Date: 19980820 Docket: T-35-96 and T-591-96
BETWEEN:
BAYER AG and BAYER INC
Applicants.
AND
APOTEX INC. and THE MINISTER OF NATIONAL HEALTH AND WELFARE
Respondents.
REASONS FOR ORDER
ROTHSTEIN,J.:
[1] In court files T-35-96 and T-591-96 Apotex moves to strike a replacement and reply affidavit filed by Bayer on the grounds that Apotex' agreement to the filing of the affidavit and the consent court order allowing it were obtained by misrepresentation.'
1 There. is no right to file a reply or a replacement affidavit. A court order authorising such filing is required.
Page: 2 [2] The relevant facts are these. These are prohibition applications under the Patented Medicines (Notice of Compliance) Regulations in respect of the medicine Ciprofloxacin. One of Apotex' allegations was that Bayer's patent was invalid because it was obtained without disclosure to the Canadian Patent Office of prior Chilean patent proceedings covering Ciprofloxacin, and because the Chilean patent application was filed more than one year before the Canadian patent application. To address this issue Bayer filed the affidavit of Ramon Leiva, a Chilean lawyer and patent attorney. In response, Apotex filed the affidavit of Vladimir Garcia Huidoboro, also a Chilean lawyer and patent attorney.
[3] It appears that although cross-examination on his affidavit would be required and he would be asked to file a reply affidavit to the affidavit of Mr. Huidoboro, Mr. Leiva did not want to participate further in the proceedings. Bayer was informed by its Chilean agent that Mr. Leiva's reason for not wishing to participate further was on account of severe heart disease in June, 1996, after the filing of his original affidavit. Bayer advised Apotex of this information. Because illness was the reason for Mr. Leiva not being able to participate further, Apotex agreed that the Leiva affidavit could be withdrawn and that a reply affidavit of Santiago Larraguibel Zavala, a Chilean lawyer and patent attorney, could be utilized by Bayer both in reply and in replacement for the Leiva affidavit. The Zavala affidavit would be both a replacement for the Leiva affidavit and a reply to the Huidoboro affidavit. Nadon, J. granted a consent motion by Bayer to file the Zavala affidavit.'
' The actual sequence of events was that Bayer applied to file a reply affidavit. The affidavit contained evidence which was in replacement for the Leiva evidence. After the affidavit was filed Apotex did not object to the replacement portion of that evidence because of the representation made to it relative to Mr. Leiva.
Page: 3 [4] Through its contacts in Chile, Apotex subsequently ascertained that the story regarding Mr. Leiva's ill health in June of 1996 may have been untrue. Apotex conducted an investigation and found out that Mr. Leiva had not been ill at that time. Indeed Apotex obtained an affidavit from Mr. Leiva himself to that effect. In this affidavit Mr. Leiva states that he advised Bayer when he signed his first affidavit that he did not wish to be involved further and that his refusal to provide a further reply affidavit was based on his original stated intention not to participate further, and not on any subsequent ill health.
[5] Apotex now says it would never have agreed to the Zavala affidavit had the alleged ill health of Mr. Leiva not been represented to it and that it would have simply moved to strike the original Leiva affidavit if Mr. Leiva did not appear for cross-examination. As a result of Mr. Leiva not participating further and the misrepresentation which was the basis for the Zavala replacement evidence, Apotex says that both the Leiva and Zavala affidavits should be struck.
[6] While there is some dispute as to exactly who said what to whom and when in the affidavit evidence and cross-examinations, I find as a fact, on a balance of probabilities, that Mr. Leiva did represent to Bayer's Chilean agent that he did not wish to participate further because of ill health and that such representation was made only after he had been asked to
file a responding affidavit. The other alternative, that Bayer's representative in Chile made up the story about Mr. Leiva' S ill health is not likely. Indeed the ill health story was based on heart disease which Mr. Leiva admits, although he says he had a heart attack a few years
Page: 4 earlier and was in good health in June of 1996. It would be a strange coincidence that the details of Mr. Leiva's health problems would be known to Bayer's agent unless they were told to him by Mr. Leiva. In addition there is correspondence at the relevant time between Bayer's Chilean agent and Mr. Leiva that is only consistent with Mr. Leiva's ongoing participation, or at least Bayer's honest belief that Mr. Leiva would continue to participate. Had Mr. Leiva refused to participate immediately after signing his first affidavit, this subsequent correspondence would not logically follow.
[7] Apotex points to some lapses and inconsistencies in the cross-examination of Bayer's Chilean agent but I do not consider them material. In the circumstances I am satisfied with the truth of Bayer's account of the facts.
[8] What occurred, however, still amounts to what I would refer to as an innocent misrepresentation by Bayer which led Apotex to agree to the replacement aspect of the Zavala affidavit. While analogies must be made with care, the circumstances here suggest to me a parallel to an innocent misrepresentation in the context of contract law which could give rise to recision of the contract. Here this might ground an argument by Apotex that since Apotex agreed to Leiva's affidavit being withdrawn because he did not appear for cross-examination and Zavala's replacement evidence being substituted on the basis of an innocent misrepresentation by Bayer, that the Leiva affidavit, the replacement Zavala evidence and Apotex' reply evidence to the Leiva evidence should be struck. This solution would take account of Mr. Leiva's failure to appear for cross-examination and the misrepresentation
Page: 5 giving rise to the Zavala replacement evidence. In other words only the Huidoboro evidence, to the extent it was not in response to Leiva's initial evidence, and the Zavala evidence, only to the extent it replied to Huidoboro's independent evidence, should remain.
[9] However, there are two difficulties with this solution. First Apotex refuses to withdraw any portion of Huidoboro's evidence, i.e. that portion which is in response to the Leiva affidavit as well as that portion which is independent of the Leiva evidence. It seems somewhat inconsistent for Apotex to insist that Bayer's original and replacement evidence be struck but that Apotex' evidence in reply to the struck evidence should remain. More significantly, however, there is a practical problem of segregating the response and independent evidence of Huidoboro and the replacement and reply evidence of Zavala. Indeed, there has already been cross-examination on both affidavits and it would seem unrealistic to try to segregate the cross-examinations as between what should be struck and what should remain. The hearing on the merits of the prohibition application is scheduled for October 5, 1998 and the filing of new affidavits and engaging in new cross-examinations of. deponents in Chile, including motions for same, is not a practical alternative.
[10] In the circumstances, while the initial Leiva affidavit should be struck because he did not appear for cross-examination, as the Huidoboro affidavit will remain in its entirety, the Zavala evidence should also remain. While Apotex has been the victim of an innocent misrepresentation, I think this minimizes the prejudice (if
limited proceedings. Apotex has had the opportunity to cross-examine Mr. Zavala and it is
y) and disruption in these time-
Page: 6 fully open to Apotex to argue on the merits of Bayer's position with respect to Chilean Patent Law and proceedings in support of its allegation that Bayer's Canadian patent for Ciprofloxacin is invalid. I am satisfied that while this result is not perfection, it is adequate.
[11] In procedural disputes such as this one in which the Court is required to exercise its discretion having regard to fairness and the expedition of proceedings, each case will turn on its own facts. However, it is important to note that, as a general rule, affidavits will be struck if the deponent does not appear for cross-examination and replacement affidavits will not be allowed if there are not justifiable grounds.
[12] Apotex' motion to strike the original Leiva affidavit is granted. Its motion to strike the Zavala affidavit and cross-examination is dismissed. Apotex' alternative relief, that Leiva's second affidavit relating to his ill health be admitted as part of the record is dismissed. Its usefulness in the proceedings on the merits has not been established.
[13] It was the innocent representation made by Bayer that has given rise to these proceedings. Although Bayer has been successful on this motion, there will be no award of costs.
Toronto, Ontario August 21, 1998
"Marshall Rothstein"
Judge
FEDERAL COURT OF CANADA Names of Counsel and Solicitors of Record
COURT FILE NO.: T-35-96 and T-591-96
STYLE OF CAUSE: BAYER AG and BAYER INC v.
APOTEX INC. and THE MINISTER OF NATIONAL HEALTH AND WELFARE
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: FRIDAY, AUGUST 21 , 1998
REASONS FOR
ORDER BY: ROTHSTEIN, J.
DATED: FRIDAY, AUGUST 21, 1998
APPEARANCES: Mr. Neil Belmore
REPRESENTING BAYER AG, et al
Mr. Harry Radomski Mr. Andrew Brodkin
REPRESENTING APOTEX INC., et al
SOLICITORS OF RECORD:
Gowling, Strathy & Henderson 4900 Commerce Court West, PO Box 438,
Stn. Commerce Court Toronto, Ontario M5L 1J3
FOR BAYER AG., et al
Goodman, Phillips & Vineberg Box 24, 2400-250 Yonge Street, Toronto, Ontario
M5B 2M6
FOR APOTEX INC., et al