Federal Court Decisions

     T-1144-97

BETWEEN:

     ELI LILLY AND COMPANY and

     ELI LILLY CANADA INC.,

     Applicants,

     - and -

     APOTEX INC. and

     THE MINISTER OF HEALTH,

     Respondents.

     REASONS FOR ORDER

TEITELBAUM, J:

INTRODUCTION

     In the present motion hearing, I am asked to consider a motion by Eli Lilly and Company and Eli Lilly Canada Inc. (the applicants) to order:

1.      that leave be granted to the Applicants to file within seven days of my Order, evidence in reply to the affidavits of Jan Oudenes and Bernard Sherman filed August 12, 1997;

2.      pursuant to Rule 1614 of the Federal Court Rules to set the following schedule for the remaining steps in the proceeding:

(a)      cross-examinations to be concluded within 30 days from the date of filing and service of the applicants' reply evidence;

(b)      the applicants to file and serve their Application Record within 30 days of the conclusion of cross-examinations;

(c)      the respondents to file and serve their Application Records within 30 days of the filing and service of the applicants' Application Record; and

(d)      the applicants to file and serve their Supplementary Record, if any, within 10 days of the filing and service of the respondents' Application Records.

3.      Such further and other relief as I deem just.

     At the commencement of the hearing, it was agreed that I do not have to concern myself with the second part of this application, that is, the steps the parties will do to complete cross-examinations, etc..

FACTS

     By Originating Notice of Motion filed May 29, 1997, the applicants commenced this proceeding requesting, among other things, certiorari to quash the issuance of a notice of compliance (NOC) to Apotex Inc. (Apotex) on April 30, 1997 in respect of the drug nizatidine.

     One of the issues in the proceeding is whether the synthetic process of which Apotex advised the applicants was the subject matter of Apotex' allegation is the same process set out in Apotex' New Drug Submission (NDS). The process purportedly referred to in the allegation was provided to the applicants by letter dated November 29, 1995.

     At the start of these proceedings, the applicants did not include in their evidence details of the synthetic process set out in the November 29, 1995 letter because Apotex claimed confidentiality in those details.

     This is demonstrated by a motion that Apotex filed on June 27, 1997. Apotex sought to strike portions of the originating notice of motion and portions of the affidavit of Peter Stringer and Terry McCool in part on the basis that the applicants improperly used this confidential information by referring to the November 29, 1995 letter.

     On July 30, 1997, Mr. Justice Gibson dismissed Apotex' motion, but indicated that Apotex' concerns could be raised at the hearing on the merits. In addition, Mr. Justice Gibson ordered that the respondents had 14 days to provide their evidence and that the applicants had 30 days after receipt of the respondents' evidence to file their Application Record. No further schedule was set.

     On August 22, 1997, Apotex provided its evidence in the proceeding which included the affidavits of Jan Oudenes and Bernard Sherman both dated August 11, 1997 and the November 29, 1995 letter. This letter was filed without any confidentiality order and Apotex in its evidence is now taking the position that the contents of the letter are no longer confidential.

     Furthermore, Apotex for the first time produced portions of Torcan's Drug Master File which set out full details of the process in its NDS. "Torcan" refers to Torcan Chemical Ltd. which has a patent application on a purported improvement to the method of manufacturing nizatidine. An affidavit from the President of Torcan states that the process disclosed by Torcan in the patent application is part of Apotex' NDS and will be used to make Apotex' nizatidine. The applicants contend that the Torcan process is not the same process as that previously disclosed by Apotex to the applicants in the November 29, 1995 letter. Furthermore, there was no Notice of Allegation sent to the applicants in respect of the synthetic process disclosed in Torcan's patent application.

     The applicants have requested Apotex' consent to the applicants' request to file reply evidence and to accordingly extend the time periods set by Mr. Justice Gibson. Apotex has not consented to allow the applicants to file reply evidence. The Minister is not taking a position on this point.

THE LAW

The Applicants' Request to File Reply Evidence

     There is nothing in Part V.1 of the Federal Court Rules titled "Applications for Judicial Review" that discusses the circumstances where evidence can be filed in reply. However, a few judgments have considered this issue.

     In Bayer AG v. Canada (Minister of National Health and Welfare) (1994), 58 C.P.R. (3d) 377 (F.C.T.D.), MacKay J. considered a motion by the respondent to file reply evidence in a case where the main proceedings concerned an application by Bayer A.G. to prohibit issuance of a notice of compliance to Apotex. MacKay J. noted the following concerning leave to file affidavits in reply:

It is true that Part V.1 of the Rules does not specifically provide for affidavits to be filed in Reply by an applicant or by a respondent. Nevertheless, in my view, this Court has discretion to permit that where it will serve the interests of justice, will assist the Court and will not seriously prejudice the other party.

     This statement was cited with approval by Rouleau J. in AB Hassle v. Canada (Minister of National Health and Welfare) (1995), 61 C.P.R. (3d) 492 (F.C.T.D.), aff'd (1995), 64 C.P.R. (3d) 78 (F.C.A.).

     In Adria Laboratories of Canada Ltd. v. Canada (Minister of National Health and Welfare) (1995), 61 C.P.R. (3d) 82 (F.C.A.) (hereinafter Adria), Stone J.A. allowed the appellant to file three reply affidavits. Stone J.A. considered that it would not serve the interests of justice to prevent the appellant from filing the reply evidence although the court had to ensure that the respondents suffered no substantial prejudice.

     Thus, I must consider three factors when deciding whether to allow the applicants to file the reply evidence in cases such as the one before me: 1) would it serve the interests of justice?; 2) would it assist the Court in making its final determination?; and 3) would it cause substantial or serious prejudice to the respondents?

SUBMISSIONS

1.      Applicants' Submissions

     The applicants do not agree with Apotex' position that the process disclosed to the applicants in the November 29, 1995 letter and the process in Torcan's Drug Master File are identical. The applicants submit that since they did not have access to Torcan's Drug Master File and could not, prior to August 22, refer to the November 29, 1995 letter, the applicants could not comment on the similarities and differences between the synthetic process disclosed to the applicants and that contained in the Torcan Drug Master File. Further, since Apotex has withdrawn its claim that the November 29, 1995 letter is confidential, the applicants submit that this is the first time that the applicants can comment specifically as to how the applicants say that the Apotex process for which the NOC issued is different than what the applicants were told.

     Specifically, the applicants wish to reply to Mr. Oudenes' statements that the process disclosed on November 29, 1995 is the same process that is disclosed in the Torcan Drug Master File referred to in Apotex' NDS. Further, the applicants would like to reply to Mr. Oudenes' comments regarding the chemical reagent referred to in paragraph 16 of his affidavit. The applicants contend that the reagent used in the conversion of B916 to A432 via B930 is not mentioned in the November 29, 1995 letter.

     With respect to the affidavit of Bernard Sherman, the applicants would like to respond to, inter alia, the assertions that the applicants received a notice of allegation with respect to the November 29, 1995 process (paragraphs 3 and 11) and assertions that the processes set out in Apotex' NDS and the November 29, 1995 letter are the same process (paragraphs 6, 8, 9 and 10).

2.      Respondent's Submissions

     The respondent submits that nowhere in the 1600 Rules of the Federal Court Rules is there any reference to Reply affidavit evidence. That if a party desires to vary the Rules so as to be able to file a Reply affidavit, respondent submits that such a party must satisfy the Court "with a reasonable explanation" why this is necessary and that this, as I understand the submission, means that unforeseen circumstances intervened or a "crisis" occurred that prevented the applicant from making the evidence without the need "to vary the Rules".

     The respondent submits the case of Nu-Pharm Inc. v. Attorney General of Canada et al (1994) 56 C.P.R. (3d) 445 for the above principle. In this case, the applicant Nu-Pharm Inc. brought an application to rescind an order made on the Court's own motion dismissing an application for judicial review because of applicant's failure to file its Application Record within the time prescribed by Rule 1606 of the Federal Court Rules. An extension of time for filing the Application Record was also requested.

     Mr. Justice Strayer, in speaking of the request for an extension of time to file the applicant's Application Record, states at page 448 that in order to be granted an extension of time, the material before the judge must provide a reasonable explanation for the delay in not filing the Application Record.

     The facts of the Nu-Pharm case are entirely different from the facts before me. In Nu-Pharm, the applicant deliberately waited to commence preparation of an Application Record until over one month after the filing time had expired.

     The Nu-Pharm case has no application to the facts before me. As well, the case of Pfizer Canada Inc. et al v. Apotex Inc. et al (1996) 67 C.P.R. (3d) 423 is not applicable. In the Pfizer case, the issue was the extension of time for completion of cross-examinations and motion for reattendance not brought until expiry of the deadline in a previous order without a reasonable explanation being given.

     Counsel for the present respondent admits that respondent will not be prejudiced if I were to grant the present application but states that "prejudice" is not a matter to be considered. He states that what is required of the applicant is a "reasonable explanation", the issue of prejudice is of no consequence.

     Furthermore, in a September 12, 1997 letter from counsel for Apotex to counsel for the applicants, counsel for Apotex states that he does not understand the basis of the applicants' entitlement to file reply evidence because Apotex' material "contains information (the applicants) already knew about. There are no new allegations."

DISCUSSION

     As stated previously, I am satisfied there are three factors to consider when evaluating the applicants' request to file reply evidence: 1) would it serve the interests of justice?; 2) would it assist the Court in making its final determination?; and 3) would it cause substantial or serious prejudice to the respondents?

     I speak only of the right to file reply evidence.

     There is little doubt that the introduction of this evidence would serve the interests of justice and assist the Court in making its final determination. The question of whether the synthetic process detailed in the November 29, 1995 letter as being the subject matter of Apotex' allegation is the same process set out in Apotex' NDS is an important issue to be determined. The information which the applicants seek to provide by way of reply evidence goes to the heart of this case.

     Furthermore, the motion by Apotex to strike certain paragraphs in the applicants' affidavits is proof that the letter of November 29, 1995 was highly confidential. Now that the letter is no longer confidential and they now have access to the Torcan Drug Master File, I am satisfied that the applicants should be allowed to provide evidence based on it. Although counsel for Apotex stated that Apotex' evidence contained "information (the applicants) already knew about", that is of no consequence. The issue is not that the applicants did not know this information beforehand, the issue is that the applicants could not reveal this information nor could they provide arguments based on this information to the Court.

    

     The issue remains whether allowing the applicants to file reply evidence would cause substantial or serious prejudice to the respondents. I do not believe that it would as I will incorporate safeguards into my Order. For example, in Adria, Stone J.A. allowed the respondents the right to cross-examine the reply evidence and to extend the cross-examinations which were in progress at the time of the hearing.

     In addition, it is clear from the schedule submitted by the parties that discovery has not been completed so it is unlikely that the effect on the respondents would be serious.

CONCLUSION

     For the reasons stated above, I grant the applicants' request to submit reply evidence within a period of 7 days of my Order allowing the present application. The respondent is granted the right to cross-examine on the Reply affidavits.

                             "Max M. Teitelbaum"

                        

                                 J U D G E

OTTAWA

September 25, 1997