Apotex Inc. v. Bayer Inc.

Apotex Inc. v. Bayer Inc.
Court (s) Database
Federal Court of Appeal Decisions
Date
2020-05-14
Neutral citation
2020 FCA 86
File numbers
A-388-19, A-389-19
Notes
Reported Decision
Decision Content
Date: 20200514
Dockets: A-388-19
A-389-19
Citation: 2020 FCA 86
CORAM:
NADON J.A.
PELLETIER J.A.
DE MONTIGNY J.A.
Docket: A-388-19
BETWEEN:
APOTEX INC.
Appellant
and
BAYER INC. AND BAYER INTELLECTUAL PROPERTY GMBH
and TEVA CANADA LIMITED
and TARO PHARMACEUTICALS INC.
and SANDOZ CANADA INC.
Respondents
Docket: A-389-19
AND BETWEEN:
TEVA CANADA LIMITED
Appellant
and
BAYER INC. AND BAYER INTELLECTUAL PROPERTY GMBH
and APOTEX INC.
and TARO PHARMACEUTICALS INC.
and SANDOZ CANADA INC.
Respondents
Heard at Toronto, Ontario, on January 13, 2020.
Judgment delivered at Ottawa, Ontario, on May 14, 2020.
REASONS FOR JUDGMENT BY:
NADON J.A.
CONCURRED IN BY:
PELLETIER J.A.
DE MONTIGNY J.A.
Date: 20200514
Dockets: A-388-19
A-389-19
Citation: 2020 FCA 86
CORAM:
NADON J.A.
PELLETIER J.A.
DE MONTIGNY J.A.
Docket: A-388-19
BETWEEN:
APOTEX INC.
Appellant
and
BAYER INC. AND BAYER INTELLECTUAL PROPERTY GMBH
and TEVA CANADA LIMITED
and TARO PHARMACEUTICALS INC.
and SANDOZ CANADA INC.
Respondents
Docket: A-389-19
AND BETWEEN:
TEVA CANADA LIMITED
Appellant
and
BAYER INC. AND BAYER INTELLECTUAL PROPERTY GMBH
and APOTEX INC.
and TARO PHARMACEUTICALS INC.
and SANDOZ CANADA INC.
Respondents
REASONS FOR JUDGMENT
NADON J.A.
I. Introduction and Procedural History
[1] Before us are two appeals of a decision (the Order) of Pentney J. (the Judge) of the Federal Court (2019 FC 1039), dated August 1, 2019, wherein he ordered that the trial of common issues in Bayer Inc. et al. v. Taro Pharmaceuticals Inc. (T-435-19) and Bayer Inc. et al. v. Sandoz Canada Inc. (T-806-19) was to be heard together with the trial of common issues set for Bayer Inc. et al. v. Teva Canada Limited (T-1960-18) and Bayer Inc. et al. v. Apotex Inc. (T-2093-18).
[2] It should be pointed out that by order dated February 14, 2019 (2019 FC 191), Prothonotary Tabib (the Prothonotary) had ordered that the trial in file T-1960-18 (Bayer Inc. et al. v. Teva Canada Limited) was to be heard concurrently with the trial in file T-2093-18 (Bayer Inc. et al. v. Apotex Inc.) in respect of all common invalidity issues and that, in respect of all other issues, the trials would proceed separately. I will hereinafter refer to the Prothonotary’s Order as Bayer No. 1.
[3] The respondents Bayer Inc. and Bayer Intellectual Property GMBH (Bayer) market and sell in Canada the drug product XARELTO®, an anticoagulant that contains the active medicinal ingredient rivaroxaban, and has listed Canadian Patents Nos. 2,547,113 (the ՙ113 Patent); 2,624,310 (the ՙ310 Patent); 2,823,159 (the ՙ159 Patent); and 2,396,561 (the ՙ561 Patent) on the Patent Register in connection with XARELTO® 10, 15 and 20 mg strengths.
[4] The four actions commenced by Bayer against the appellants Teva Canada Limited (Teva) and Apotex Inc. (Apotex), and against the respondents Taro Pharmaceuticals Inc. (Taro) and Sandoz Canada Inc. (Sandoz), stem from the service upon Bayer of Notices of Allegation (NOA) by the four pharmaceutical generics pursuant to the Patented Medicines (Notice of Compliance) Regulations, S.O.R./93-133, as amended on September 21, 2017 (the Regulations). More particularly, by their NOAs, the generics say, inter alia, that the patents at issue, other than the ՙ561 Patent which they do not challenge and which expires on December 11, 2020, are invalid.
[5] I also note that on November 12, 2019, in Bayer Inc. v. Dr. Reddy’s Laboratories Ltd., 2019 FC 1408 [Dr. Reddy’s], the Prothonotary dismissed a motion brought by another pharmaceutical generic for an order directing that the trial of its action, in regard to the issue of invalidity, be added to the trial of issues common to the four aforementioned actions.
[6] The appellants Teva and Apotex submit that the Judge erred in making the impugned Order joining their actions with the actions of the respondents on common issues and that, as a result, we should intervene. In support of their submission, the appellants make a number of arguments.
[7] The appellants argue that the Court failed to consider the application of Rule 105 of the Federal Court Rules S.O.R./98-106 (the Rules) and, as a result, the Court also failed to consider prejudice as a factor in its decision. Rule 105 provides that the Court may, in its discretion, order that two or more proceedings be “consolidated, heard together, or heard one immediately after the other”. Rule 105, according to the appellants, properly grants to the Federal Court the power that the Judge exercised in his Order, that is, the power to determine how two or more proceedings pending before it are to be pursued or heard in relation to one another. The appellants argue the Judge erred by failing to make any reference to Rule 105 and basing his Order instead on the Court’s inherent jurisdiction to control its proceedings and on Rule 3, which states that the Rules are to be interpreted and applied “so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits.”
[8] The appellants say that, by failing to consider Rule 105, the Judge also erred in his approach to the issue of prejudice that could arise from the Order. Prejudice, according to the appellants, is the most important factor for the Court to consider in determining whether it should exercise the powers set out in Rule 105. The appellants argue that while the onus of showing that the Order would not be prejudicial to them should have been on the respondents, the Judge inappropriately reversed the burden of proof by requiring that the appellants themselves demonstrate that they would be prejudiced by the Order.
[9] With regard to the prejudice that would, in their view, result from the Order, the appellants’ arguments are as follows. They say that they were poised to become the first movers in the generic rivaroxaban market because they were the first to serve their NOAs relating to their respective rivaroxaban products.
[10] The appellants say that Taro and Sandoz, on the other hand, were on track to become late entrants in the generic rivaroxaban market because they delayed the service of their respective NOAs for a considerable length of time after the appellants had served theirs. By reason of the tardiness of their NOAs, Bayer’s actions against Taro and Sandoz were only commenced in March and May 2019, respectively—months after Bayer commenced actions against the appellants Teva and Apotex in November and December 2018, respectively.
[11] The appellants further say that because of the 24-month stay imposed by the Regulations, their actions must be determined by the Federal Court by November 9 and December 7, 2020, respectively. The Taro and Sandoz actions, on the other hand, need not be determined until the spring of 2021.
[12] The parties have provided us with a table (Apotex’s memorandum of fact and law at para. 30; Teva’s memorandum of fact and law at para. 15), summarizing the relevant dates of the four proceedings:
Defendant
NOA Served
Statement of Claim
24 months
Teva
Sept. 28, 2018
Nov. 9, 2018
Nov. 9, 2020
Apotex
Oct. 23, 2018
Dec. 7, 2018
Dec. 7, 2020
CA 561 Patent Expiry Dec. 11, 2020
Taro
Jan. 23, 2019
Mar. 8, 2019
Mar. 8, 2021
Sandoz
Apr. 2, 2019
May 17, 2019
May 17, 2021
[13] Thus, the appellants say that if they are successful, they will enter the market on December 11, 2020, upon the expiry of the ՙ561 Patent which, as I indicated earlier, none of the parties have challenged.
[14] According to the appellants, as matters stood prior to the Order, in the event their defences to Bayer’s actions against them were successful, they would have shared the “first-mover advantage” in the rivaroxaban market. The appellants argue that the effect of the Judge’s Order is that they will lose their first-mover advantage and that Taro and Sandoz “will be able to jump the queue and enter the rivaroxaban market simultaneously with the first movers, Apotex and Teva (if successful).” (Apotex’s memorandum of fact and law at para. 5).
[15] The appellants go on to say that the first-mover advantage is a significant and substantial advantage in the context of the generic pharmaceutical market and that its loss constitutes an irreparable harm, adding that if generics are denied this advantage, there will be no incentive to pursue timely market entry.
[16] On that basis, the appellants criticize the Judge for dismissing out of hand the prejudice they say they will suffer. The Judge’s focus was fixed, wrongly in the appellants’ view, on whether procedural efficiencies would be gained from a common trial on invalidity. The appellants say that, had the Judge properly considered the issue of prejudice, he must have concluded that Taro, Sandoz and Bayer failed to establish that the appellants would not be prejudiced by a joint hearing or that the respondents would be prejudiced by separate hearings.
[17] The appellants also point out that another effect of the Judge’s Order is to add complexity and expenses to their proceedings and that additional delay will likely occur because of the involvement of two additional parties.
[18] Finally, the appellants contend that the Judge erred in failing to consider sections 6.02, 6.08 and 6.09 of the Regulations.
II. The Federal Court Decision
[19] After setting out the background of the issue before him, the Judge turned to the appellants’ arguments and in particular to their argument concerning prejudice, which he summarized at paragraphs 7 to 10 of his Reasons:
[7] In this case, however, Teva and Apotex argue that they will be prejudiced in several ways if Taro and Sandoz are added as defendants to the hearing of common issues. First, as noted earlier, they submit that Taro and Sandoz did not align the service of their NOAs on Bayer with the expiry of the 561 Patent, and thus they have ceded a potential commercial advantage. Adding Taro and Sandoz now as defendants to the common hearing would allow them, in effect, to “leapfrog” the expected sequence of events within the 24-month timeline fixed by the Regulations, and thereby re-gain the commercial advantage they have lost.
[8] In addition, Teva and Apotex note that the initial schedules for their actions were fixed by the Case Management Judge before the statements of claim were even issued in the Taro and Sandoz matters. The four actions, therefore, are at very different points in the schedule, which must work within the very tight timelines set by the Regulations. They argue that adding the two latecomers now will inevitably add complexity, cost, and delay to the trial preparation currently underway, as well to the actual the [sic] trial of common issues.
[9] Teva and Apotex contend that they have worked to collaborate on preparation for the trial of common issues, and to align their pleadings. This involves a certain added time and expense to their efforts, but it may also lead to some savings for each of them, or at the least the possible sharing of costs associated with trial preparation and the trial itself. Tentative dates have already been set for the hearing, and trial preparations are well underway.
[10] Teva and Apotex further submit that any additional costs to Bayer associated with not adding Taro and Sandoz to the trial of common issues is simply the result of the decision taken by Bayer to launch these actions against all four defendants, and are a natural consequence of the scheme set out in the Regulations.
[20] The Judge then set out, at paragraphs 11 to 18 of his Reasons, the arguments of Taro, Sandoz and Bayer for why he should order the four actions heard together on common issues.
[21] Beginning at paragraph 21 of his Reasons, the Judge gave his own explanation for why the Order should be made. First, he relied on Rule 3 of the Rules. The Judge stated that the principles set out in Rule 3 render two considerations particularly relevant in the context of the Regulations: first, the 24-month deadline within which matters must be determined, and, second, the balance of interests as between innovators and generics, their respective commercial interests and the public interest, as reflected in the Regulations.
[22] The Judge then specifically addressed the appellants’ first-mover argument. He rejected the appellants’ submission that the Court should be guided by the Regulations to protect any sort of first-mover advantage. In so concluding, the Judge adopted the reasons of the prothonotary in Biogen Canada Inc. v. Taro Pharmaceutical Inc. 2018 FC 1034 [Biogen], namely, that there is no guarantee that any party’s action will proceed before that of any other, and the Court is not bound to deal with cases in any sequence dependant upon which actions were first in time. In the Judge’s view, the primary consideration in the action before him was “the interests of justice for all of the parties in the particular circumstances of these cases.” (Reasons at para. 24).
[23] The Judge then went on to consider what he believed to be the circumstances relevant to the determination he had to make. First, he made it clear that there were persuasive arguments on both sides of the question. He highlighted the fact that the appellants and Bayer had been proceeding diligently so as to abide by the schedule already set by the Prothonotary and that this had required considerable efforts on their part.
[24] In making these comments, the Judge recognized that adding Taro and Sandoz to the appellants’ proceedings would necessarily add complexity to the preparation and conduct of the trial of common issues. The Judge added that the respondents had no absolute right to participate in the appellants’ trial and that they would not be prejudiced if their common issues were not heard with those of the appellants. The Judge recognized that Taro and Sandoz could actually benefit from “going second” rather than being included in the appellants’ trial.
[25] However, the Judge then made the point that Taro and Sandoz had caught up to the appellants’ trial preparations and thus no delay was likely to result from adding them to the appellants’ proceedings. He also made the point that hearing the four cases together on the common issues would result in savings of time and expenses to Bayer and to the Court “by avoiding two or possibly three trials on issues which are common to all of the proceedings…” (Reasons at para. 26).
[26] The Judge did not agree with Bayer’s argument that if Taro and Sandoz were not added to the trial on common issues, Bayer would be prejudiced by having to deal with “duplication and potential overlap in trial preparations for separate hearings on similar legal and factual questions, occurring in roughly the same time frame.” (Reasons at para. 28). The Judge stated that, having made the decision to launch four separate actions, Bayer could not claim undue prejudice for having to manage a number of separate proceedings during the same time frame.
[27] On the basis of these considerations, the Judge concluded that the interests of justice required that the Taro and Sandoz trials be heard together with the appellants’ on the common issues. Notwithstanding that greater efforts would be required by the parties to bring the matter to fruition, it was clear to the Judge that the Taro and Sandoz proceedings were in a position to proceed in accordance with the schedule established by the Prothonotary for the appellants’ proceedings. The Judge was also satisfied that it was in the interests of justice that the evidence in respect of the four actions be heard prior to the determination of the common issues of validity and claim construction. In the Judge’s view, the most effective and efficient way of avoiding different rulings on these issues was to add Taro and Sandoz as defendants in the trial of common issues.
III. Legislation
[28] The following provisions of the Rules and of the Regulations are relevant to the determination of this appeal.
Federal Courts Rules, S.O.R./98-106
Règles des Cours fédérales, D.O.R.S./98-106
General principle
Principe général
3 These Rules shall be interpreted and applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits.
3 Les présentes règles sont interprétées et appliquées de façon à permettre d’apporter une solution au litige qui soit juste et la plus expéditive et économique possible.
…
[…]
Varying Rules and Dispensing with Compliance
Modification de règles et exemption d’application
55 In special circumstances, in a proceeding, the Court may vary a rule or dispense with compliance with a rule.
55 Dans des circonstances spéciales, la Cour peut, dans une instance, modifier une règle ou exempter une partie ou une personne de son application.
…
[…]
Consolidation of proceedings
Réunion d’instances
105 The Court may order, in respect of two or more proceedings,
105 La Cour peut ordonner, à l’égard de deux ou plusieurs instances :
(a) that they be consolidated, heard together or heard one immediately after the other;
a) qu’elles soient réunies, instruites conjointement ou instruites successivement;
(b) that one proceeding be stayed until another proceeding is determined; or
b) qu’il soit sursis à une instance jusqu’à ce qu’une décision soit rendue à l’égard d’une autre instance;
(c) that one of the proceedings be asserted as a counterclaim or cross-appeal in another proceeding.
c) que l’une d’elles fasse l’objet d’une demande reconventionnelle ou d’un appel incident dans une autre instance.
…
[…]
Consolidation of appeals
Jonction d’appels
342(1) Unless the Court orders otherwise, where more than one party appeals from an order, all appeals shall be consolidated.
342(1) Sauf ordonnance contraire de la Cour, lorsque plus d’une partie a interjeté appel d’une même ordonnance, tous les appels sont joints.
…
[…]
Powers of case management judge or prothonotary
Pouvoirs du juge ou du protonotaire responsable de la gestion de l’instance
385(1) Unless the Court directs otherwise, a case management judge or a prothonotary assigned under paragraph 383(c) shall deal with all matters that arise prior to the trial or hearing of a specially managed proceeding and may
385(1) Sauf directives contraires de la Cour, le juge responsable de la gestion de l’instance ou le protonotaire visé à l’alinéa 383c) tranche toutes les questions qui sont soulevées avant l’instruction de l’instance à gestion spéciale et peut :
(a) give any directions or make any orders that are necessary for the just, most expeditious and least expensive determination of the proceeding on its merits;
a) donner toute directive ou rendre toute ordonnance nécessaires pour permettre d’apporter une solution au litige qui soit juste et la plus expéditive et économique possible;
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[…]
(d) subject to subsection 50(1), hear and determine all motions arising prior to the assignment of a hearing date.
d) sous réserve du paragraphe 50(1), entendre les requêtes présentées avant que la date d’instruction soit fixée et statuer sur celles-ci.
Patented Medicines (Notice of Compliance) Regulations, S.O.R./93-133
Règlement sur les médicaments brevetés, (avis de conformité) D.O.R.S./93-133
Right of Action
Droits d’action
6(1) The first person or an owner of a patent who receives a notice of allegation referred to in paragraph 5(3)(a) may, within 45 days after the day on which the first person is served with the notice, bring an action against the second person in the Federal Court for a declaration that the making, constructing, using or selling of a drug in accordance with the submission or supplement referred to in subsection 5(1) or (2) would infringe any patent or certificate of supplementary protection that is the subject of an allegation set out in that notice.
6(1) La première personne ou le propriétaire d’un brevet qui reçoit un avis d’allégation en application de l’alinéa 5(3)a) peut, au plus tard quarante-cinq jours après la date à laquelle la première personne a reçu signification de l’avis, intenter une action contre la seconde personne devant la Cour fédérale afin d’obtenir une déclaration portant que la fabrication, la construction, l’exploitation ou la vente d’une drogue, conformément à la présentation ou au supplément visé aux paragraphes 5(1) ou (2), contreferait tout brevet ou tout certificat de protection supplémentaire visé par une allégation faite dans cet avis.
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[…]
6(3) The second person may bring a counterclaim for a declaration
6(3) La seconde personne peut faire une demande reconventionnelle afin d’obtenir une déclaration :
(a) under subsection 60(1) or (2) of the Patent Act in respect of any patent claim asserted in the action brought under subsection (1); or
a) soit au titre des paragraphes 60(1) ou (2) de la Loi sur les brevets à l’égard de toute revendication se rapportant à un brevet faite dans le cadre de l’action intentée en vertu du paragraphe (1);
(b) under 125(1) or (2) of that Act in respect of any claim, asserted in the action brought under subsection (1), in the patent set out in the certificate of supplementary protection in question in that action.
b) soit au titre des paragraphes 125(1) ou (2) de la même loi, à l’égard de toute revendication, faite dans le cadre de l’action intentée en vertu du paragraphe (1), se rapportant au brevet mentionné dans le certificat de protection supplémentaire en cause dans cette action.
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[…]
6.02 No action may be joined to a given action brought under subsection 6(1) during any period during which the Minister shall not issue a notice of compliance because of paragraph 7(1)(d) other than
6.02 Aucune action ne peut être réunie à une action donnée intentée en vertu du paragraphe 6(1) durant la période pendant laquelle le ministre ne peut délivrer d’avis de conformité en raison de l’alinéa 7(1)d), sauf :
(a) another action brought under that subsection in relation to the submission or supplement in that given action; and
a) une autre action intentée en vertu de ce paragraphe relativement à la présentation ou au supplément visé dans cette action donnée;
(b) an action brought in relation to a certificate of supplementary protection that is added to the register after the filing of the submission or supplement in that given action, if the patent that is set out in that certificate of supplementary protection is at issue in that given action.
b) toute action relative à un certificat de protection supplémentaire ajouté au registre après le dépôt de la présentation ou du supplément visé dans cette action donnée, si le brevet mentionné dans ce certificat de protection supplémentaire est en cause dans cette action donnée.
…
[…]
6.08 An action brought under subsection 6(1) may, on the motion of a second person, be dismissed, in whole or in part, on the ground that it is redundant, scandalous, frivolous or vexatious or is otherwise an abuse of process in respect of one or more patents or certificates of supplementary protection.
6.08 Toute action intentée en vertu du paragraphe 6(1) peut, sur requête de la seconde personne, être rejetée en tout ou en partie au motif qu’elle est inutile, scandaleuse, frivole ou vexatoire ou qu’elle constitue par ailleurs un abus de procédure à l’égard d’un ou de plusieurs brevets ou certificats de protection supplémentaire.
6.09 Every first person, second person and owner of a patent shall act diligently in carrying out their obligations under these Regulations and shall reasonably cooperate in expediting any action brought under subsection 6(1) or a counterclaim brought under subsection 6(3) to which they are a party.
6.09 Les premières personnes, secondes personnes et propriétaires de brevets sont tenus d’agir avec diligence en remplissant les obligations qui leur incombent au titre du présent règlement et, s’ils sont parties à une action intentée en vertu du paragraphe 6(1) ou à une demande reconventionnelle faite en vertu du paragraphe 6(3), de collaborer de façon raisonnable au règlement expéditif de celle-ci.
6.1(1) An action brought under subsection 6(1) shall be a specially managed proceeding in accordance with the Federal Courts Rules.
6.1(1) Toute action intentée en vertu du paragraphe 6(1) est gérée à titre d’instance à gestion spéciale conformément aux Règles des Cours fédérales.
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[…]
Notice of Compliance
Avis de conformité
7(1) The Minister shall not issue a notice of compliance to a second person before the latest of
7(1) Le ministre ne peut délivrer d’avis de conformité à la seconde personne avant le dernier en date des jours suivants :
…
[…]
(d) the day after the expiry of the 24-month period that begins on the day on which an action is brought under subsection 6(1);
d) le lendemain du dernier jour de la période de vingt-quatre mois qui commence à la date à laquelle une action a été intentée en vertu du paragraphe 6(1);
…
[…]
7(8) As long as the Federal Court has not made a declaration referred to in subsection 6(1), it may shorten or extend the 24-month period referred to in paragraph (1)(d) if it finds that a party has not acted diligently in carrying out their obligations under these Regulations or has not reasonably cooperated in expediting the action.
7(8) Lorsque la Cour fédérale n’a pas encore fait la déclaration visée au paragraphe 6(1), elle peut abréger ou prolonger la période de vingt-quatre mois visée à l’alinéa (1)d) si elle conclut qu’une partie n’a pas agi avec diligence en remplissant les obligations qui lui incombent au titre du présent règlement ou qu’elle n’a pas collaboré de façon raisonnable au règlement expéditif de l’action.
8(1) A second person may apply to the Federal Court or another superior court of competent jurisdiction for an order requiring all plaintiffs in an action brought under subsection 6(1) to compensate the second person for the loss referred to in subsection (2).
8(1) La seconde personne peut demander à la Cour fédérale ou à toute autre cour supérieure compétente de rendre une ordonnance enjoignant à tous les plaignants dans l’action intentée en vertu du paragraphe 6(1) de lui verser une indemnité pour la perte visée au paragraphe (2).
8(2) Subject to subsection (3), if an action brought under subsection 6(1) is discontinued or dismissed or if a declaration referred to in subsection 6(1) is reversed on appeal, all plaintiffs in the action are jointly and severally, or solidarily, liable to the second person for any loss suffered after the later of the day on which the notice of allegation was served, the service of which allowed that action to be brought, and of the day, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations.
8(2) Sous réserve du paragraphe (3), si l’action intentée en vertu du paragraphe 6(1) fait l’objet d’un désistement ou est rejetée, ou si la déclaration visée au paragraphe 6(1) est renversée lors d’un appel, tous les plaignants sont responsables solidairement envers la seconde personne de toute perte subie après la date de signification de l’avis d’allégation, laquelle signification a permis que cette action soit intentée ou, si elle est postérieure, la date, attestée par le ministre, à laquelle un avis de conformité aurait été délivré n’eût été le présent règlement.
…
[…]
8(5) If the Federal Court or the other superior court orders a second person to be compensated for a loss referred to in subsection (2), the court may, in respect of that loss, make any order for relief by way of damages that the circumstances require.
8(5) Lorsque la Cour fédérale ou l’autre cour supérieure ordonne que la seconde personne soit indemnisée pour la perte visée au paragraphe (2), elle peut rendre toute ordonnance qu’elle juge indiquée pour accorder réparation par recouvrement de dommages-intérêts à l’égard de cette perte.
8(6) In assessing the amount of compensation — including any apportionment of that amount between the plaintiffs who are liable under subsection (2) — the court shall take into account all matters that it considers relevant to the assessment of the amount or the apportionment, including any conduct of the parties that contributed to delay the disposition of the action.
8(6) Pour déterminer le montant de l’indemnité à accorder — y compris la répartition de ce montant entre les plaignants qui sont responsables en vertu du paragraphe (2) —, la Cour fédérale ou l’autre cour supérieure tient compte des facteurs qu’elle juge pertinents à cette fin, y compris, le cas échéant, la conduite de toute partie qui a contribué à retarder le règlement de l’action.
IV. Issues
[29] The only issue in these appeals is whether the Judge made a reviewable error in making the impugned Order.
V. Analysis
A. Standard of Review
[30] I agree with the parties that the standards of review enunciated by the Supreme Court of Canada at paragraphs 26 to 28 of Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 [Housen] are the standards applicable in the present matter. This Court, at paragraphs 66 to 79 of Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215, [2017] 1 F.C.R. 331, confirmed that any discretionary decision of a prothonotary or a judge of the Federal Court, as is the case here, is to be reviewed on the Housen standards.
[31] Consequently, questions of fact and mixed questions of law and fact are subject to the palpable and overriding error standard while questions of law and mixed questions, where there is an extricable principle of law, are subject to the correctness standard.
B. The Rule 105 issue and prejudice
[32] As I indicated earlier, the appellants criticize the Judge for having failed to consider Rule 105, for having reversed the burden of proof applicable under that Rule and for having summarily dismissed their argument regarding prejudice.
[33] I begin my discussion of this issue by saying that it does not appear that Taro, Sandoz or Bayer made a motion under Rule 105 requesting that their actions be heard together with those of the appellants on common issues. Rather, it appears that, during the course of the case management of the four actions, the Judge—who, in addition to being a Case Management Judge for the actions alongside the Prothonotary, was also the judge designated to hear the actions—directed by way of a letter dated June 20, 2019 that the appellants provide him, by the end of the business day on Friday June 21, 2019, with their position on the “possible involvement of Taro and Sandoz as parties in the hearing of common issues previously ordered in regard to Apotex and Teva”.
[34] In response to the Judge’s directive, the appellants submitted, on June 21, 2019, a brief response, reserving their right to elaborate more fully or to add to their submissions at the Case Management Conference scheduled for June 24, 2019.
[35] On June 24, 2019, prior to the Case Management Conference, Taro filed a brief response to the appellants’ submission of June 21, 2019.
[36] The Case Management Conference was held on June 24, 2019, during which the issue of the joint hearing of the four actions on common issues was debated by the parties. The result of this debate is the Judge’s Order of August 1, 2019, the subject of these appeals.
[37] I turn now to review the legislative context within which the Judge made the Order under review. Rule 105 gives the Court the power to consolidate two or more proceedings or to order that the proceedings be heard together or one immediately after the other.
[38] Subsection 6.1(1) of the Regulations states that any action brought under subsection 6(1) thereof is a specially managed proceeding in accordance with the Rules. Thus, Rule 385, which sets out the powers of a Case Management Judge or Prothonotary, was applicable to each of Bayer’s actions. Rules 385(1)(a) and (d), which I reproduce once again for the sake of convenience, provide as follows:
Powers of case management judge or prothonotary
Pouvoirs du juge ou du protonotaire responsable de la gestion de l’instance
385(1) Unless the Court directs otherwise, a case management judge or a prothonotary assigned under paragraph 383(c) shall deal with all matters that arise prior to the trial or hearing of a specially managed proceeding and may
385(1) Sauf directives contraires de la Cour, le juge responsable de la gestion de l’instance ou le protonotaire visé à l’alinéa 383c) tranche toutes les questions qui sont soulevées avant l’instruction de l’instance à gestion spéciale et peut :
(a) give any directions or make any orders that are necessary for the just, most expeditious and least expensive determination of the proceeding on its merits;
a) donner toute directive ou rendre toute ordonnance nécessaires pour permettre d’apporter une solution au litige qui soit juste et la plus expéditive et économique possible;
…
[…]
(d) subject to subsection 50(1), hear and determine all motions arising prior to the assignment of a hearing date.
d) sous réserve du paragraphe 50(1), entendre les requêtes présentées avant que la date d’instruction soit fixée et statuer sur celles-ci.
[39] The wording of Rule 385(1)(a) is similar to that of Rule 3, on which the Judge relied for his Order. Both Rules provide that the Court must ensure that its orders and directions lead not only to a just outcome, but to the most expeditious and least expensive determination of the proceedings on their merits.
[40] The Regulations thus provide for the case management of any action commenced under subsection 6(1), and the Rules provide the case management judge or prothonotary with discretion to make any order for the just, most expeditious and least expensive determination of proceedings. However, the question remains how exactly the powers granted to a Case Management Judge under Rule 385(1) are to be exercised. In considering the exercise of his or her powers, a Case Management Judge must remain cognizant of Rule 55, which provides that, only in special circumstances may the Court “vary a rule or dispense with compliance with a rule”. In my view, there are no special circumstances in the present matter that would allow the Court to vary or dispense with compliance of any rule and, in particular, Rule 105. More particularly, the 24-month stay provided for at paragraph 7(1)(d) of the Regulations does not constitute a special circumstance.
[41] However, although I agree with the appellants that the Judge did not refer to Rule 105 in making his determination, I am satisfied that nothing turns on this omission. Neither, in my view, does anything turn on the Judge’s reliance on Rule 3 and the Court’s inherent jurisdiction to control its proceedings. The fact is that Rule 105 gave the Judge the discretion to make the Order that he made and, in making that Order, there can be no doubt that the Judge was right to consider both Rule 3 and the powers given to him under Rule 385(1). The question we must decide is whether, in making the Order that he did, the Judge erred in his exercise of the discretion afforded to him under Rule 105.
[42] As the foregoing makes clear, I am satisfied that Rule 105, although not referred to by the Judge in his Reasons, was relevant and applicable. I am also satisfied that no special circumstances existed that would have permitted the Judge to dispense with compliance with Rule 105. Consequently, whatever rights the parties had under Rule 105 could not be dispensed with by the Judge even in the context of case management. In support of this view, I rely on this Court’s decision in Apotex Inc. v. Merck & Co., 2003 FCA 438, 312 N.R. 273, where the Court dealt with an order of a prothonotary made pursuant to Rules 3 and 385(1)(a) which was subsequently confirmed by a judge of the Federal Court. By his order, the prothonotary dismissed the appellant’s motion to compel answers on discovery with respect to questions that the respondent had refused to answer during examination for discovery. In finding that the judge and prothonotary had erred in concluding as they did, this Court, per paragraph 13 of the reasons of Strayer J.A., explained its understanding of Rule 3 and Rule 385:
In my view, however, in the present case there has been an error of principle which has fettered the exercise of discretion by the prothonotary, and his decision has been confirmed by the motions judge. I do not understand Rule 385 to authorize a case management judge or prothonotary, in giving directions that are necessary for the "just, most expeditious and least expensive determination of the proceeding on its merits" to enable them to deny a party the legal right to have questions answered on examination for discovery which are relevant to the issues in the pleadings. That right is not merely "theoretical" (as the prothonotary put it) but is clearly spelled out in Rule 240 and I do not take the general words of Rule 385(1)(a) or of Rule 3 to be sufficient to override that specific right. I would also observe that the word "just" which appears in both these rules relied on by the respondents and the decision-makers below confirms that justice is not to be subordinated to expedition. A person who is a party to a civil action is entitled to ask any question on discovery that is relevant to the issue: that is a matter of justice to him, subject of course to the discretionary power of the prothonotary or a judge to disallow the question where it is abusive for one of the reasons mentioned above. No such findings have been made in this case.
[My emphasis].
[43] Thus, this Court found that, as justice was not to be subordinated to expedition, the appellant was entitled to obtain answers to questions that were relevant to the issues raised by the pleadings, and the prothonotary had erred by invoking Rules 3 and 385 to dismiss the appellant’s motion. Similarly, in the present matter, the Judge could not rely on Rules 3 and 385 to abrogate any rights the appellants were entitled to under Rule 105.
[44] With this in mind, I turn now to a brief review of the jurisprudence pertaining to Rule 105 to assist in determining whether the Judge erred in exercising his discretion under that Rule.
[45] The jurisprudence makes clear that the purpose of an order under Rule 105 is “the avoidance of a multiplicity of proceedings and the promotion of expeditious and inexpensive determination of those proceedings” (Global Restaurant Operations of Ireland Ltd. v. Boston Pizza Royalties Ltd. Partnership, 2005 FC 317, 38 C.P.R. (4th) 551, at para. 11 [Global Restaurant]; John E. Canning Ltd. v. Tripap Inc., [1999] 167 F.T.R. 93, 1999 CanLII 8029, at para. 27 (FCTD) [John E. Canning].
[46] In determining whether an order sought under Rule 105 should be made, the Court must consider a number of factors, namely, the commonality of parties, issues, facts and remedies. The Court must also consider whether prejudice will result from the making of the order (Sanofi–Aventis Canada Inc. v. Novopharm Limited, 2009 FC 1285, 356 F.T.R. 235, at para. 9). In a number of decisions, the Federal Court has held that no order of consolidation should be made where prejudice would result from the order. It is also well established that the onus rests with the moving party to show that it would not be abusive or prejudicial to make the order sought (Global Restaurant; Ely Lilly and Company. v. Apotex Inc., 48 A.C.W.S. (3d) 31, [1994] 55 C.P.R. (3d) 429, at para. 6 (WL Can) (F.C.); Apotex v. Wellcome Foundation Limited (1993), 69 F.T.R. 178, 51 C.P.R. (3d) 480, at para. 15 (WL Can) (F.C.) [Wellcome]; Mon-Oil Limited v. Canada (1989), 26 C.P.R. (3d) 379, 27 F.T.R. 50, at para. 4 (WL Can) (F.C.)). Thus, it is clear that, while prejudice is not the only consideration relevant to a determination under Rule 105, it carries great weight. To this, I would add that the nature and severity of the prejudice