, the
Chief Justice concluded that there were no grounds justifying the motions judge’s
interference with the Order of the Senior Prothonotary. Hence, the Chief
Justice would have allowed the appeal.
[36]
The second opinion, the majority opinion, was
that of MacGuigan J.A. who accepted the Chief Justice’s recitation of the facts
and agreed, in part, with his opinion concerning the standard of review. He reformulated
the standard of review which this Court ought to apply to discretionary orders
made by prothonotaries in the following way at pages 462 and 463:
I also agree with the Chief Justice in part
as to the standard of review to be applied by a motions judge to a
discretionary decision of a prothonotary. Following [page463] in particular
Lord Wright in Evans v. Bartlam, [1937] A.C. 473 (H.L.) at page 484, and
Lacourciere J.A. in Stoicevski v. Casement (1983), 43 O.R. (2d) 436
(Div. Ct.), discretionary orders of prothonotaries ought not 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 the 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.
[37]
After explaining that The Jala Godavari
should not be understood as having decided that judges should never defer to a
prothonotary’s discretion, but rather that whenever the question at issue was
vital to the final issue of the case, the prothonotary’s discretion was subject
to an overriding discretion on the part of a judge, adding that error of law on
the part of a prothonotary was always a ground of intervention, MacGuigan J.A., then addressed the question as to
when an order made by a prothonotary was vital to the final issue of a case. At
pages 464 and 465, he said:
The question before the prothonotary in the
case at bar can be considered interlocutory only because the prothonotary
decided it in favour of the appellant. If he had decided it for the respondent,
it would itself have been a final decision of the case: A-G of Canada v.
S.F. Enterprises Inc. et al. (1990), 90 DTC 6195 (F.C.A.) at pages
6197-6198; Ainsworth v. Bickersteth et al., [1947] O.R. 525 (C.A.). It
seems to me that a decision which can thus be either interlocutory or final
depending on how it is decided, even if interlocutory because of the result,
must nevertheless be considered vital to the final resolution of the case.
Another way of putting the matter would be to say that for the test as to
relevance to the final issue of the case, the issue to be decided should be
looked to [page465] before the question is answered by the prothonotary,
whereas that as to whether it is interlocutory or final (which is purely a pro
forma matter) should be put after the prothonotary's decision. Any other
approach, it seems to me, would reduce the more substantial question of
"vital to the issue of the case" to the merely procedural issue of
interlocutory or final, and preserve all interlocutory rulings from attack
(except in relation to errors of law).
(emphasis in original)
[38]
Thus, in MacGuigan J.A.’s view, whether a
question is vital or not to the final issue of the case depends on what was
sought by the motion before the prothonotary. A question vital to the final
issue of the case does not depend on how the prothonotary determines the issue.
[39]
With respect to the merits of the appeal,
MacGuigan J.A. was of the view that the motions judge had made no error in
setting aside the Senior Prothonotary’s Order.
[40]
The third opinion was that of Robertson J.A. who
shared the Chief Justice’s opinion that the appeal should be allowed.
[41]
Thus, in Aqua-Gem, our Court made it
clear that not all decisions made by prothonotaries were subject to de novo
review. On the basis of a thorough review of the historical evolution of the
role of masters and prothonotaries in the Canadian judicial system, the Court
concluded that only decisions that decided questions vital to the final issue
of a case should be reviewed de novo by a judge of the Federal Court. In
the Court's view, that framework recognized the intention expressed by
Parliament in the Federal Court Act to grant prothonotaries certain
powers in order to further the efficient performance of the work of the Court.
In coming to this view, the Court traced the origins of the master system to deal
with pre-trial matters back to the 19th century in England, and described the
evolution of the standard of review in Canada since Confederation. This
narrative is suffused with the tension between the need to give effect to the
powers granted to judicial officers, and the protection of the powers given to
judges to decide cases without interference.
[42]
To conclude on the standard adopted by our Court
in Aqua-Gem, I should say that in paragraph 19 of Merck & Co. v.
Apotex Inc., 2003 FCA 488, 30 C.P.R. (4th) 40 [Merck],
Décary J.A., writing for a unanimous court, after referring to pages 464 and
465 of MacGuigan J.A.’s reasons in Aqua-Gem, reformulated the test in
the following terms:
[19] To avoid the confusion which we
have seen from time to time arising from the wording used by MacGuigan J.A., I
think it is appropriate to slightly reformulate the test for the standard of
review. I will use the occasion to reverse the sequence of the propositions as
originally set out, for the practical reason that a judge should logically
determine first whether the questions are vital to the final issue: it is only
when they are not that the judge effectively needs to engage in the process of
determining whether the orders are clearly wrong. The test would now read:
Discretionary orders of prothonotaries ought
not be disturbed on appeal to a judge unless:
a) the questions raised in
the motion are vital to the final issue of the case, or
b) the orders 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 the facts.
[43]
To this it is important to add that in 2003, the
Supreme Court in Pompey approved the Aqua-Gem standard and
formulated, at paragraph 18 of its reasons, its approval in the following
terms:
18 Discretionary orders of
prothonotaries ought to be disturbed by a motions judge only where (a) they are
clearly wrong, in the sense that the exercise of discretion was based upon a
wrong principle or a misapprehension of the facts, or (b) in making them, the
prothonotary improperly exercised his or her discretion on a question vital to
the final issue of the case: Canada v. Aqua-Gem Investments Ltd., [1993]
2 F.C. 425 (C.A.), per MacGuigan J.A., at pp. 462-63. An appellate court may
interfere with the decision of a motions judge where the motions judge had no
grounds to interfere with the prothonotary's decision or, in the event such
grounds existed, if the decision of the motions judge was arrived at on a wrong
basis or was plainly wrong: Jian Sheng Co. v. Great Tempo S.A., [1998] 3
F.C. 418 (C.A.), per Décary J.A., at pp. 427-28, leave to appeal refused,
[1998] 3 S.C.R. vi.
[44]
As appears from the above remarks made by Mr.
Justice Bastarache, who wrote the Supreme Court’s reasons in Pompey, the
Supreme Court also formulated the standard of review pursuant to which
decisions of motions judges in appeal of discretionary decisions of prothonotaries
were to be reviewed.
[45]
The Respondents argue that discretionary
decisions made by prothonotaries, vital or not to the final issue of the case,
should not be subject to de novo review, but rather to the test
adopted by the Supreme Court in Housen. The Respondents say that the
compromise reached in Aqua-Gem to resolve the tension between the powers
given to prothonotaries and those given to judges is no longer adequate in the
present context and that we should follow the practice now prevailing in
Ontario. More particularly, the Respondents submit that we should follow the
decision of the Ontario Court of Appeal in Zeitoun v. Economical Insurance,
2009 ONCA 415, 96 O.R. (3d) 639 [Zeitoun] where the Ontario Court of
Appeal abandoned the Ontario equivalent of the Aqua-Gem standard and
held that the standard to be used in reviewing discretionary orders of masters
in Ontario should be the one enunciated by the Supreme Court in Housen.
[46]
In my view, there are a number of reasons why we
should follow the lead given by the Ontario Court of Appeal in Zeitoun.
First, there is continuing confusion in the Federal Court as to what
constitutes an order that raises questions vital to the final issue of the
case. In Winnipeg Enterprises Corporation v. Fieldturf (IP) Inc., 2007
FCA 95, 360 N.R. 355, a panel of this Court held, relying on the majority
opinion of MacGuigan J.A. in Aqua-Gem, that what rendered a
prothonotary’s order vital to the final issue of the case was the nature of the
question before him or her. Thus, the manner in which a prothonotary deals with
the question before him is irrelevant in determining whether his order is one
that raises questions vital to the final issue of the case.
[47]
Unfortunately, this approach has been clearly
misunderstood by a number of judges of the Federal Court where a line of
jurisprudence, also relying on Aqua-Gem, has taken the view that “it is not what was sought but what was ordered by the
Prothonotary which must be determinative of the final issues in order for the
Judge to be required to undertake de novo review” (Peter G. White
Management Ltd. v. Canada, 158 A.C.W.S. (3d) 696, 2007 FC 686, at paragraph
2 (Huguessen J.). Also see Scheuer v. Canada, 2015 FC 74, 248 A.C.W.S.
(3d) 802, at paragraph 12 (Diner J.), Teva Canada Limited v. Pfizer Canada
Inc., 2013 FC 1066, 441 F.T.R. 130, at paragraph 10 (Campbell J.), Gordon
v. Canada, 2013 FC 597, 2013 D.T.C. 5112, at paragraph 11 (Hughes J.), Chrysler
Canada Inc. v. Canada, 2008 FC 1049, [2009] 1 C.T.C. 145 at paragraph 4
(Hughes J.)).
[48]
I note that in his recent judgment in Alcon
Canada Inc. v. Actabis Pharma Company, 2015 FC 1323, [2015] F.C.J. No.
1540, at paragraphs 9-19, Mr. Justice Locke of the Federal Court deplored the
ongoing confusion prevailing in the Federal Court with regard to this issue.
[49]
In my view, the effectiveness of the process of appeals
to a Federal Court judge from an order of a prothonotary has been tainted by
the language used in Aqua-Gem. I am obviously not to be taken as criticizing
the panel that decided Aqua-Gem, but simply note that confusion has
crept in the process and has detracted from the effective review of discretionary
orders made by prothonotaries.
[50]
Because of the Aqua-Gem standard, the
question of whether a prothonotary’s discretionary order is vital or not to the
final issue of the case is one that is recurrent. Thus a high number of appeals
taken to motions judges from discretionary orders or prothonotaries require the
motions judge to ask himself whether it is appropriate or not to conduct a de
novo review. The question has proven difficult to answer. Some issues, for
example motions for leave to amend pleadings, have given much difficulty to decision
makers (see for instance Merck & Co. Inc. v. Apotex Inc., 2004 2 F.C.R.
459, 2003 FCA 488 (Richard C.J. dissenting, Décary and Létourneau JJ.A.), Merck
& Co. Inc. v. Apotex Inc., 2012 FC 454, 106 C.P.R. (4th) 325
at paragraphs 8 - 10 (Rennie J. as he then was).
[51]
A second reason for moving away from the Aqua-Gem
standard is the persuasiveness of the reasons of the Divisional Court of the
Ontario Superior Court of Justice (the Divisional Court) with regard to the
appropriate standard of review that should be applied by a motions judge
hearing an appeal from an Ontario master, which a unanimous Ontario Court of
Appeal endorsed in Zeitoun. More particularly, the Ontario Court of
Appeal agreed with the Divisional Court that the prevailing standard, for all
intents and purposes identical to the Aqua-Gem standard, should be
abandoned and replaced by the standard enunciated by the Supreme Court in Housen.
In concluding that there was no principled basis for distinguishing between the
decisions of masters and those of judges for the purpose of standard of review,
the Ontario Court of Appeal made specific reference to paragraphs 26, 36, 40
and 41 of the reasons given by Low J. of the Divisional Court. The reasons of
Low J., as they are expressed in these paragraphs, in my respectful view, go to
the heart of the matter and are worth repeating.
[52]
First, Low J. made the point that Ontario’s
prevailing standard in regard to discretionary decision of masters, which
allowed for de novo hearings in certain situations, was the result of
historical notions of hierarchy which merited reconsideration because i) of the
evolution and rationalization of standards of review in the case law, ii) the expansion
of the role of masters in the Ontario’s civil system, iii) the concepts of
economy and expediency which pervade the Ontario rules of civil procedure and,
finally iv) the difficulties which had arisen in determining whether
discretionary orders of masters were vital or not to the final issue of the
case.
[53]
Second, Low J. took the view that the reviewing
court should proceed on the basis of a presumption of fitness that both judges
and masters were capable of carrying out the mandates which the legislator had
assigned to them. Thus, there was no principled basis justifying, on the sole
ground of his place in the hierarchy, interference by a motions judge in regard
to a matter assigned by the legislator to a master, other than when it had been
shown that the master’s decision was incorrect in law or that the master had
misapprehended the facts or the evidence.
[54]
Third, Low J. opined that the same approach
taken in reviewing discretionary decisions made by motions judges should also
be taken in reviewing discretionary decisions of masters. In other words,
intervention would be justified only where a master had made an error of law or
had exercised his discretion on wrong principles or where he had misapprehended
the evidence such that there was a palpable and overriding error. In Low J.’s
opinion, the Housen standard should be applied to discretionary
decisions of masters.
[55]
In my view, the arguments which the Ontario
Court of Appeal found convincing in Zeitoun are as compelling for the
Federal Courts.
[56]
I wish to point out that the question now before
us has already been raised on a number of occasions before our Court, Pfizer
Canada Inc. v. Teva Canada Limited, 2014 FCA 244, 466 N.R.55 at paragraph
3; Bayer Inc. v. Fresenius Kabi Canada Ltd., 2016 FCA 13, [2016] F.C.J.
No. 43 at paragraph 7 [Bayer] and Apotex Inc. v. Bristol-Myers Squibb
Company, 2011 FCA 34, 414 NR 162 at paragraph 9 [Apotex]. I note, in
particular, that in Apotex, at paragraph 9, my colleague, Mr. Justice
Stratas, referred to the Ontario Court of Appeal’s decision in Zeitoun
and indicated that he was “attracted” to the
argument that Aqua-Gem should be reassessed. However, he was of the view
that it was not necessary in the case before him to determine that issue.
[57]
I should also say that I see nothing in the
legislation which would prevent us from moving away from the Aqua-Gem
standard and doing away with de novo review of discretionary orders made
by prothonotaries in regard to questions vital to the final issue of the case.
Pursuant to the enabling power conferred by subsection 12(3) of the Federal
Courts Act, R.S.C. 1985, c. F-7, Rule 50(1) allows prothonotaries to hear–and
make any necessary orders relating to–any motion unless specified otherwise.
Rule 51(1) ensures that there is judicial oversight of those decisions by
providing for a right of appeal to a judge of the Federal Court for all orders
made by prothonotaries. I also note that Rule 50(2) allows prothonotaries to
render decisions with regard to the merits of actions for monetary relief not
exceeding $50,000. In such instances, prothonotaries act, for all practical
purposes, as trial judges and their decisions are reviewable pursuant to the Housen
standard. I therefore see no legislative impediment to the abandonment of the Aqua-Gem
standard of review. There appears to be no principled reason why there should
be a different and, in effect, more stringent standard of review for
discretionary orders made by prothonotaries.
(2)
Can We Abandon The Aqua-Gem/Pompey Standard?
[58]
Although I am satisfied that we should abandon
the Aqua-Gem standard, is it open for us to do so in the present matter?
In inviting us to revisit the Aqua-Gem standard, the Respondents say
that on the basis of this Court’s decision in Miller v. Canada (Attorney
General), 2002 FCA 370, 220 D.L.R. (4th) 149 [Miller],
and of the Supreme Court’s decision in Carter v. Canada (Attorney General),
2015 SCC 5, [2015] 1 S.C.R. 331 [Carter], we can do so.
[59]
First, I wish to say that I agree entirely with
the Respondents when they say that in Pompey, the Supreme Court simply
gave effect to the Aqua-Gem standard. In other words, other than adopting
the standard enunciated by MacGuigan J.A., the Supreme Court was silent. It is
quite clear from the Supreme Court’s reasons in Pompey that the true
issue before the Court in that case was the correctness of the legal
determinations made below and not the applicable standard of review.
[60]
The Respondents say that pursuant to Miller,
we can reconsider our decisions “if they are manifestly
wrong in the sense that they overlook relevant authority” (paragraph 31
of the Respondents’ memorandum). In making that assertion, the Respondents rely
on paragraph 10 of Rothstein J’s (as he then was) reasons in Miller
where he says:
[10] The test used for overruling a
decision of another panel of this Court is that the previous decision is
manifestly wrong, in the sense that the Court overlooked a relevant statutory
provision, or a case that ought to have been followed…
Emphasis added
[61]
In my respectful view, this is not a situation
where Miller finds application. It cannot be said that Aqua-Gem “is manifestly wrong” in the sense explained by
Rothstein J. in Miller. In my view, Miller is not relevant to the
present matter.
[62]
However, I am satisfied that the Respondents are
correct in invoking the Supreme Court’s decision in Carter where the
Court, at paragraph 44, stated an exception to the principle of stare
decisis which allows lower courts, in certain circumstances, not to follow
the decisions of higher courts and, in particular, decisions rendered by the
Supreme Court. At paragraph 44 of its reasons in Carter, the Supreme
Court said as follows:
[44] The doctrine that lower courts
must follow the decisions of higher courts is fundamental to our legal system.
It provides certainty while permitting the orderly development of the law in
incremental steps. However, stare decisis is not a straitjacket that
condemns the law to stasis. Trial courts may reconsider settled rulings of
higher courts in two situations: (1) where a new legal issue is raised; and (2)
where there is a change in the circumstances or evidence that “fundamentally
shifts the parameters of the debate” (Canada (Attorney General) v. Bedford,
2013 SCC 72, [2013] 3 S.C.R. 1101, at paragraph 42).
[63]
Although the issue of the standard of review
applicable to discretionary decisions of prothonotaries is not a new legal
issue, there has been “a change in the circumstances or
evidence that ‘fundamentally shifts the parameters of the debate’”. In
my view, the standard of review set out in Aqua-Gem has been overtaken
by a significant evolution and rationalization of standards of review in
Canadian jurisprudence. In this context it is important to emphasize that the
Chief Justice’s review in Aqua-Gem of the role of masters in England and
in Canada showed that their role was one that evolved from assistants to judges
to that of independent judicial officers. It is also worthy of note that the
role of prothonotaries of the Federal Court has continued to evolve since Aqua-Gem
was decided in 1993. In particular, their role, as the Respondents submit,
includes the task of hearing and determining the merits of actions where the
monetary value at issue is less than $50,000. Needless to say, prothonotaries
are no longer, if they ever were, viewed by the legal community as inferior or second
class judicial officers. Other than in regard to the type of matters assigned
to them by Parliament, they are, for all intents and purposes, performing the
same task as Federal Court Judges.
[64]
These circumstances “fundamentally
shift the parameters of the debate” regarding the standard applicable to
discretionary orders of prothonotaries. In my respectful opinion, the
supervisory role of judges over prothonotaries enunciated in Rule 51 no longer
requires that discretionary orders of prothonotaries be subject to de novo
hearings. That approach, as made clear by Low J. in Zeitoun, is one that
has been overtaken by the evolution and rationalization of standards of review
and by the presumption of fitness that both judges and masters are capable of
carrying out the mandates which the legislator has assigned to them. In other
words, discretionary orders of prothonotaries should only be interfered with
when such decisions are incorrect in law or are based on a palpable and
overriding error in regard to the facts.
[65]
I therefore
conclude that it is entirely open to us to move away from the Aqua-Gem
standard. In my respectful opinion, we should replace that standard by the one
set out by the Supreme Court in Housen.
(3)
The Housen Standard And Why It Should Replace
The Aqua-Gem Standard
[66]
In Housen, the Supreme Court enunciated
the standard of review applicable to decisions of trial judges. More
particularly, it concluded that with respect to factual conclusions reached by
a trial judge, the applicable standard was that of palpable and overriding
error. It also stated that with respect to questions of law and questions of
mixed fact and law, where there was an extricable legal principle at issue, the
applicable standard was that of correctness (paragraphs 19 to 37 of Housen).
[67]
I begin by saying that it is clear to me that in
enunciating the standard of review which it did in Housen, the Supreme
Court did not intend to apply that standard to discretionary decisions of
motions judges and, obviously, to similar decisions made by prothonotaries. Of
that, I am entirely satisfied. Recently, in Canadian Imperial Bank of
Commerce v. Green, 2015 SCC 60, [2015] 3 S.C.R. 801 [Green], Madame
Justice Coté, writing for a unanimous Supreme Court, indicated that the
standard which normally applied to a discretionary decision made by a Judge,
i.e. in the case before her an order nunc pro tunc, were the standards
which had been enunciated by the Supreme Court in Reza v. Canada, [1994]
2 S.C.R. 394, 1994 CanLII 91, at page 404 [Reza] and in Soulos v.
Korkontzilas, [1997] 2 S.C.R. 217, [1997] S.C.J. No. 52, at paragraph 54 [Soulos].
Madam Justice Coté, at paragraph 95 of her reasons, explained the applicable
standard as follows:
95 I must now decide whether the
doctrine applies to the cases at bar. Before doing so, I should briefly outline
the applicable standard of review. The standard that ordinarily applies to a
judge's discretionary decision on whether to grant an order nunc pro tunc
is that of deference: if the judge has given sufficient weight to all the
relevant considerations, an appellate court must defer to his or her exercise
of discretion (Reza v. Canada, [1994] 2 S.C.R. 394, at p. 404). However,
if the judge's discretion is exercised on the basis of an erroneous principle,
an appellate court is entitled to intervene: Soulos v. Korkontzilas, [1997]
2 S.C.R. 217, at paragraph 54.
[68]
As I indicated earlier, at paragraph 26 of these
reasons, it is my view that the Aqua-Gem/Pompey standard and the Housen
standard, notwithstanding the different language used to convey the ideas
behind the standards, are, in effect, the same standards. To this, I would add
that I see no substantial difference between these standards and those applied
by the Supreme Court in Reza and Soulos. In other words, if the decision-maker
has made an error of law, the reviewing court is entitled to intervene and
substitute its own discretion or decision. With respect to factual conclusions,
the reviewing court must defer unless, in the case of the Reza standard,
the motions judge has failed to give sufficient weight to the relevant
circumstances or, in the case of the Aqua-Gem/Pompey standard, the
prothonotary has misapprehended the facts. In my respectful opinion, there is,
in the end, no substantial difference between these standards.
[69]
I am therefore of the view that there is no
reason why we should not apply to discretionary orders of prothonotaries the
standard applicable to similar orders by motions judges. I am supported in this
view by our decision in Imperial Manufacturing, where we applied the Housen
standard in reviewing the discretionary decision of a motions judge, namely her
determination of a motion for particulars regarding certain allegations made in
the Plaintiff’s statement of claim.
[70]
In abandoning the authority of our decision in David
Bull Laboratories (Canada) Inc. v. Pharmacia Inc., [1995] 1 F.C. 588 at
page 594, 58 C.P.R. (3d) 209 at page 213 [David Bull], and those cases
which had continued to hold David Bull as authority for the standard of
review applicable to discretionary orders made by motions judges, i.e. that the
Court would not interfere unless the decision was arrived at “on a wrong principle” (in effect, the standard
enunciated by the Supreme Court in Soulos) or that the decision-maker
had given “insufficient weight to relevant factors,
misapprehended the facts or where an obvious injustice would result” (in
effect, the standards enunciated by the Supreme Court in Reza and Pompey),
our Court explained why the Housen standard should be applied.
[71]
First, Mr. Justice Stratas, who wrote the
Court’s reasons, stated that there was a question of stare decisis in
that Housen, a decision of the Supreme Court, was binding. Second, he
indicated that the David Bull line of authority was now redundant
because of Housen. Third, he indicated that the David Bull line
of authority was not easily understood in that it seemed to constitute “an invitation to this Court to reweigh the evidence before
the Federal Court and substitute our own opinion for it” (paragraph 26
of Imperial Manufacturing). Fourth, he was satisfied that the David
Bull line of authority, if properly understood, was to the same effect as
the Housen standard (paragraph 25 of the Imperial Manufacturing).
Fifth, he indicated that in the interest of simplicity and coherency, all
jurisdictions, other than the Federal Court and Federal Court of Appeal,
applied the Housen standard to review decisions of lower courts “across the board” and that we should also do so
(paragraph 27 of Imperial Manufacturing). Mr. Justice Stratas concluded
his discussion on the standard of review by saying, at paragraph 29 of his
reasons, that:
[29] To eliminate these problems and in
the interests of simplicity and coherency, only the Housen articulation
of the standard of review – binding upon us – should be used when we review
discretionary, interlocutory orders. In accordance with Housen, absent
error on a question of law or an extricable legal principle, intervention is
warranted only in cases of palpable and overriding error.
[72]
I am in complete agreement with the remarks made
by Mr. Justice Stratas in Imperial Manufacturing as to why we should apply
the Housen standard to discretionary orders of motions judges. Further,
his remarks clearly support the view that the Housen standard should
also be applied to discretionary orders made by prothonotaries. Whether a
motion is determined by a prothonotary or a motions judge is, in my view,
irrelevant. The same standard should apply to the review of all discretionary
orders.
[73]
Notwithstanding my view that the Supreme Court did
not intend to apply the Housen standard to discretionary decisions of
motions judges this does not detract from the force of the arguments which my
colleague Mr. Justice Stratas makes in Imperial Manufacturing. Although
my colleague does not, in his remarks in Imperial Manufacturing, make reference
to Green, nor to Reza and Soulos, his main criticism of
the existing standard of review in the case before him was that the Housen
standard was clearer, simpler and did not differ substantially from the David
Bull line of authority.
[74]
I cannot, however, leave this issue without
referring to our Court’s decision in Turmel v. Canada, 2016 FCA 9, 481
N.R. 139 (at paragraph 12), where, again under the pen of Mr. Justice Stratas,
our Court appears to have moved beyond the Housen standard in determining
the standard applicable to discretionary orders of motions judges. At paragraph
12 of his reasons for the Court, Mr. Justice Stratas stated that pursuant to Imperial
Manufacturing, David Bull, Green and Housen, it was
not open to appellate courts, in reviewing discretionary decisions of motions
judges, to reweigh the evidence and to substitute their conclusions for those
of the first judge. Then, after setting out the rationale of his opinion in Imperial
Manufacturing for the adoption of the Housen standard, Mr. Justice
Stratas formulated a different standard applicable to the review of
discretionary orders of judges:
[12] Putting aside these subtleties, [by
subtleties, Mr. Justice Stratas appears to refer to the various standards
enunciated in the cases which he refers to at paragraph 11 of his reasons] what
is common to all of these verbal formulations is that in the absence of an
error of law or legal principle an appellate court cannot interfere with a
discretionary order unless there is an obvious, serious error that undercuts
its integrity and viability. This is a high test, one that the case law shows
is rarely met. This deferential standard of review has applied in the past to
discretionary orders appealed to this Court and it is the test we shall apply
to the interlocutory discretionary order made by the Federal Court that is
before us in these appeals.
[75]
On my count, at least twelve decisions of this
Court have followed Imperial Manufacturing: Jamieson Laboratories
Ltd. v. Reckitt Benckiser LLC, 2015 FCA 104, 130 C.P.R. (4th) 414 at paragraph
21; Mancuso v. Canada (National Health and Welfare), 2015 FCA 227, 476
N.R. 219 at paragraph 8; Canada v. Fio Corporation, 2015 FCA 236, 478
N.R. 194 at paragraph 10; AgraCity Ltd v. Canada, 2015 FCA 288, 262
A.C.W.S. (3d) 259 at paragraph 16; Horseman v. Horse Lake First Nation,
2015 FCA 122, [2015] F.C.J. No. 637 at paragraph 7; ABB Technology AG, ABB
Inc. v. Hyundai Heavy Industries Co., Ltd., 2015 FCA 181, 475 N.R. 341 at paragraph
84; Cameco Corporation v. Canada, 2015 FCA 143, [2015] F.C.J. No. 774 at
paragraph 39; Canada v. Superior Plus Corp., 2015 FCA 241, 477 N.R. 385
at paragraph 5; Kinglon Investments Inc. v. Canada, 2015 FCA 134, 472
N.R. 192 at paragraph 5; Fong v. Canada, 2015 FCA 102, 2015 D.T.C. 5053
at paragraph 5; Administration de pilotage des Laurentides c. Corporation
des pilotes du Saint-Laurent central inc., 2015 CAF 295, [2015] A.C.F. no
1495 at paragraph 5; Sin v. Canada, 2016 FCA 16, 263 A.C.W.S. (3d) 184
at paragraph 6.
[76]
On the same count, it appears that at least
eleven decisions of this Court have followed Turmel: French v. Canada,
2016 FCA 64, [2016] F.C.J. No. 238 at paragraph 26; Galati v. Harper,
2016 FCA 39, 394 D.L.R. (4th) 555 at paragraph 18; Canada (Citizenship and
Immigration) v. Bermudez, 2016 FCA 131, [2016] F.C.J. No. 468 at paragraph
21; Canada v. John Doe, 2016 FCA 191, [2016] F.C.J. No. 695 at paragraph
31; Teva Canada Limited v. Gilead Sciences Inc., 2016 FCA 176, [2016]
F.C.J. No. 605 at paragraph 23; Djelebian v. Canada, 2016 FCA 26, 2016
D.T.C. 5023 at paragraph 9; Bemco Confectionery and Sales Ltd. v. Canada,
2016 FCA 21 at paragraph 3; Kwan Lam v. Chanel S. de R.L., 2016 FCA 111,
[2016] F.C.J. No. 95 at paragraph 15; Zaghbib v. Canada (Public Safety and
Emergency Preparedness), 2016 FCA 182, [2016] F.C.J. No. 651 at paragraph
23; Bayer Inc. v. Fresenius Kabi Canada Ltd., 2016 FCA 13, [2016] F.C.J.
No. 43 at paragraph 7; Contrevenant no. 10 c. Canada (Procureur général),
2016 CAF 42, [2016] A.C.F. no 176 at paragraph 6.
[77]
It seems to me, with the greatest of respect,
that if we are going to simplify the standard applicable to decisions of prothonotaries
and judges, and thus make the process easier to understand for litigants, it is
imperative that we get our own house in order. As Mr. Justice Stratas stated, at
paragraph 22 of his reasons in Imperial Manufacturing:
[22] …In those cases, [Mr. Justice
Stratas is referring to Housen] the Supreme Court provided the definitive
word on the standard of review in civil cases. It did not make informal
comments of the sort we might be tempted to distinguish. Rather, it analyzed
the matter thoroughly – examining precedent, doctrine and legal policy – and it
pronounced clearly and broadly on the matter, without any qualifications or
reservations….
[78]
I am not to be taken as disagreeing with what
Mr. Justice Stratas says at paragraph 12 of his reasons in Turmel.
However, in my respectful view, introducing new language, language that finds
no basis in Housen, will have the opposite effect of what our Court
intended to achieve in Imperial Manufacturing, i.e. “in the interests of simplicity and coherency, only the
Housen articulation of the standard of review – binding upon us – should be
used when we review discretionary, interlocutory orders” (paragraph 29).
Introducing new language will detract from simplicity and coherency and will,
no doubt, give rise to a fresh line of arguments by counsel which will
inevitably detract from the effective review of discretionary orders made by
prothonotaries and judges.
[79]
I therefore conclude that we should apply the Housen
standard to discretionary decisions of prothonotaries. I am also of the view
that the Housen standard should apply in reviewing discretionary
decisions of judges.
B.
Did The Motions Judge Err In Refusing To
Interfere With The Prothonotary’s Decision?
[80]
Before turning to the second issue, a few words
concerning the standard of review applicable to the Motions Judge’s decision
are necessary. In Pompey, at paragraph 18, the Supreme Court held that
our Court could only interfere with a decision of a motions judge reviewing the
discretionary order of a prothonotary when the judge had no grounds to
interfere with the prothonotary’s decision, or where there were such grounds,
the judge had decided the matter on a wrong basis or was plainly wrong.
[81]
In Bayer, a case where the appeal to our
Court was one from a decision of a motions judge reviewing a discretionary
order of a prothonotary pursuant to a Rule 51 appeal, our Court held that but
for the Pompey standard of review, it would have applied the Housen
standard in reviewing the judge’s decision.
[82]
As I understand this branch of the Pompey
standard, this Court cannot interfere with the Motions Judge’s decision unless
he made an error of law or made an error of the type that falls within the
palpable and overriding error component of the Housen standard. Thus, on
my understanding of the Pompey standard, there is no difference in
substance between it and the Housen standard.
[83]
Consequently, in my view, not only should we
apply the Housen standard to the decision of the Prothonotary, we should
also apply that standard to the decision of the Motions Judge.
[84]
Thus the question before us on this appeal is whether
the Motions Judge erred in law or made a palpable and overriding error in
refusing to interfere with the Prothonotary’s decision.
[85]
The facts leading up to the Prothonotary’s decision
are quite straightforward. On March 19, 2014, counsel for the Appellants wrote
to counsel for the Respondents summarizing their discussions regarding the
examinations of the inventors. Counsel for the Appellants pointed out that they
had requested two days to examine each inventor and that Counsel for the
Respondents had taken the position that one day was sufficient. More
particularly, counsel for the Appellants wrote that:
As I mentioned previously, we anticipate
that more than one day will be required for the examination of Dr. Feldmann and
also the examination of Dr. Maini. We recommend reserving two days for each of
these witnesses particularly in view of our joint request for an early trial
date, the witnesses’ limited availability and the necessity to travel to London
and New York to conduct their examinations. If you maintain your refusal to
provide additional dates of availability and one day is found (as is expected)
to be insufficient to complete their respective examinations, we shall seek a
direction that Kennedy pay for all of the costs of the reattendance.
[86]
As I indicated earlier, at the end of the first
day of the examination of each inventor, counsel for the respondents did not
allow the respondents to pursue their examinations.
[87]
In her Order of April 17, 2015, at page 4, the
Prothonotary dealt with this issue as follows:
AND UPON the Court taking under reserve its
disposition of item #2 in Motion #2 and any issues as to costs thereof, and
upon subsequently further considering the submissions of counsel for the
Plaintiffs that the examination of each of Dr. Feldmann and Dr. Maini, although
conducted for two days, was not completed and that they had requested two days
(each) from the outset. The Plaintiffs described generally the topics for
discovery yet to be completed with the inventors and requested a further one
day with each of the inventors. I am satisfied, however, that a half day with
each would be sufficient and that these discoveries should be concluded with
some cooperation between the parties so as to permit the litigation to
progress. I am also satisfied that, unless the parties agree otherwise, that
the examinations of Dr. Feldmann and Dr. Maini should proceed by way of
teleconference.
[my emphasis]
[88]
As a result, she made the Order which gave rise
to the appeal before the Motions Judge and now in appeal before us.
[89]
The action commenced by Hospira to impeach the
Patent at issue was bifurcated by consent of the parties. Once liability is
determined by the Federal Court, the remedy phase, if necessary, will follow. The
action has been case managed by the Prothonotary from its commencement and she
has presided over 12 case management conferences and nine days of discovery
motions. There can thus be no doubt that she had full knowledge of the relevant
facts and issues now before the Federal Court when she made her decision.
[90]
As it appears from her Order, the issue before
us was only one of many which the Prothonotary had to deal with. In making her
Order regarding the reattendance of the inventors, the Prothonotary took note
of the Appellants’ argument that their examination of the inventors was
incomplete and that a number of topics had yet to be covered. After
consideration of the parties’ respective arguments, she declared herself
satisfied that an additional one half day per inventor would be sufficient to
complete the examinations. She also held that the inventors were to be examined
by teleconference unless the parties came to a different agreement.
[91]
The appeal from her decision was heard by the Motions
Judge on June 16, 2015 and he dismissed the appeal two days later. In deciding
as he did, the Motions Judge applied the Aqua-Gem standard of review. On
the basis of that standard, he held that the Prothonotary’s decision was not
clearly wrong and that her discretion had not been exercised upon wrong
principles or upon a misapprehension of the facts. I pause here to say that in applying
the Aqua-Gem standard in lieu of the Housen standard, the Motions
Judge did not make a reviewable error in that, as I have already indicated,
there is no substantial difference between the two standards other than in
respect of the de novo hearing when the question at issue is vital to
the final issue of the case, which is not the situation in the present matter.
[92]
I will now address the specific grounds of criticism
put forward by the Appellants in support of their submission that we should allow
their appeal.
[93]
The Appellants’ main argument in this appeal is
that the Prothonotary erred in shifting the burden in regard to the examination
process. They say that if the Respondents were of the view that two days were
not justified for each inventor, they ought to have brought a motion under Rule
243 asking the Court to make a determination that the continuance of the
examinations was “oppressive, vexatious or unnecessary”.
Failing such a motion, the Appellants say that their right to examine the
inventors was absolute. Consequently, in requiring them to demonstrate why they
needed more than one day to examine the inventors, the Prothonotary shifted to
them the burden of justifying the length of the examinations.
[94]
I am prepared to accept that, in a technical
sense only, the Appellants are correct. In other words, once it became apparent
that the parties could not agree on the duration of the examinations or before
they terminated the examinations at the end of the first day, the Respondents
should have brought a motion under Rule 243. However, as we now know, the
parties proceeded to London and New York for the examinations and it appears
that the Appellants hoped for the best, i.e. that once there, the Respondents
would give in. Unfortunately, that scenario did not occur and, at the end of
the first day of each examination, the Respondents terminated them.
[95]
The Appellants say, and they are correct, that
it was not the Respondents’ call to terminate the examinations of the
inventors. However, contrary to the Appellants’ submission, it was not, in my
respectful view, entirely their call to determine the duration of their
examinations. In the face of a disagreement between the parties only the Federal
Court could make that determination.
[96]
It goes without saying, in the circumstances,
that it would have been advisable for everyone involved in this litigation to
have had the matter decided prior to the commencement of the examinations in
London and New York. However, in the end, the matter that should have been
determined prior to the commencement of the examinations was brought before the
Prothonotary and she made the determination in her order of April 17, 2015.
[97]
It follows from the Prothonotary’s decision that
she agreed with the Appellants that their continued examination of the inventors
was not vexatious or oppressive and that it was necessary. However, she was
satisfied that an additional one half day per inventor was sufficient to allow
the Appellants to conclude their examinations. She came to this view after listening
to the parties arguments which, inter alia, were directed at the topics which
the Appellants said needed to be covered during the examinations.
[98]
In answer to the Appellants’ argument that the
Prothonotary erred by shifting the burden to them, I begin by saying that
examinations, including those of assignors/inventors, are not without limits.
To say, as the Appellants do, that there is no limitation to their right of
examination is, in my respectful view, incorrect. Circumstances and context
matter greatly. They form the parameters within which examinations must be
conducted. Prothonotaries and judges must therefore, in addressing and
determining issues pertaining to discovery and examinations, keep those factors
in mind at all times. They must also remember Rule 3 which provides that the
rules, including those concerning discovery, are to “be
interpreted and applied so as to secure the just, most expeditious and least
expensive determination of every proceeding on its merits”. This, it
seems to me, is precisely what the Prothonotary did in making the impugned
order.
[99]
In determining whether the continuance of the
examinations of the inventors was justified and whether one day or less was required,
there can be no doubt that the Prothonotary considered a number of
circumstances relevant to her determination, and in particular the topics which
the Appellants intended to cover in light of the issues before the Court. In
considering these circumstances, the Prothonotary must have also had in mind the
fact that the inventors were not parties to the action, that they would have to
make themselves available for the continued examination, the time frame of the
action and its scheduling. All of those factors, in my respectful view, were
relevant to the determination that the Prothonotary had to make.
[100] Her consideration of all the above factors led the Prothonotary to
hold that a continuance of the examinations of the inventors was justified by
teleconference and that an additional one half day per inventor would suffice.
[101] I pause here to say that during the course of their arguments before
us on this appeal, the Appellants did not make any attempt to apprise us of the
topics which they intended to cover during the course of their examinations.
This omission, I suspect, stems from their view that it was entirely up to them
to determine the duration of the examinations. In other words, the Appellants’
view seemed to be that it was not for the Prothonotary, the Motions Judge and,
in effect, for us to tell them how long they should take in examining the
inventors. This is why I indicated earlier that the Appellants argued that
their right to examine the inventors was absolute. In saying this, I should not
be taken in any way as criticizing counsel for the Appellants. However, in
deciding whether the Motions Judge ought to have intervened, it seems to me
that some details regarding those topics on which the Appellants intended to
further examine the inventors should have been provided to us. This, no doubt,
would have been helpful in better understanding the Appellants’ need for the
continued examinations.
[102] With regard to the Appellants’ arguments directed at the Motions
Judge’s comments that “elbow room” should be
given to case managing prothonotaries, I agree entirely with the Respondents
when they say, at paragraph 67 of their memorandum of fact and law, that:
The expression “elbow room” is merely a
euphemism for deferring to factually-suffused decisions. “Elbow room” does not
equate to “immunity from review” and Justice Boswell did not hold that it did.
[103] In other words, it is always relevant for motions judges, on a Rule
51 appeal, to bear in mind that the case managing prothonotary is very familiar
with the particular circumstances and issues of a case and that, as a result,
intervention should not come lightly. This does not mean, however, that errors,
factual or legal, should go undetected. In the end, “elbow
room” is simply a term signalling that deference, absent a reviewable
error, is owed, or appropriate, to a case managing prothonotary—no more, no
less.
[104] Finally, with regard to the Appellants’ arguments that the
Prothonotary erred in ordering that the examinations were to be conducted by
way of teleconference, I agree with the Respondents that since the inventors
were both residents of the United Kingdom, they were not compellable absent the
issuance of letters rogatory. Consequently, in the circumstances, I can detect
no error on the part of the Prothonotary in ordering the continuance of the
examinations by way of teleconference.
[105] Therefore, on my understanding of the Record and of the parties’
respective submissions, I can see no basis which would allow us to conclude
that the Motions Judge ought to have interfered with the Prothonotary’s
decision. In other words, I have not been persuaded that the Motions Judge
either erred in law or made an overriding and palpable error which would have
allowed us to intervene.
VII.
Conclusion
[106]
I would therefore dismiss the appeal with costs.
“M. Nadon”
“I agree.
J.D. Denis
Pelletier J.A.”
“I agree.
Donald J.
Rennie J.A.”
“I agree.
Yves de Montigny J.A.”
“I agree.
Mary J.L. Gleason J.A.”
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