Toronto, Ontario, April 4, 2007
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
and ELI LILLY CANADA INC.
and
AND BETWEEEN:
APOTEX INC.
Plaintiff by Counterclaim
(Defendant)
and
ELI LILLY AND COMPANY
and ELI LILLY CANADA INC.
Defendants by Counterclaim
(Plaintiffs)
and
SHIONOGI & CO. LTD.
Defendant by Counterclaim
REASONS FOR ORDER AND ORDER
[1] This is an appeal by Apotex Inc. from the Case Management Prothonotary who made an Order, inter alia, refusing to defer or bifurcate the issue of damages, or at least the quantification of damages, arising out of the claims asserted by Apotex as Plaintiff by Counterclaim under the provisions of the Competition Act.
[2] Apotex is well aware of the burden that it bears on such an appeal. Discretionary Orders of a Prothonotary are not to be disturbed on appeal unless the question is one vital to the final issues of the case or was clearly wrong or based on a wrong principle or misapprehension of the facts. (Merck & Co. v. Apotex Inc. (2003), 30 C.P.R. (4th) 40 (F.C.A.)). On this motion, Apotex relies on the second of these grounds, only, arguing that the Prothonotary proceeded on a wrong principle and misapprehended the facts.
[3] When a Prothonotary is acting in a case management role, as was the situation here, considerable deference should be afforded to determinations made in that context. (see e.g. Anchor Brewing Co. v. Sleeman Brewing and Malting Co. 2005 F.C. 261 which while being a discovery questions motion, the general principle is applicable).
[4] Apotex argues that the “wrong principle” upon which the Prothonotary proceeded was to find that damages must be proved as an element of a claim under the Competition Act. Apotex argues that the “misapprehension of facts” that the Prothonotary laboured under was that, given that
there was an Order deferring damages in respect of the patent infringement claim, and given that there would be at least some overlap or offset of the claim for damages under the Competition Act, it
would be inappropriate to have discovery proceed on one aspect and not the other, and equally
inappropriate to require Apotex to proceed to trial on its damages matters, while not requesting the
plaintiffs in the patent infringement aspect to do likewise.
[5] The Prothonotary gave Reasons for her Order, stating inter alia.
In sum, I am not satisfied on the balance of probabilities that, in light of the evidence and all the circumstances of this case (including the nature of the claim, the conduct of the litigation, the issues and the remedies sought), severance is more likely than not to result in the just, expeditious and least expensive determination of the proceeding on its merits. Ilva Saronno S.p.A. v. Privilegiata Fabbrica Maraschino “Excelsior” Girolamo Luxardo S.p.A.(2000), 183 F.T.R. 25 (F.C.T.D.).
There is no evidence that the bifurcation of damages attributable to the alleged breaches of the Competition Act will result in any savings or efficiencies. To the contrary, Lilly’s evidence is that it has conducted its discovery on remedies and requires no further discovery on this point. Counsel for Apotex advised in the course of the hearing that, to his knowledge, no further documents are expected from Shionogi. There is no reason to expect that Shionogi’s discovery will have to be extended beyond the days now set aside for that purpose in January or that Apotex’s discovery, now scheduled to conclude in the spring of 2007, will have to be extended.
I will not comment on each element to which I have had regard, and which Shionogi and Lilly ably address in detail. Suffice it to say that, in addition to Apotex’s failure to adduce convincing evidence, it has failed to demonstrate that liability and damages are distinct and easily severable in respect of the competition claims.
As a matter of law, proof of loss or damages is an essential element of the cause of action to fix civil liability for breaches of the Competition Act: Price v. Panasonic Canada Inc. (2002) 22 C.P.C. (5th) 379 at paras. 27-28; Culhane v. ATP Aero Training Products Inc., (2005), 39 C.P.C. (4th) 20 at paras. 1-2; and Eli Lilly and Co.
v. Apotex (2004), 32 C.P.R. (4th) 195 at para. 6. The issues of liability and damages in respect of the conspiracy allegations are intertwined, and may not be severed. Absent proof of damages,
therefore, Apotex cannot make out its civil liability claim under sections 36 and 45 of the Competition Act.
At paragraph 37 of its written representations, Apotex says that even if it has to establish “the fact” that it has suffered damages in the liability phase, it considers this to be distinct from the extent or quantum of the loss.
Thus, in the course of the hearing, Apotex proposed an alternative to deferring all questions going to damages, namely, that an order issue deferring only “the quantification of damages”, without prejudice to the rights of the parties to have discovery as to “the fact of loss or damages” suffered by Apotex.
As a practical matter, it is not possible in the context of discovery to limit the parties’ examinations to the fact of loss as this issue, quite properly, is bound to entail delving into the extent of the loss. Requiring the parties to maintain a distinction at discovery between the existence and the extent is both unworkable and likely to prove contentious at the expense of judicial and other resources.
Just as Apotex has failed to demonstrate any savings or efficiencies resulting from the bifurcation of damages, or remedy, as a whole, there is even less of a basis for believing that the incremental limitation proposed by Apotex will result in any efficiencies. The likelihood is to the contrary.
[6] Apotex argues that the statement that “the issues of liability and damages in respect of the conspiracy allegations are intertwined, and may not be severed”, is wrong, therefore the Prothonotary proceeded on a “wrong principle” and the Court should exercise its discretion anew. I am not entirely persuaded that the statement is wrong but I will not comment further, since the reasons of the Prothonotary clearly indicate that she, nonetheless, proceeded to consider all the arguments that Apotex raised as to difficulties as to discovery and trial. Thus at the end of the day, whether or not the Prothonotary was “wrong” on a “principle” is immaterial, she determined the matter based on discretion.
[7] The second issue is whether there was a “misapprehension of the facts”. I do not find any such misapprehension. The reasons of the Prothonotary indicate that the same matters raised before me were raised before her. She made a reasoned determination in this regard.
[8] Therefore, I find that Apotex has failed to overcome the burden of demonstrating that there was sufficient error in the decision of the Prothonotary that it should be reversed on this appeal.
ORDER
For the reasons above;
THIS COURT ORDERS that
1. The motion is dismissed.
2. Costs to the Plaintiffs, Eli Lilly and Company and Eli Lilly Canada Inc. and Defendant by Counterclaim, Shionogi & Co. Ltd., in the cause.
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1321-97
STYLE OF CAUSE: ELI LILLY AND COMPANY and ELI LILLY CANADA INC. v. APOTEX INC.
AND BETWEEN:
APOTEX INC. v. ELI LILLY AND COMPANY and
ELI LILLY CANADA INC. and SHIONOGI & CO. LTD.
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: April 4, 2007
REASONS FOR ORDER
AND ORDER BY: Hughes J.
APPEARANCES:
|
PATRICK SMITH
|
|
|
SANDON SHOGILEV DAVID SCRIMGER MILES HASTIE
|
|
|
DAVID MORROW |
FOR THE DEFENDANT BY COUNTERCLAIM (SHIONOGI) |
SOLICITORS OF RECORD:
|
GOWLINGS OTTAWA, ON |
|
|
GOODMANS LLP TORONTO, ON |
|
|
SMART & BIGGAR TORONTO, ON |
FOR THE DEFENDANT BY COUNTERCLAIM (SHIONOGI) |