Docket: T-2792-96
Neutral citation: 2003 FCT 160
Ottawa, Ontario, this 13th day of February 2003
Present: THE HONOURABLE MR. JUSTICE SIMON NOËL
BETWEEN:
MERCK & CO., INC.
MERCK FROSST CANADA & CO.
ZENECA LIMITED
ASTRAZENECA UK LIMITED and
ASTRAZENECA CANADA INC.
Plaintiffs
(cross-defendants)
and
APOTEX INC.
Defendants
(cross-plaintiff)
REASONS FOR ORDER AND ORDER
[1] This is a motion by the defendant, Apotex Inc. ("Apotex"), pursuant to Rule 51 of the Federal Court Rules, 1998, for an appeal of the Order of Prothonotary Morneau, dated August 21, 2002, dismissing Apotex's motion to compel answers to the questions which the plaintiffs, Merck & Co., Inc. and Merck Frosst Canada & Co. ("Merck plaintiffs") refused to answer during the examination for discovery.
[2] Apotex seeks an Order setting aside the prothonotary's decision and an Order requiring the representatives of the Merck plaintiffs to re-attend for discovery and answer the questions that were refused.
BACKGROUND
[3] The underlying action, issued in 1996, concerns allegations relating to the infringement and validity of Canadian Letters Patent No. 1,275,350 ("'350 Patent'"), including amongst other claims, a class of compound containing lisinopril, a medicine used for reducing hypertension. The issues in dispute in the main proceeding are confined to whether or not the lisinopril acquired by Apotex is infringing, and whether the '350 Patent' is valid.
[4] Apotex pleaded that the lisinopril it acquired and subsequently sold is non-infringing because it was either (i) made before the '350 Patent' issued on October 16, 1990, or (ii) was made and sold by a licensee under the '350 Patent' before the licence was extinguished, or (iii) its use and sale of lisinopril dihydrate is not claimed in the '350 Patent'.
[5] On October 22-26, 2001, January 28-30 and, March 5, 6, 12 , 13 and 26, 2002, the representative for Merck & Co., Inc. ("Merck"), Dr. Matthew Wyvratt, one of the inventors of the lisinopril, attended at the examination for discovery. On October 29, 2001, the representative for Merck Frosst Canada & Co. ("Merck Frosst"), Philippe Hébert, attended for examination for discovery. Throughout the discoveries, numerous questions were either refused or taken under advisement by counsel for the Merck plaintiffs. As stated by the prothonotary, when Apotex filed its motion record, nearly 800 questions and 133 undertakings were still in dispute between the parties. In view of the large number of questions outstanding, the questions were presented to the prothonotary in the form of some 26 categories.
DECISION OF THE PROTHONOTARY
[6] By Order and Reasons for Order, dated August 21, 2002, Prothonotary Morneau ordered that the majority of the questions refused did not have to be answered. He determined that:
"the principal problem was whether the Court should take the approach recommended by Apotex and, essentially, allow any relevant question arising from the allegations not admitted in the proceedings, or specifically here[,] the questions based on paragraph 19 of Apotex's defence and counterclaim, or whether the Court should regard this opportunity to limit the scope of the examination which Apotex is conducting so as to move the case at bar forward as quickly as possible, within the spirit of Rule 3 of the Federal Court Rules, 1998."
[7] The prothonotary acknowledged that there is "a considerable weight of authority" that can be relied on in support of Apotex's position that neither Merck nor the Court can seek to limit the examination for discovery of the Merck representatives in relation to paragraph 19 of its defence.
[8] However, he considered that the practical reality where the Court may wish to see the case move forward in accordance with Rule 3 and its powers of case management outweighs the theoretical approach.
[9] Therefore, the prothonotary approved and adopted the plaintiffs' approach so as to limit the scope of the examination held by Apotex, thus concentrating most of the information to be provided on the compounds relating to Patent '350, and very little information on what is not within Patent '350.
[10] Prothonotary Morneau based his discretionary decision on the Federal Court of Appeal decision Sawridge Band v. Canada (C.A.), [2002] 2 F.C. 346, in which the Court recognized that the person responsible for a specially managed proceeding has a discretion broad enough to move the case forward.
Standard of review
[11] The standard of review governing appeals of discretionary decisions of a prothonotary is well established. In Canada v. Aqua-Gem Investments Ltd. [1993] 2 F.C. 425 (F.C.A.), at paragraph 95, MacQuigan J.A., explained the standard of review to be applied by a motion Judge when reviewing a discretionary decision of a prothonotary as follows:
"Following in particular Lord Wright in Evans v. Bartlam [1937] A.C. 473 (H.L.) at page 473 (H.L.) at page 484 and Lacourcière 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 facts; or
b. they raised questions vital to the final issue of the case.
[12] As we are not presented with a situation where the order raises a question vital to the final issue of the case, the applicable standard of review here is whether or not the prothonotary's discretionary order is clearly wrong.
ISSUE
[13] Did the prothonotary exercise his discretion based on a wrong principle or a misapprehension of the facts so as to render his decision clearly wrong?
SUBMISSIONS AND ANALYSIS
[14] Apotex submits that the prothonotary erred in law and in principle by failing to give effect to the well-established principle underlying the scope of any documentary and oral discovery, namely, relevance to the pleaded issues, solely in order to "move the case forward". Apotex claims that it fulfilled the relevancy test and, therefore, the questions should have been ordered answered. A document is relevant if the document tends to adversely affect the party's case or support another party's case. In Society of Composers, Authors and Music Publishers of Canada v. 1007442 Ontario Ltd., [2000] F.C.J. No. 191 at paragraph 20, Justice Cullen stated that "according to the recent jurisprudence, a relevant document ought to be one that might reasonably be supposed to contain information which may directly or indirectly enable the party seeking the production to advance his own case or damage the case of his adversary". Apotex further submits that the relevancy test for the production of documents is not a matter for the exercise of discretion, but rather a matter of law. [See also: Reading & Bates Construction Co. v. Baker Energy Resources Co. (1988), 24 C.P.R. (3d) 66 at 70-71, per McNair J. and, Monit International Inc. v. Canada (1999)175 F.T.R. 258 at 261, per Lemieux J.]
[15] Apotex submits that the prothonotary improperly utilized the procedural jurisdiction conferred upon case management prothonotaries to deny Apotex its substantive right to full discovery. According to Apotex, the prothonotary's status does not confer a jurisdiction to re-write the rules and legal principles governing the scope and conduct of discoveries. Apotex contends that neither Rule 3 nor Rule 385(a) justifies declining to order answers to relevant questions and that both Rules require a prothonotary to act so as to secure the "just, most expeditious and least expensive determination of the proceeding on its merits." Consequently, denying a party's right to full discovery, arguably, cannot be "just", and will frustrate the Court's ability to determine the allegations "on the merits".
[16] In James River Corp. of Virginia v. Hallmark Cards, Inc. (1997), 72 C.P.R. (3d) 157 at 160-61, Justice Reed studied the meaning of discretion in situations where an order for answers is required. She stated the following:
Counsel raised the question, at least with respect to category 7, on page 168 infra, whether the decisions of the Associate Senior Prothonotary could be said to be discretionary ones. If they are not, the logical consequence would be that a judge should apply a more stringent test when reviewing the orders on appeal. It is difficult to characterize a prothonotary's authority to require that a person, being examined for discovery, reattend to answer questions as discretionary, if that term is being used only to signify a situation in which there is room for reasonable people to hold differing opinions as to the appropriate decision. The prothonotary's authority to require that certain questions be answered on discovery is not of that nature.
A useful explanation of the use of the label discretion, however, is found in the text R.P. Kerans, Standards of Review Employed by Appellate Courts (1994) at 122-149. Discretion is described as a term that is used for two categories of decisions: (1) those involving the management of the trial and the pre-trial process; and (2) those where the rule of law is one that makes many factors relevant and requires a decision-maker to weigh and balance them. In both cases "the inclination of the reviewing courts has always been to govern with a light hand. They do this by assigning the issue to the `discretion' category." [page 125] The text notes that courts use this terminology to describe most interlocutory matters including, for example, the amendment of pleadings, the striking of pleadings and "a host of other situations where the judge manages or supervises ... the process of preparation for trial". [Ibid] It is in this sense that I understand the Aqua-Gem case to be using the term discretionary when speaking of decision-making by a prothonotary.
Also, the Chief Justice in the Aqua-Gem case, at 446, clearly indicated that an order requiring the giving of particulars is a discretionary order. An order with respect to the giving of answers on discovery is of a similar nature. [my emphasis]
[17] In light of the new case management rules, I agree with Justice Reed's interpretation as it reflects the underlying reasons for the existence of case management rules. Thus I conclude that the prothonotary's order in here is one which was within his discretionary powers. It is important to give more latitude to the case management judges or prothonotaries in order for them to manage a case according to the objectives of the Court Rules. Ordering answers to questions refused during discoveries affects the pre-trial process and the time management of a file, thus falling within the powers of the prothonotary managing the case.
[18] Furthermore, Apotex claims that the prothonotary erred by using the perceived size and complexity of the issues raised in the pleadings to justify curtailing a vast number of relevant enquiries. It contends that it is critical for it to understand all the work undertaken by the inventors in the course of developing the invention and the process that ultimately led to the purported invention and the issuance of the '350 Patent'.
[19] Contrary to Apotex's allegation, Prothonotary Morneau did rule on relevancy of the questions in debate. At paragraph 22 of his decision, he approved and adopted (in the original French version, the prothonotary used the verb "cautionner", which I think has an even stronger meaning than "adopting") Merck's approach, which was summarized at paragraph 21 of his decision:
In short, it can be seen from paragraph 18 of the Merck's written submissions that the latter suggest concentrating most of the information to be provided on the compounds relating to patent 350, and very little information on what is not within patent 350. The result of this approach by Merck is to largely reject questions under objection under the motion at bar. It is rather like a pyramid approach: a lot of information at the apex of the pyramid (which comes within patent 350) and little information on what appears to be the broad base of the pyramid."
[20] Consequently, it is wrong for Apotex to allege that the prothonotary did not look at the relevancy. He exercised his discretion to determine that some elements necessitated more attention than others and as a result chose to exercise his discretion to limit the scope of the discovery in order to move the case forward.
[21] The position of the Federal Court of Appeal on appeals from orders of case management judges has been clearly stated by Justice Rothstein in Sawridge, supra:
We would take this opportunity to state the position of this Court on appeals from orders of case management judges. Case management judges must be given latitude to manage cases. This Court will interfere only in the clearest case of a misuse of judicial discretion. This approach was well stated by the Alberta Court of Appeal in Korte v. Deloitte, Haskins and Sells (1995), 36 Alta. L.R. (3d) 56, paragraph 3, and is applicable in these appeals. We adopt these words as our own.
This is a very complicated lawsuit. It is subject to case management and has been since 1993. The orders made here are discretionary. We have said before, and we repeat, that case management judges in these complex matters must be given some "elbow room" to resolve endless interlocutory matters and move these cases on to trial. In some cases, the case management judge will have to be innovative to avoid having the case bog down in a morass of technical matters. Only in the clearest cases of mis-use of judicial discretion will we interfere. In this case, the carefully crafted orders made by the case management judge display a sound knowledge of the rules and the related case law. In particular, the order contains a provision that the parties are free to return to the case management judge for relief from the imposition of any intolerable burden imposed by the order. No clear error has been shown and we decline to interfere. While there may be some inconvenience to some of the parties, this does not translate into reversible error. We are not here to fine tune orders made in interlocutory proceedings, particularly in a case such as this one.
[22] In subsequent decisions, this Court confirmed that this approach applies to discretionary decisions of prothonotaries made in the course of case management in complex matters [Microfibres Inc. v. Annabel Canada Inc. (2001), 16 C.P.R. (4th)12 and Bates Enterprise Ltd. v. Canada, [2002] F.C.J. No. 140].
[23] Prothonotary Morneau was not obligated to restrict himself only to the relevancy test. In the circumstances, I consider that the he exercised his discretion in weighing the relevance, or lack thereof, of the questions sought to be adjudicated and the scope of the pleadings against the need to ensure that the proceedings be resolved expeditiously. In applying the Rules, Prothonotary Morneau appropriately considered reducing the cost of trial and bringing matters to trial as quickly as possible, pursuant to Rules 3 and 385, as important factors when deciding to exclude certain categories of questions.
[24] In this respect, as the prothonotary responsible for the case management of this proceeding, Prothonotary Morneau was aware of the dynamics of the case and, was able to assess the parties' conduct. Hence, the manner in which he exercised his discretion is reasonable. Therefore, I conclude that his decision should not be disturbed.
[25] Having determined such, there is no need to address the more specific issues relating to specific categories of questions.
ORDER
THIS COURT ORDERS THAT:
The appeal of the decision of Prothonotary Morneau, dated August 21, 2002, is dismissed. Costs to follow the cause.
"Simon Noël"
Judge
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2792-96
STYLE OF CAUSE : MERCK & CO. INC, AND MERCK FROSST
CANADA INC. & Co., & All and
APOTEX INC.
PLACE OF HEARING : Ottawa, Ontario
DATE OF HEARING : January 8th, 2003
APPEARANCES :
Ms. Denise Lacombe For Plaintiffs-Syngenta Ltd. & al
Ms. Judith A. Robinson For the Plaintiffs - Merck & Co.
Ms. Frédérique Amrouni For Merck Frosst Canada & Co.
Mr. David M. Scrimger FOR THE DEFENDANT
Ms. Nicole Roth
SOLICITORS OF RECORD :
SMART & BIGGAR
Barristers & Solicitors FOR THE PLAINTIFFS
Toronto, Ontario
Goodmans FOR THE DEFENDENT
Barristers & Solicitors
Toronto, Ontario