Toronto, Ontario, April 17, 2007
PRESENT: The Honourable Mr. Justice de Montigny
BETWEEN:
SOLVAY PHARMA INC. and ALTANA PHARMA AG
Applicants
and
APOTEX INC. and THE MINISTER OF HEALTH
Respondents
REASONS FOR ORDER AND ORDER
[1] This is an appeal by Apotex Inc. (Apotex) from a decision of the case management prothonotary dated March 27, 2007. The prothonotary granted an extension of time to complete cross-examination, and set a schedule for the remaining steps in this proceeding. Apotex is appealing that order only insofar as it allows Altana Pharma AG (Altana) the opportunity to complete cross-examinations in this matter. It is not objecting to the remainder of the schedule the prothonotary ordered, particularly the date set for the hearing of the within application.
[2] For the reasons that follow, I have concluded the discretionary order should not be disturbed, as Apotex has not convinced me the impugned order is clearly wrong.
Background
[3] On or about January 18, 2006, Apotex delivered a Notice of Allegation (NOA) pursuant to section 5 of the Patented Medicines (Notice of Compliance) Regulations (the Regulations), alleging infringement and validity issues in respect of Canadian Patent Nos. 2,089,748 and 2,092,694. In response, Altana commenced the within proceeding seeking an order pursuant to section 6 of the Regulations, prohibiting the Minister from issuing a Notice of Compliance (NOC) to Apotex for its proposed pantoprazole product.
[4] On April 5, 2006, five days before its evidence was due, Altana moved for an extension of time until October 20, 2006 to file its evidence. The Court refused to grant the extension, but did extend the time to file the applicants’ evidence to July 14, 2006. Then, by notice of motion dated June 21, 2006, Altana sought once again the same extension of time to serve and file its evidence until October 20, 2006. By order dated June 29, 2006, the prothonotary denied Altana’s request.
[5] Altana then brought an appeal of this order, which was subsequently withdrawn. By agreement of counsel subsequent to the hearing of the motion, Altana was given an additional three weeks to serve and file its evidence. As a result, Altana served Apotex with its evidence on August 4, 2006, which consisted of 14 affidavits from 12 different witnesses.
[6] By order dated December 12, 2006, the prothonotary granted Apotex an extension of time, until January 31, 2007, to serve its evidence on Altana. The order also permitted Altana to serve one additional affidavit. This order was made upon the consent of all parties. On January 30, 2007, Apotex served Altana with affidavit evidence from 11 witnesses.
[7] Pursuant to Rule 308 of the Federal Courts Rules (the Rules), all cross-examinations on affidavits must be completed by all parties within 20 days after the respondent’s affidavits are filed, or the time for doing so has expired, whichever is earlier. Since Apotex delivered its evidence on January 30, 2007, the period for cross-examinations expired February 19, 2007.
[8] Pursuant to Rule 309 of the Rules, an applicant shall serve and file an application record within 20 days after all parties have completed cross-examinations, or the time for doing so has expired, whichever is earlier. Since the deadline for completing cross-examinations was February 19, 2007, the applicants were required to serve and file an application record by March 12, 2007.
[9] By notice of motion dated March 14, 2007, the applicants brought a motion to set a schedule, which came for a hearing before Prothonotary Martha Milczynski on March 26, 2007.
The Impugned Order
[10] By Order dated March 27, 2007, the prothonotary allowed the applicants’ motion and set a schedule to govern the remaining steps in this application. The Court ordered that:
1. Cross-examinations shall be completed by September 30, 2007;
2. The applicants shall serve and file their application record and requisition for hearing by October 15, 2007;
3. The respondents’ records shall be served and filed by November 15, 2007;
4. The hearing of this application shall take place at the Federal Court in Toronto, 180 Queen Street West, for five (5) days commencing on December 10, 2007;
5. The costs of this motion are payable in the cause.
[11] In so doing, the prothonotary noted the objection of Apotex’s counsel to granting Altana any extension of time. She wrote:
Apotex submits that the consequence of the Applicants’ failure to comply with the Rules in this regard, should be their loss of any opportunity for cross-examinations, and only as an indulgence, is Apotex prepared to agree that the Applicants be permitted to file an Application Record. Apotex submits it is available and the hearing should be scheduled for June 18, 2007.
[12] As the case manager, the prothonotary was well aware of the parties’ conduct. As the following paragraph of her order reveals, she took that into consideration, as well as the large number of affidavits filed, in concluding a schedule to govern the remaining steps was appropriate in the circumstances:
However, in light of the fourteen affidavits filed by the Applicants, and the eleven affidavits filed by Apotex, it is highly unlikely to say the least that cross-examinations would or could have been completed and records filed in the timeframe under Part V of the Rules following the filing of Apotex’s evidence – for which, I note, Apotex itself benefited from an extension of time. Nonetheless, it cannot be said the Applicants have proceeded with all due haste there have been numerous unsuccessful and duplicative motions for production of Apotex’s pantoprazole tablets and extensions of time.
Analysis
[13] An order to extend time on an application is discretionary. Since it has not been argued (nor could it be) that such an order is vital to the final issue of the case, it should not be disturbed on appeal unless it is 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. (C.A.), [1993] 2 F.C. 425 at page 454).
[14] Before turning to the specific arguments raised by the applicants, it is worth setting out two overarching principles applicable in the present case. First, there is no doubt that in the context of proceedings under the Regulations, the deadlines established under the Rules are of the utmost importance. This is so because an applicant, as a result of commencing a prohibition proceeding under the Regulations, obtains what is tantamount to an interlocutory injunction for up to 24 months without having to justify any of the criteria that would normally be required before enjoining the issuance of a NOC. As the Federal Court of Appeal indicated:
The court has a clear duty to deal with an application expeditiously. Given that, in the scheme of the Regulations, it is the patentee who has both the carriage of the proceeding and the interest in its dilatory prosecution, departures from the schedule imposed by the Part V.1 rules ought not be routine.
Bayer AG v. Canada (Minister of National Health and Welfare) (1993), 51 C.P.R. (3d) 329, at page 337.
See also: Merck Frosst Canada Inc. v. Apotex Inc. (1997), 72 C.P.R. (3d) 170 at pages 175 and 177-178 (F.C.A.); Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1998), 80 C.P.R. (3d) 368 at paragraph 33 (S.C.C.); Merck Frosst Canada Inc. v. Canada (Minister of National Health and Welfare) (1994), 58 C.P.R. (3d) 245 at page 248 (F.C.).
[15] Of equal importance is granting case management judges and prothonotaries proper deference. Because she was well apprised of the facts and of the procedural history of the within application, the prothonotary must be given some latitude to fulfill her mandate. This deference should obviously not be equated with licence to dispense with the Rules at whim, but the Court should be loath to interfere with a discretionary decision on appeal, except in the clearest of cases. As the Federal Court of Appeal wrote in Sawridge Band v. Canada (C.A.), [2002] 2 F.C. 346 at paragraph 11:
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.
See also: Remo Imports Ltd. v. Jaguar Cars Ltd. (2003), 24 C.P.R. (4th) 341 (F.C.); aff’d (2003), 24 C.P.R. (4th) 348 (F.C.A.).
[16] In the present case, Apotex submits the prothonotary erred in law and principle, by failing to apply the correct legal test appropriate to determining whether an extension should be applied. That error, according to Apotex, resulted in part from the prothonotary’s failure to appreciate the true nature of the motion in question. Apotex submits she treated the motion for an extension of time as a mere scheduling conference designed to facilitate the prosecution of this matter.
[17] There is no dispute between the parties that Rule 8 of the Rules permits an extension of time by way of motion. There is also no dispute as to the test for granting an extension of time. In Canada (Attorney General) v. Hennelly (1999), 244 N.R. 399, the Federal Court of Appeal listed the following factors to determine whether an extension should be granted: 1) a continuing intention to pursue his or her application; 2) that the application has some merit; 3) that no prejudice to the respondent arises from the delay; and 4) that a reasonable explanation for the delay exists.
[18] While it is true that the prothonotary did not explicitly go through each and every one of these factors, I am not convinced she reached a decision that is clearly wrong on its facts. One must never lose sight of the fact that the applicants brought the motion for an extension of time in the context of a case-managed proceeding. It would add considerably to the burden of case management if all decisions at every step of the proceedings had to be fleshed out with elaborate written reasons.
[19] It is clear from her reasons that the prothonotary was familiar with the proceeding and aware of the steps taken to date. Not only did Altana bring a motion to extend time for cross-examinations on deponents of affidavits served by Apotex, but it also served Apotex on the same day with a notice of motion seeking leave to file reply evidence. This, in itself, showed a continued intention to pursue the application.
[20] The underlying principle in deciding to grant an extension of time is that justice be done between the parties. Unless an application has no merit, a party should not lose its right to conduct cross-examinations simply because it failed to abide by the timelines provided by the Rules. This is not to say that the time limits prescribed by the Rules are of no consequence and counsel can disregard them without consequence. But when deciding whether the failure to act in conformity with the time limits should be held against a party, regard must be had to all the facts with a view to ensuring the parties are treated fairly. I therefore agree fully with Prothonotary Roger Lafrenière’s approach in Pfizer Canada Inc. v. Apotex Inc. (2005), 39 C.P.R.(4th) 71, where he stated at paragraph 23:
Although I find that improper tactics were used by Apotex in this and the previous motion, which I consider to be a failure to reasonably cooperate in expediting the application, I am also of the view that to deny Apotex an opportunity to file responding evidence would be too draconian a consequence. A party committing a procedural default should not be denied an opportunity to respond to a proceeding unless there is prejudice to the other side which cannot be compensated by costs, or otherwise.
[21] I fail to see what prejudice Apotex will suffer from the order granting an extension of time for cross-examinations. Apotex has not appealed the date set for the hearing, and so cannot complain that cross-examinations will delay the final determination of the issues involved in this application. As for the inconvenience to counsel representing Apotex, who claim to be incapable of conducting the cross-examinations in light of their various commitments, it is simply not a prejudice that can be taken into consideration. Not only is the timetable more than reasonable, but more importantly, the alleged prejudice is not to the party itself.
[22] Apotex also submitted that the prothonotary erred in considering the unlikelihood that the cross-examinations would or could have been completed in the timeframe established under Part V of the Rules. But Apotex’s own evidence was that it fully expected cross-examinations to be completed and the applicant’s record filed within the timelines prescribed by the Rules. The case management prothonotary disagreed and found this was “highly unlikely to say the least”. Apotex cannot now say that the prothonotary considered irrelevant factors when it raised this issue with its own evidence. The prothonotary was not clearly wrong in making this statement and did not misuse her judicial discretion.
[23] Finally, I can see no merits in Apotex’s argument that the prothonotary refused to hear its argument, and had already decided to allow the applicants’ request for an extension by asking that Apotex provide available dates for the hearing prior to counsel delivering submissions. Nor do I find that the prothonotary committed an error in awarding costs. Rule 410(2) clearly provides that the costs of a motion for an extension of time are borne by the party bringing the motion, “unless the Court orders otherwise”. It was therefore open to the prothonotary to make the costs payable in the cause, in the exercise of her discretion.
[24] For all of the above reasons, I would accordingly dismiss this appeal.
ORDER
THIS COURT ORDERS that the appeal is dismissed, with costs in the cause.
“Yves de Montigny”
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-427-06
STYLE OF CAUSE: SOLVAY PHARMA INC. and
ALTANA PHARMA AG Applicants
v.
APOTEX INC. and
THE MINISTER OF HEALTH Respondents
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: April 16, 2007
APPEARANCES:
Lindsay Neidrauer
Natalie Rizkalla-Kamel FOR THE APPLICANTS
Andrew Brodkin FOR THE RESPONDENT
SOLICITORS OF RECORD:
Gowling Lafleur Henderson LLP
Barristers and Solicitors
Toronto, Ontario FOR THE APPLICANTS
Goodmans LLP
Barristers and Solicitors FOR THE RESPONDENT –
Toronto, Ontario APOTEX INC.
John H. Sims, Q.C. FOR THE RESPONDENT –
Deputy Attorney General of Canada MINISTER OF HEALTH