T-1695-95
BETWEEN:
MERCK FROSST CANADA INC.
- and-
MERCK & CO., INC.
Applicants,
AND:
THE MINISTER OF NATIONAL HEALTH AND WELFARE
- and -
APOTEX INC.
Respondents.
REASONS FOR ORDER
COSTS APPLICATION
MOOTNESS DECISION
[Delivered by conference call
Friday, May 30, 1997, as edited]
ROTHSTEIN J.:
This application arises out of the inability of the parties to agree on costs payable to Merck by Apotex relating to proceedings under the Patented Medicines (Notice of Compliance) Regulations. In the reasons for order delivered from the Bench in this matter on March 26, 1997, and issued as edited on April 1, 1997, costs were dealt with as follows:
| Apotex agrees that it should be liable to Merck for costs on a solicitor-client basis and an order to that effect, for the period commencing with a service on Merck of the Notice of Allegations giving rise to this prohibition application to the conclusion of proceedings, will be made. |
The order dated March 26, 1997 provided:
| (3) Merck is entitled to costs on a solicitor-client basis from Apotex, from the time of service on Merck of the notice of allegations giving rise to this prohibition application to the conclusion of proceedings. If the parties are unable to agree on the amount of solicitor-client costs payable, they may apply to the Court within 30 days of the date of this order for a resolution of that amount. |
While Apotex recognizes that it is liable to Merck for costs on a solicitor-client basis, it says that such liability is subject to
| (1) The solicitor-client costs being reasonable. |
| (2) No solicitor-client costs being awarded in respect of interlocutory proceedings in which there were costs awarded to Apotex or no costs were awarded at the time. |
| (3) No solicitor-client costs being awarded to Merck in respect of the preliminary motion to dismiss at the commencement of the hearing on the merits on which Apotex was successful and that Apotex such be awarded costs of this motion on a solicitor-client basis. |
There is no question that the solicitor-client costs must be reasonable. As to the second and third considerations advanced by Apotex, there is merit to Apotex"s submission in principle. Where costs have been addressed in interlocutory proceedings by a specific award, I would think it unusual for a subsequent award of costs to purport to amend or reverse such previous disposition. Also, it would be unusual to award solicitor-client costs to the unsuccessful party on a motion. But this is not to say that there can never be occasions where, notwithstanding previous dispositions of costs, a final order respecting costs may not take into account previous interlocutory proceedings.
In this case there were no specific awards of costs in any event of the cause in interlocutory proceedings. All interlocutory orders made in this case are silent as to costs or where costs are mentioned, they are payable in the cause. While silence may itself be a disposition as to costs, such as when a judge, based on the circumstances, exercises his or her discretion not to award costs, I think in judicial review proceedings that is not to be presumed. Under Rule 1618 of the Federal Court Rules, no costs shall be payable unless the Court for special reasons so orders. I would think that in judicial review proceedings, absent an express statement as to costs, the presumption would be that silence indicates that the judge hearing the interlocutory matter did not consider there were special reasons for ordering costs. Further, when costs are ordered in the cause in judicial review proceedings, in the absence of an express finding of special reasons, effect cannot be given to such an order. See Everett v. Canada (Minister of Fisheries and Oceans), (1994) 25 Admin. L.R. (2d) 112 (F.C.A.)). In all these circumstances, when, at the conclusion of proceedings, the Court is persuaded that special circumstances justify an award of costs, the award, in my view may include amounts applicable to interlocutory proceedings in which, at the time, no award or no effective award was made.
Solicitor-client costs were not awarded in this case for the reasons one normally expects, such as inappropriate conduct or misconduct by a party, undue prolonging of proceedings, delay, etc. (See examples in Federal Court Practice 1997, Sgayias at 411.) Rather, they were awarded because Apotex, in representations to the Court in support of its application to dismiss Merck"s prohibition application on the grounds of mootness, recognized that these proceedings were precipitated by Apotex by reason of its service on Merck of a notice of allegations regarding a process for producing lovastatin which Apotex subsequently decided to withdraw. Apotex required an order dismissing the prohibition application because the Minister of National Health and Welfare refused to issue a notice of compliance to Apotex pursuant to a different allegation while these prohibition proceedings were still outstanding.
Without repeating what has already been said at length in the decision on the merits in this file, Apotex strenuously argued that the Court should order the prohibition application dismissed as quickly as possible because Apotex was, in its view, improperly being denied its notice of compliance based on its other allegation and it was being restrained without legal basis from marketing its lovastatin. While I am unable to quote Apotex"s representations verbatim, in substance they were that Apotex recognized that as it had caused these prohibition proceedings to be commenced by a notice of allegation which it no longer wished to pursue, that it should be responsible for Merck"s solicitor-client costs concerning these proceedings. I am satisfied that Apotex's conduct, in rendering moot, proceedings which Apotex itself precipitated, constituted special reasons for awarding costs. Near the conclusion of argument, counsel for the parties specifically addressed the period for which solicitor-client costs should be payable, and it was as a result of those submissions and Apotex"s agreement to pay solicitor-client costs that the above-quoted paragraphs in the Reasons for Order and Order were included.
At the time of that argument, no submissions of the nature made on this application were made by Apotex. Counsel for Merck has characterized Apotex"s request for costs on the motion to dismiss as "artful casuistry" which means, amongst other things, a quibbling way of dealing with difficult cases of duty (see Shorter Oxford English Dictionary ). I agree with this characterization. After itself proposing to pay solicitor-client costs to Merck without reservation, a subsequent attempt to quibble about what should or should not be included is inappropriate.
In this respect, it is also relevant for me to observe that in a subsequent case before me under the Patented Medicines (Notice of Compliance) Regulations, where Apotex was successful on a motion to dismiss prohibition applications on the grounds of mootness, because Apotex had withdrawn its allegations relating to those prohibition applications, (see Sandoz v. Apotex, court files T-1463-93 and T-860-95, May 2, 1997), Apotex made what I characterize as a more sophisticated argument with respect to the obligation to pay solicitor-client costs. In that case, Apotex was successful in convincing me that while Apotex should be responsible for solicitor-client costs generally when it withdraws its allegation giving rise to the proceedings, it should be entitled to costs on a party-party basis on a successful contested application to dismiss based on the grounds of mootness. One of the arguments made was that the issue is no longer novel and that Sandoz should have consented to the dismissal. In other words, Apotex contrasted the circumstances in that case with this one, leading me to the view that while Apotex should be entitled to costs of its application to dismiss in that case, it recognized that its position there was different than here, where the issue arose for the first time.
In its original submission pertaining to costs in this matter, Apotex led me to believe that it was agreeing to be responsible for all of Merck"s reasonable solicitor-client costs from the service on Merck of the relevant notice of allegation to the conclusion of proceedings. There were no exceptions suggested and certainly no suggestion that Apotex should be entitled to costs on the mootness proceedings or that Merck should not be entitled to costs for those proceedings.
Had Apotex made appropriate arguments at the time, there might have been a different disposition with respect to some aspects of the costs at issue. But it did not and I am satisfied that the Court"s intention, as expressed in its reasons given at that time, based on Apotex"s submissions and concessions respecting costs, was that Merck should receive reasonable solicitor-client costs from service of the notice of allegation to the conclusion of proceedings in their entirety. In essence, it would seem that Apotex is attempting to have the Court reconsider its earlier disposition with regard to costs. Such reconsideration is not justified under Rules 337(5) or 1733 of the Federal Court Rules .
The parties have requested a further opportunity to resolve the matter of costs in light of these reasons. The matter is therefore adjourned to Monday, June 30, 1997, at 9:00 a.m., by way of conference call at which time, if the parties have not been able to arrive at a resolution, a time and place for hearing or conference call shall be fixed by the Court for the purpose of a final determination on the issue of costs.
(Sgd.) "Marshall E. Rothstein"
Judge
VANCOUVER, B.C.
JUNE 10, 1997
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| STYLE OF CAUSE: MERCK FROSST CANADA INC. and MERCK CO., INC. |
- and -
| THE MINISTER OF NATIONAL HEALTH AND WELFARE and APOTEX INC. |
COURT NO.: T-1695-95
PLACE OF HEARING: Halifax, NS
DATE OF HEARING: May 12, 1997
REASONS FOR ORDER OF Rothstein, J. dated
June 10, 1997
APPEARANCES:
Mr. Nelson Landry for Applicant
Mr. Harry Radomski for Respondent
SOLICITORS OF RECORD:
Ogilvy Renault
Montreal, PQ for Applicant
Goodman, Phillips & Vineberg for Respondent
Toronto, ON