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«BETWEEN: HOSPIRA HEALTHCARE CORPORATION Appellant (Plaintiff) and THE KENNEDY INSTITUTE OF RHEUMATOLOGY Respondent (Defendant) AND BETWEEN: THE ...»

-- [ Page 1 ] --

Date: 20160831

Dockets: A-303-15

Citation: 2016 FCA 215

CORAM: NADON J.A.

PELLETIER J.A.

RENNIE J.A.

DE MONTIGNY J.A.

GLEASON J.A.

BETWEEN:

HOSPIRA HEALTHCARE CORPORATION

Appellant

(Plaintiff)

and

THE KENNEDY INSTITUTE OF

RHEUMATOLOGY

Respondent (Defendant)

AND BETWEEN:

THE KENNEDY TRUST FOR

RHEUMATOLOGY RESEARCH, JANSSEN

BIOTECH, INC., JANSSEN INC. and CILAG Gmbh INTERNATIONAL Respondents (Plaintiffs By Counterclaim) Page: 2 and

HOSPIRA HEALTHCARE CORPORATION,

CELLTRION HEALTHCARE CO., LTD. and CELLTRION, INC.

Appellants (Defendants By Counterclaim) Heard at Ottawa, Ontario, on April 15, 2016.

Judgment delivered at Ottawa, Ontario, on August 31, 2016.

REASONS FOR JUDGMENT BY: NADON J.A.

CONCURRED IN BY: PELLETIER J.A.

RENNIE J.A.

DE MONTIGNY J.A.

GLEASON J.A.

Date: 20160831 Dockets: A-303-15 Citation: 2016 FCA 215 CORAM: NADON J.A.

PELLETIER J.A.

RENNIE J.A.

DE MONTIGNY J.A.

GLEASON J.A.

BETWEEN:

HOSPIRA HEALTHCARE CORPORATION

Appellant (Plaintiff) and

THE KENNEDY INSTITUTE OF

RHEUMATOLOGY

–  –  –

NADON J.A.

I. Introduction [1] Before us is an appeal of an order made by Mr. Justice Boswell of the Federal Court (the Motions Judge) on June 18, 2015 wherein he dismissed the Appellants’ appeal from the Order of Madam Prothonotary Milczynski (the Prothonotary) rendered on April 17, 2015 pursuant to which she ordered, inter alia, that the additional examination of two witnesses by the Appellants would be limited to one half day per witness by teleconference.

[2] By order of the Chief Justice, this appeal was heard by a panel of five judges. At issue is the question of whether this Court should revisit the standard of review applicable to discretionary orders made by prothonotaries enunciated in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, 149 N.R. 273 [Aqua-Gem]. The Respondents invite us to abandon the standard of review set out in Aqua-Gem and to replace it by the standard enunciated by the Supreme Court of Canada in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 [Housen].

For the reasons that follow, it is my view that we should abandon the Aqua-Gem standard and

–  –  –

[3] The Kennedy Trust for Rheumatology Research (Kennedy), one of the Respondents, is the owner of patent number 2,261,630 (the ‘630 Patent) entitled “Anti-TNF Antibodies and Methotrexate in the Treatment of Autoimmune Disease”. The two named inventors of this patent, Sir Ravinder Nath Maini (Dr. Maini) and Sir Marc Feldman (Dr. Feldman) (the inventors), are retired and live in the United Kingdom. They are respectively 79 and 71 years old.

[4] On March 6, 2013, the Appellant Hospira Healthcare Corporation (Hospira) commenced an action against Kennedy seeking, inter alia, declarations that the ‘630 Patent was invalid and that Hospira’s proposed product did not infringe the ‘630 Patent.

[5] On October 4, 2013, Kennedy and the other Respondents, namely Janssen Biotech, Inc., Janssen Inc. and Cilag GmbH International counterclaimed against Hospira and the other Appellants, namely Celltrion Healthcare Co., Ltd. and Celltrion, Inc. seeking, inter alia, declarations that the ‘630 Patent was valid and that the Appellants had infringed or induced infringement of the ‘630 Patent.

In May 2014, the Appellants conducted a discovery of each of the two inventors – in [6] London for Dr. Maini and in New York for Dr. Feldmann where he happened to be travelling.

However, the Appellants were unable to complete the examinations. Prior to the examinations, counsel for the Appellants had requested two days of discovery for each of the inventors, but that

–  –  –

inventor was sufficient. Consequently, at the end of the first day, the examination of each inventor was terminated by the Respondents.

[7] On July 31, 2014, the Appellants brought a motion seeking, among other things, to continue the examination of the inventors, at their own expense, for one additional day per inventor. The Appellants sought to examine the inventors in Toronto.

III. Decisions Below A. Order Of The Prothonotary The Appellants’ motion was heard in Toronto on March 10, 2015 by the Prothonotary [8] who had been case managing the action from the outset. On April 17, 2015, she ordered that “Hospira and Celltrion shall complete the examination of each of Dr. Feldmann and Dr. Maini in one-half day (each), which examinations shall be conducted by teleconference, unless otherwise agreed to by the parties” (paragraph 6 of her order).

B. Order Of The Motions Judge On June 18, 2015, the Motions Judge dismissed the Appellants’ appeal from the [9] Prothonotary’s order. Applying the standard of review set out in Aqua-Gem, the Motions Judge stated that the re-attendance of the inventors and their continued examination was not vital to the final issue of the case, and that the Prothonotary’s order was not clearly wrong. He emphasized that the Federal Court was reluctant to interfere with case-management decisions made by prothonotaries who were to be given “elbow room” in performing “a difficult job” (paragraph 4

–  –  –





[10] The Motions Judge concluded that the Prothonotary had properly exercised her discretion and that she had rendered “not only a focused decision but a reasonable one as well” (paragraph 5 of his order). He further held that the motion before him was of “questionable necessity or merit” and that it “undermine[d] the objectives of the case management system” (paragraph 6 of his order).

–  –  –

[11] The appeal raises the two following questions:

i. Should this Court reconsider the standard of review applicable to discretionary

–  –  –

[12] The Appellants say that the standard of review applicable to discretionary decisions made by prothonotaries is the one set out by this Court in Aqua-Gem, as reiterated by the Supreme Court in Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27, [2003] 1 S.C.R. 450, at paragraph 18 [Pompey]. The Appellants further say that the standard of review on appeal to this Court with respect to questions of law is correctness and palpable and overriding error in regard

–  –  –

[13] The Appellants argue that the Motions Judge erred in that he allowed the Respondents to thwart their right to examination for discovery under Rule 237(4) of the Federal Courts Rules, SOR/98-106 (the Rules) which provides that “where an assignee is a party to the action, the assignor may also be examined for discovery”. There is no dispute between the parties that the inventors, as assignors of the patent at issue, can be examined by the Appellants under the Rule.

Contrary to the Motions Judge’s view that “the re-attendance [of the inventors] will only [14] serve to provide historical context”, the Appellants point to the other purposes of inventor discovery and say that there is no requirement that the examining party demonstrate, a priori, “any necessity in examining the assignor or specifically set out what the assignor’s examination will add to the litigation” (paragraph 39 of the Appellants’ memorandum). According to the Appellants, since there is no limitation to the right of examination of an assignor, the burden of establishing that the examination is “oppressive, vexatious or unnecessary” falls on the person being examined, i.e. in this case the Respondents. In the Appellants’ view, the Prothonotary wrongly shifted the burden in that she required the Appellants to justify the necessity of their examination of the inventors.

The Appellants contend that “[t]he ‘elbow room’ of case management does not confer on [15] a prothonotary the ability to disregard the Rules” (paragraph 46 of the Appellants’ memorandum). Indeed, the deference that ought to be afforded in such a case is not without limits. The Appellants are of the view that the decision relied on by the Motions Judge, namely

–  –  –

distinguishable from the case before us because of factual differences. The Appellants argue that had the Motions Judge performed the same review of the merits of the Prothonotary’s order as the Court did in Sawridge, he would have concluded that the Prothonotary’s order was clearly wrong.

The Appellants further submit that “a case management prothonotary cannot prioritize [16] expedience over a right conferred by the Rules” (paragraph 59 of the Appellants’ memorandum), and say that this is what the Prothonotary did by limiting the duration and manner of the discovery sought by them without a determination that the examination was abusive or otherwise improper. The Prothonotary erred, say the Appellants, by permitting the Respondents to arbitrarily end their examination of the inventors and thus the Motions Judge ought to have intervened.

[17] Turning to the manner in which examinations for discovery ought to be conducted, the Appellants insist that the default rule is that examinations are done in person, and that an order that examinations be conducted by video-conference is an exceptional remedy that must be justified by the party seeking it. The Appellants contend that the Prothonotary also prejudged the relevance of questions that had yet to be asked by limiting the examinations of the inventors to one half day each.

[18] The Appellants further say that the Prothonotary misapprehended the facts of the case,

–  –  –

unable to attend in person for one day each. In addition, the issues for discovery were too vast, in the Appellant’s opinion, to be covered in the timeframe ordered by the Prothonotary.

Respondents’ Submissions B.

–  –  –

[19] The Respondents invite this Court to reconsider the standard of review applicable to discretionary orders made by prothonotaries. They say that such orders should be reviewed according to the Housen standard rather than the prevailing Aqua-Gem/Pompey standard which, in their view, is manifestly wrong and should be abandoned.

The Respondents argue that the de novo review of prothonotaries’ decisions that are vital [20] to the final outcome of the case is irreconcilable with the presumption of fitness and that there is “no compelling reason for adopting differing standards of review on appeal depending solely on the place in the judicial hierarchy occupied by the first-instance decision maker” (paragraphs 33 and 34 of the Respondents’ memorandum.) [21] The Respondents also point out that, in Pompey, the Supreme Court merely reiterated the standard enunciated by this Court in Aqua-Gem without further explanation. According to the Respondents, Housen is the Supreme Court’s definitive word on the standard of review and is binding on this Court.

[22] Moreover, the Respondents assert that the Aqua-Gem/Pompey standard is fraught with

–  –  –

requires a case-by-case assessment. Conversely, the Respondents say that the Housen standard is easy to apply. Finally, the Respondents say that decisions made by prothonotaries with respect to the merits of actions of less than $50,000 are already reviewed on the Housen standard. In any event, the Respondents say that, other than in respect of the de novo review for vital issues, the Aqua-Gem/Pompey and the Housen standards are, in effect, the same.

–  –  –

[23] With respect to the merits of the appeal, the Respondents say that the Appellants are simply re-arguing in this appeal what they have already argued before the Prothonotary and the Motions Judge. As the issue before us is not one that is vital to the outcome of the case, the Respondents say that the Appellants are in error when they argue that the Motions Judge should have substituted his discretion for that of the Prothonotary.

Relying on Rule 3, the Respondents say that discovery “is not a never ending process” [24] and that it should be proportionate. The Respondents further say that the Federal Court properly managed its process according to this principle. In addition, the Respondents assert that a case management judge has the power to make any order that is necessary for the just determination of the proceedings, including by dispensing compliance with a Rule. By granting the Prothonotary some “elbow room”, the Motions Judge deferred to her factually-based decision in accordance with Sawridge.

[25] The Respondents also say that the purposes of examining an inventor for discovery are

–  –  –

does not cause prejudice to the Appellants. Finally, the Respondents emphasize that, absent the issuance of letters rogatory, they do not have the power to compel the two inventors to re-attend because they are residents of the United Kingdom. In this context, they submit that it was appropriate for the Prothonotary to order that they should be examined by way of teleconference.

VI. Analysis A. Should This Court Reconsider The Standard Of Review Of Discretionary Decisions Made By Prothonotaries?

[26] At the outset, I must say that as the order made by the Prothonotary that gives rise to the present appeal is not one that is vital to the final outcome of the case, a determination of whether or not the standard of review should be revisited is in no way determinative of this case. As the Respondents have argued, there does not appear to be, other than in respect of the de novo review when the issue is vital, any substantial difference between the Aqua-Gem/Pompey standard and the Housen standard. Both standards, in my respectful opinion, simply formulate the same principles through the use of different language.



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