PRESENT: The Honourable Mr. Justice Teitelbaum
BETWEEN:
and
HER MAJESTY THE QUEEN, BRISTOL-MYERS SQUIBB CANADA INC. and BRISTOL-MYERS SQUIBB COMPANY
REASONS FOR ORDER AND ORDER
[1] The Plaintiff Apotex Inc. (Apotex) commenced an action by Statement of Claim dated March 26, 2002 under s.8 of the Patented Medicines (Notice of Compliance) Regulations claiming damages against the Queen for its refusal to process Apotex's abbreviated new drug submission for its antic-cholesterol drug, Apo-Pravastatin. Apotex also claims damages or an accounting of profits against Bristol-Myers Squibb Canada Inc. and Bristol-Myers Squibb Company (collectively BMS) on the grounds that BMS delayed the issuance of an Notice of Compliance to Apotex by failing to discontinue a prohibition proceeding in a timely manner. Apotex alleges that this delay caused by BMS coupled with the BMS Defendants' pre-emptive launch of their own generic pravastatin product caused Apotex to permanently lose market share.
[2] Apotex brought a motion to amend its Statement of Claim to delete references alleging that it had developed a process that did not infringe patents held by the BMS Defendants. This motion was heard by Prothontary Tabib on May 9, 2006, and in her Order dated June 6, 2006 she allowed Apotex to withdraw allegations contained in its Statement of Claim relating to non-infringement. Prothontary Tabib granted both the Queen and BMS leave to serve and file Amended Statements of Defence. The Prothonotary also scheduled the exchange of amended pleadings.
[3] Apotex presently appeals Prothonotary Tabib's June 6, 2006 Order. According to the Plaintiff, Madam Prothonotary Tabib erred in granting the Defendants leave to amend their Statements of Defence and in scheduling the exchange of amended pleadings. Apotex claims that according to an Order of Prothonotary Tabib dated April 13, 2006, amendments to pleadings could be permitted if they were "necessitated by the amendments proposed by the moving party." Apotex claims that the Defendants' amendments were not necessitated by Apotex's amendments, and are not consequential to Apotex's amendment. Apotex submits that the Prothonotary exceeded the terms of her April 13, 2006 Order.
[4] The Plaintiff also claims that the Prothonotary erred by permitting the Defendants to make amendments without bringing a formal motion, which deprived Apotex of its ability to adequately respond to the proposed amendments sought by the Defendants. Apotex also stresses that while a Prothonotary is given latitude to ensure the just, most expeditious and least expensive determination of a proceeding pursuant to Rule 385 of the Federal Courts Rules, she cannot overcome the absence of a motion by acting on her own accord. The Plaintiff relies on Rules 47 and 75 of the Federal Courts Rules to support this position, as well as the following jurisprudence: Merck & Co. v. Apotex Inc. (2003), 28 C.P.R. (4th) 491 at para. 13 (F.C.A.) [Merck]; Apotex Inc. v. the Wellcome Foundation Ltd. (2004), 33 C.P.R. (4th) 166 [Wellcome Foundation]; Nowalsky v. Canada(Treasury Board), [2004] F.C.J. No. 2077, 2004 FCA 418 (QL) at para. 7 [Nowalsky]; Lubana v. Canada(M.C.I.), [1999] F.C.J. No. 1348 at para 9 [Lubana].
[5] Apotex also claims that the Prothonotary erred by permitting the Queen to raise a positive defence by asserting that Apotex would have infringed a patent held by BMS, and by permitting the BMS Defendants to raise the irrelevant matter of Apotex's alleged infringement of BMS's patents, particularly claim 25 of BMS's Canadian Patent No. 1,150,170 (the "'170 Patent"). It is alleged that the Prothonotary erred by permitting the Defendants to raise the matter of alleged infringement of the '170 Patent for the first time at the hearing of the motion.
[6] Finally, Apotex claims that the Prothonotary erred by permitting the BMS Defendants to refer to pleadings in Apotex's original Statement of Claim in their amended Statements of Defence. It also alleges that the Prothonotary erred by requiring Apotex to deliver its proposed reply to the amended Statements of Defence before the defendants had to serve their pleadings.
[7] Given the above errors, the Plaintiff submits that the reviewing Court is not required to show the Prothonotary any deference, and instead should exercise its discretion de novo.
[8] In contrast, BMS claims that the Court should not disturb Prothonotary Tabib's Order. The Defendants submit that by virtue of being a discretionary Order arising out of case management proceedings, the June 6, 2006 Prothonotary's Order must be reviewed against a highly deferential standard of review. BMS asserts that Apotex has failed to demonstrate that the Court should overturn Prothonotary Tabib's Order.
[9] BMS submits that Prothonotary Tabib acted reasonably in exercising her judicial discretion. According to the Defendants, it was reasonable for the Prothonotary to have granted Apotex leave to amend its Statement of Claim, and it was appropriate of the Prothonotary to ensure that the Defendants did not suffer any prejudice by also granting the Defendants leave to amend their Statements of Defence. The Defendants also believe the Prothonotary acted correctly by granting Apotex leave to amend its Replies.
[10] The Defendants submit that the Prothonotary had jurisdiction to grant the Order. They rely on Rule 385 of the Federal Courts Rules, which permits a case management Prothonotary to give any directions that are necessary for the just, most expeditious, and least expensive determination of the proceeding on its merit, as well as on Rule 75, which permits the Court to grant amendments "on such terms as will protect the rights of all parties". The Defendants also note that there is Supreme Court jurisprudence suggesting that when a party relies on a "basket clause" requesting "such further and other relief as this Honourable Court may deem just", the Court may grant relief that is not specifically pleaded: Native Women's Association of Canada v. Canada, [1994] 3 S.C.R. 627 at paras. 647-648. BMS claim that the Defendants did not need to bring a motion for leave to amend their Statements of Defence.
[11] The Defendants assert that whether Apotex did or did not infringe BMS's patents at issue is a relevant matter in the action. The Defendants claim that the question of infringement is a key component of Apotex's own case. According to BMS, for Apotex to succeed in its action, Apotex will have to demonstrate that it suffered damages and has a valid claim under s.8 of the Patented Medicines (Notice of Compliance) Regulations. However, if Apotex did not develop a non-infringing processes, then it had no right to enter the market, BMS would have had a valid reason for commencing a proceeding, and Apotex would not have a valid claim for damages from them. The Defendants submit that Apotex will have to establish at trial that the BMS Defendants did not have a valid basis to commence a proceeding, and that Apotex was not infringing the '170 Patent. In sum, the Defendants submit that the issue of infringement goes to both Apotex's claim for damages as well as the BMS Defendants' defence, and is therefore clearly relevant.
[12] BMS claims that the Prothonotary's decision should be upheld since the amendments will not cause prejudice to the other parties. The Defendants note that they would have been prejudiced had they been unable to respond the Plaintiff's Amended Statement of Claim. The Defendants also allege that their amendments do not prejudice Apotex. BMS asserts that the Plaintiffs were provided an opportunity to respond to the Defendants' proposed amendments at the hearing, but that they did not take the position that they would be prejudiced by them. The Defendants also submit that it was agreed by all of the parties that the amendments would not affect the pre-trial order and that the factual issues framed by the pleadings would not be changed by the amendments. Finally, BMS suggests that Apotex will not be prejudiced by the Defendants' amendments, since Apotex has been permitted to argue that whether it infringed the patents at issue is irrelevant to its action.
[13] In short, the BMS Defendants claim that the Prothonotary correctly exercised her discretion by permitting the amendments by both parties on the basis of fairness, common sense, and the interest that the Court has that justice be done: Scanner Industries Inc. et al. v. Minister of National Revenue (1993), 69 F.T.R. 310 at para. 26 (F.C.T.D.), affirmed (1994), 172 N.R. 313 (F.C.A.).
[14] It is trite law that a Prothonotary's Order ought not be disturbed on appeal to a Judge unless:
- the questions raised in the motion are vital to the final issue of the case
- 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.
Canada v. Aqua-Gem Investments Ltd., [1993] 2 FC 425 [Aqua-Gem]; Merck & Co. v. Apotex Inc., [2003] F.C.J. No. 1925, 2003 FCA 488.
[15] The Federal Court of Appeal has stated that, "Case management judges must be given latitude to manage cases. This Court will interfere only in the clearest case of misuse of judicial discretion": Sawridge Band v. Canada, 2001 FCA 388, [2001] F.C.J. No. 1684, at para. 11.Justice Gibson of the Federal Court has held that, "Case management prothonotaries must be given latitude to manage cases in the same manner in which case management judges are entitled to such latitude": Microfibres Inc. v. Annabel Canada Inc. et al., (2001), 16 C.P.R. (4th) 12 at para. 11 [Microfibres]. In Bates EnterpriseLtd. v. Canada, [2002] F.C.J. No. 140, 2002 FCT 123 (QL) at para. 11, Justice Dawson agreed and adopted the reasons of Justice Gibson. I similarly adopt Justice Gibson's reasons in Microfibres, above.
[16] Prothonotary Tabib's June 6, 2006 Order is a discretionary Order arising out of case management proceedings, and the jurisprudence makes it clear that the Court must review it under a deferential standard.
[17] Apotex argues that the Court cannot exercise its own discretion in the absence of a motion by acting of its own accord: Nowalsky, above at para. 7; Lubana, above, at para. 9. The Plaintiff also relies on Wellcome Foundation, above, where a reviewing Court found that the Prothonotary erred by granting an Order when the requisite motion was not first brought before the Court. Apotex argues that the Prothonotary erred in this matter by permitting the Defendants to amend their Statements of Defence when amendments can only be granted on a motion, and that in rendering her decision, the Prothonotary trumped Apotex's legal right to make representations.
[18] I see no reason to interfere with the Prothonotary's decision. In the present matter, unlike in the impugned decisions in Nowalsky above, and Lubana above, the Court did not act of its own accord. Rather, it acted on a motion brought by Apotex to amend its Statement of Claim. In my view, Apotex's motion to amend its Statement of Claim could reasonably enable the Court to permit the Defendants to amend their Statements of Defence, and the present matter is therefore also distinguishable from Wellcome Foundation, above. In the present matter, the Plaintiff brought a motion, and under Rule 75 of the Federal Courts Rules, the Prothonotary clearly had the discretion "to amend a document, on such terms as will protect the rights of the parties" (emphasis added). In my view it was entirely reasonable for the Prothonotary to have allowed Apotex to amend its Statement of Claim, on the terms that the Defendants be permitted to similarly amend their Statements of Defence.
[19] In my view, this decision served to protect the rights of the Defendants, pursuant to Rule 75 of the Federal Courts Rules, and did so without causing prejudice to Apotex. Apotex conceded that BMS would be able to raise its defence asserting infringement. When Apotex requested to withdraw allegations contained in its Statement of Claim relating to non-infringement, it was reasonable, logical, expeditious, efficient and just for the Prothonotary to allow the Defendants to make corresponding amendments to their Statements of Defence. But the Prothonotary preserved Apotex's right to make representations as to the relevancy of these issues. The Prothonotary clearly stated at page 2 of her Order:
While [Apotex] seeks an order striking those parts of the BMS statements of defence responding to these allegations, it conceded at the hearing that BMS would be perfectly entitled to keep those parts of their defence which assert infringement, in which case Apotex would then file an amended reply reasserting the lack of relevance of these issues, and reproducing the same allegations of non-infringement as are contained in the original statement of claim.
(emphasis added)
[20] While Apotex may disagree with the decision to allow the Defendants to allege that Apotex infringed patents held by the BMS Defendants, or to refer to statements contained in Apotex's original Statement of Claim, Apotex will be able to make full submissions as to the relevancy of the Defendants' submissions on these issues at a later date. It is clear that Apotex has not lost its ability to respond to any amendments to the Defendants' Statements of Defence. Apotex clearly has not lost its right to make representations, and has not been prejudiced by the Prothonotary's Order.
[21] The Prothonotary's Order does not go towards issues vital to the final issues of the case, and her Order is not clearly wrong. Following Aqua-Gem, above,the Court sees no reason to interfere with the Prothonotary's decision.
ORDER
THIS COURT ORDERS that the motion of appeal is denied with costs.
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-485-02
STYLE OF CAUSE: Apotex Inc. v. Her Majesty the Queen, Bristol-Myers Squibb Canada Inc. and Bristol-Myers Squibb Company
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: June 19, 2006
REASONS FOR ORDER: TEITELBAUM J.
APPEARANCES:
| Jerry Topolski
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| Patrick Smith
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SOLICITORS OF RECORD:
| GOODMANS LLP Barristers & Solicitors Toronto, Ontario
|
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| GOWLINGS LAFLEUR & HENDERSON LLP Barristers & Solicitors Ottawa, Ontario
|