Date: 20040930
Docket: T-1321-97
Citation: 2004 FC 1343
Montréal, Quebec, September 30, 2004
Present: THE HONOURABLE MR. JUSTICE MARTINEAU
BETWEEN:
ELI LILLY AND COMPANY and
ELI LILLY CANADA INC.
Plaintiffs
(Defendants by Counterclaim)
and
APOTEX INC.
Defendant
(Plaintiff by Counterclaim)
and
SHIONOGI & CO. LTD.
Defendant by Counterclaim
REASONS FOR ORDER AND ORDER
[1] This is a motion on behalf of the defendant/plaintiff by counterclaim, Apotex Inc. (Apotex), for an order extending the time for the service and filing of Apotex's herein motion in appeal and in extension and for an order setting aside the order of Madam Prothonotary Aronovitch, dated June 4, 2004, which awarded costs to the plaintiffs/defendants by counterclaim, Eli Lilly and Company and Eli Lilly Canada Inc. (Lilly) in the amount of $10,000.00 payable forthwith (the costs order).
[2] I have not been persuaded that the motion herein for extension of delay should be granted, nor that the discretionary order of Prothonotary Aronovitch should be interfered with by this Court.
[3] The decision to allow or refuse an extension of time is discretionary and includes in this case consideration of the following factors: 1) whether Apotex had the intention to initiate an appeal before the time for appeal ran out; 2) the length of the period of extension; 3) prejudice to the opposing party; 4) the explanation for the delay; 5) whether it is in the interest of justice to grant the time extension; 6) whether the appeal itself has merit.
Whether Apotex had the intention to initiate an appeal before the time for appeal ran out
[4] Apotex's evidence on this issue is not conclusive. In this regard, Apotex relies exclusively on the affidavit of D.M. Scrimger, a partner with the law firm Goodmans LLP, solicitors for Apotex, and counsel who argued the motion decided by Prothonotary Aronovitch. There is no affidavit emanating from a representative of Apotex giving particulars on the date and the manner by which Apotex was made aware of the costs order, and as the case may be, with respect to any instructions given to counsel to institute this proceeding. The affidavit subscribed by Mr. Scrimger does not constitute conclusive proof of Apotex's intentions to initiate and pursue the present appeal. The general comments made by Mr. Scrimger in said affidavit, or in the correspondence appended to same are at best evasive.
The length of the period of extension
[5] In this case, Apotex seeks to extend the deadline to appeal the costs order to 60 days, well beyond the 10 days stipulated under Rule 51. I find that the explanations given by counsel for Apotex justifying such a delay are unsatisfactory; hence, I find this delay excessive.
Prejudice to the opposing party
[6] While Lilly may have suffered little prejudice as a result of the delay, it remains that it had to engage counsel to prepare the present case and to appear before the Court. The hearing itself took approximately two hours.
The explanation for the delay
[7] The reason provided for the delay is that Mr. Scrimger failed to read the copy of the costs order which was faxed by the Court to counsel on June 4, 2004, and this, despite the covering letter which explicitly refers to both the public version of the order and endorsement of April 14, 2004 (the main order), and to the costs order (Exhibit D to the affidavit of John Norman).
[8] Shortly thereafter, the Court forwarded a certified copy of both orders to each counsel (Exhibit E of the affidavit of John Norman). Apparently, Mr. Scrimger chose to ignore or not to read them. On June 14, 2004, John Norman, one of the counsel who acted for Lilly in this case, sent a reminder letter to Mr. Scrimger requiring that payment of the sum of $10,000.00 be effected immediately. The facsimile transmission report clearly establishes that the fax transmission was successful (Exhibit F to affidavit of John Norman). A second reminder was sent on July 19, 2004. In answer to the second letter, Mr. Scrimger asks that he be sent a copy of the first reminder and the costs order as "[w]e have no record of receiving the letter of June 14, 2004 to which you refer, and do not know what order you are referring to". I cannot accept this assertion in view of the contrary documentary evidence noted above.
[9] While I agree that it would be difficult to appeal a decision that was not communicated to a party, in this case, Mr. Scrimger clearly received copies of the costs order and the two reminders. I find Lilly's evidence in this regard reliable and convincing. Yet, Apotex did not serve its notice of motion until August 4, 2004. Counsel for Apotex who argued the present motion, Mr. Andrew Brodkin, now says that there was an "oversight" on the part of Mr. Scrimger. However, this is not a matter of missing a delay by just a few days. Here, we are speaking of an additional delay of approximately 50 days. This is five times the usual delay of 10 days for serving and filing a notice of appeal. I find that a satisfactory and credible explanation has not been provided by Apotex for the whole period for which an extension is sought. Therefore, this renders the delay excessive in the circumstances.
Whether it is in the interest of justice to grant the time extension
[10] I recognize that the error of a counsel who has provided satisfactory reasons for missing the delay to make an appeal may, in proper circumstances, constitute a valid reason to grant an extension of time where an arguable case otherwise exists. However, the interests of justice require that in the exercise of its discretion to grant an extension, the Court also examine the nature and the effect that the order in question has on the parties. Granting an extension of time is not in the interest of justice in the present case. There is no substantive right lost by Apotex. The consideration of a motion for extension of delay on an issue of a costs order rendered in the course of an ongoing proceeding adds to the already heavy burden of work of the Court. Indeed, the costs order is very ancillary to this proceeding, and the sum of $10,000.00 ordered to be paid forthwith is trivial in comparison to the amount of money that both parties have spent on these proceedings thus far.
Whether the appeal itself has merit
[11] I do not think that the relative merit of the arguments made by Apotex against the validity of the costs order are sufficient to outweigh the negative elements outlined above. I would not have granted an extension of delay if the matter had been raised preliminarily and had been taken under advisement. That being said, I had the benefit of hearing extensive arguments by both counsel on the issue of the extension of delay and on the merits of the appeal. I have also considered not only the content and effect of the main order on the parties but also the respective written submissions with respect to costs made by counsel to Prothonotary Aronovitch. I have also taken into account the post facto affidavit of H.B. Radomski produced by Apotex in support of the present motion in appeal. Mr. Radomski is the outside counsel acting on behalf of Apotex who has carriage of the action. Included in the scope of the privilege asserted by Apotex were reports, notes, memoranda and letters prepared for the purpose of assisting counsel in preparing for and prosecuting this action. Mr. Srimger, who has assisted Mr. Radomski in this matter, did not review any of these documents, or otherwise assist in the preparation of Apotex's affidavit of documents (Exhibit "1", Schedule 2, answers provided by Apotex which address question 384, together with Appendices 1, 2 and 3 which list the subject documents). In his affidavit, Mr. Radomski gives a detailed description of the thirty-eight documents for which privilege was sought.
[12] Whether or not Apotex had "arguable issues" to put before this Court is largely academic in view of the fact that Apotex has failed to satisfy me that Prothonotary Aronovitch was clearly wrong in making the costs order (which would have justified that I hear the matter de novo since the costs order does not, by itself, raise any question vital to the final issue of the case).
[13] In this patent infringement action, Lilly alleges that Apotex has infringed eight of its patents. These patents relate to processes or intermediate compounds useful in the production of the antibiotic cofactor. The issues of infringement will be determined by comparing the claimed processes against processes used by Apotex suppliers to produce bulk cofactors. On August 19, 2003, Lilly brought a motion for production of Apotex's communications with its suppliers. Apotex had the onus of establishing privilege in these documents. As such, Madam Prothonotary Aronovitch, as case management prothonotary, ordered Apotex to bring a motion seeking relief from production of these relevant documents.
[14] This was the matter of the main order made by Prothonotary Aronovitch on April 4, 2004, which I note has not been appealed by the parties. While each party claims victory, this is not an issue that ought to be finally determined by the Court in this appeal. The result of the proceeding, although a relevant factor, is just one of the many factors that the Court may consider in the allocation of costs and the determination of who ought to pay them. In this regard, the Court has complete discretion in assessing costs, and there are various factors listed in Rule 400 that may be taken into consideration by the Court in determining costs to be awarded. For example, the Court may consider the complexity of the issues, the amount of work, the conduct of a party, the failure of a party to make an admission, etc. In addition, in exercising its discretion, the Court may consider "any other matter that it considers relevant" (Rule 400(3)(a)).
[15] A reading of the main order shows, on April 4, 2004, Prothonotary Aronovitch held that Apotex had wrongly withheld three non-privileged documents although the rest of the documents were held to be privileged. Prothonotary Aronovitch also held that Apotex had wrongly withheld relevant factual information that goes, in Lilly's submission, to the central core of Apotex's defence, a point that I do not need to decide here. Prothonotary Aronovitch further held that Apotex had wrongly refused to answer factual questions relating to process information contained within the privileged documents. Moreover, Prothonotary Aronovitch held that Apotex had delayed in locating and claiming privilege in relevant documents:
Finally, as I have said, the delays involved in locating and claiming privilege for these documents, while problematic, do not go to the merits. They do however place a greater obligation on Apotex to do its part to, complete the discoveries, long overdue in strict compliance with this Order. [Emphasis added]
[16] Subsequent to this order, Prothonotary Aronovitch directed the parties to make submissions on costs. On June 3, 2004, Prothonotary Aronovitch ordered Apotex to pay $10,000.00 in costs to Lilly payable forthwith. The reasons given are as follows:
Given the delays in the production of the documents, as well as the fact that the motion was both complex and in my view largely unnecessary in that common ground could have been found to protect the privilege as well as allow disclosure of relevant facts and documents. I conclude that an elevation order of costs is appropriate and accordingly fix costs in the sum of $10,000.
[17] A microscopic examination of the evidence and of the arguments submitted by counsel is unwarranted. Apart from very special circumstances (which are not present here), the ancillary issue of costs should not serve as an excuse to question or revisit the conclusions of the main order which have not been appealed. With respect to the costs order, the Court should not go into an exercise of choosing or reweighing factors, but should limit itself to verify whether or not the Prothonotary has considered and applied relevant factors. Despite the able argument made by Mr. Brodkin, I am simply unable to conclude that Prothonotary Aronovitch considered irrelevant factors, acted in a capricious or arbitrary manner, or was otherwise clearly wrong in attributing more importance to certain factors. Her decision in this regard is based on the evidence on record and is certainly not irrational. Moreover, as case management prothonotary, Prothonotary Aronovitch has been extensively involved in this proceeding, and thus intimately understands the circumstances, nature and results of the motion in respect of which the order is issued. Indeed, many of the discovery orders in this proceeding have been rendered by her, and as such, Prothonotary Aronovitch is in the unique position to understand the circumstances surrounding the privilege motion. Therefore, this is further justification that the Court takes a deferential attitude in this case, and more particularly with the issue of costs.
[18] For these reasons, the present motion must fail. Accordingly, the costs order directing Apotex to pay the sum of $10,000.00 payable forthwith shall not be varied. In view of the result of this motion for an extension and in appeal, considering the particular circumstances of this case, and noting that this proceeding should not have been made, I find it just and reasonable to allocate and award costs in favour of Lilly in the amount of $3,000.00 payable forthwith.
ORDER
THIS COURT ORDERS that the present motion made by Apotex for an extension of delay and for an order setting aside the costs order made by Prothonotary Aronovitch on June 4, 2004, be dismissed with costs in favour of Lilly in the amount of $3,000.00 payable forthwith.
"Luc Martineau"
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1321-97
STYLE OF CAUSE: ELI LILLY CANADA INC.
Plaintiffs/(Defendants by Counterclaim)
and
APOTEX INC.
Defendant/(Plaintiff by Counterclaim)
and
SHIONOGI & CO. LTD.
Defendant by Counterclaim
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: September 21, 2004
REASONS FOR ORDER
AND ORDER: THE HONOURABLE MR. JUSTICE MARTINEAU
DATED: September 30, 2004
APPEARANCES:
Patrick Smith FOR THE PLAINTIFFS
Andrew Brodkin FOR THE DEFENDANT
SOLICITORS OF RECORD:
Gowling Lafleur Henderson FOR THE PLAINTIFFS
Ottawa, Ontario
Goodmans FOR THE DEFENDANT
Toronto, Ontario
Smart & Biggar FOR THE DEFENDANT
Ottawa, Ontario BY COUNTERCLAIM