Date: 20011210
Docket: T-428-01
Neutral Citation: 2001 FCT 1351
Between:
APOTEX INC.
Plaintiff,
-and-
GLAXO GROUP LIMITED and
GLAXO WELLCOME INC.
Defendants.
REASONS FOR ORDER AND ORDER
KELEN J.:
[1] This is an appeal pursuant to Rule 51 of the Federal Court Rules, 1998 from the Order of Associate Senior Prothonotary Giles dated September 24, 2001 dismissing the defendants' motion to strike paragraphs 6, 7, and 8 of the plaintiff's Reply and Defence to Counterclaim.
[2] The standard of review in an appeal from the discretionary Order of the Prothonotary is that the Order be demonstrably "clearly wrong", in that the decision was based upon an incorrect principle of law. The Federal Court of Appeal held in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, [1993] F.C.J. No. 103 that:
Discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless 1) they are 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, or 2) they raise questions vital to the final issue of the case.
[3] Paragraphs 6, 7 and 8 of the plaintiff's Reply and Defence to Counterclaim refer to two Federal Court proceedings in which the defendant applied for orders prohibiting the Minister of Health from issuing a Notice of Compliance with respect to Apotex' cefuroxime axetil co-precipitate. The paragraphs refer to the decisions of the Federal Court, Trial Division and Federal Court of Appeal in proceedings under the Patented Medicine (Notice of Compliance) Regulations (the "Regulations") with respect to the same product as in the case at bar.
[4] It is well established that proceedings under the Regulations are summary proceedings, different from conventional patent infringement actions, and concerned as to whether or not the Minister should be prohibited from issuing a Notice of Compliance. Warner-Lambert Canada Inc., Parke-Davis Division v. Canada (Minister of Health), 2001 FCT 931, [2001] F.C.J. No. 1335 (F.C.T.D.), per Dawson J. at paragraph 53.
[5] The issue in this appeal is whether the said paragraphs of the Reply and Defence to Counterclaim, which make reference to these proceedings, should be struck under Rule 221 of the Federal Court Rules , 1998 which provides the Court with the discretion to strike out paragraphs of a pleading where such paragraphs are, inter alia:
(1) immaterial or redundant;
(2) scandalous, frivolous, or vexatious;
(3) may prejudice or delay the fair trial of the action; or
(4) are otherwise an abuse of the process of the Court.
For the purpose of a motion under Rule 221, the Court must accept the facts alleged as true and decide whether the alleged facts advance or support the Reply and Defence to Counterclaim, or are the alleged facts plainly and obviously futile.
[6] It is settled that the Court will generally refuse to strike out "surplus statements" which are not prejudicial, and that doubt is to be resolved in favour of permitting the pleading so that the relevant evidence in support of the pleading may be brought before the Trial Judge; Imperial Parking Ltd. v. Barrington (1995), 104 F.T.R. 132, [1995] F.C.J. No.1638 (F.C.T.D.) per Prothonotary Hargrave, and Huzar v. Canada (1997), 139 F.T.R. 81, [1997] F.C.J. No.1556 (F.C.T.D.), where Prothonotary Hargrave held at paragraphs 13, 14 and 15 :
[...] It must be plainly, obviously and beyond doubt that a pleading is futile and will not succeed before it will be struck out. When it is alleged that an action is scandalous, frivolous, or vexatious, under Rule 419 (1)(c) the test is as stringent as or even more stringent than that under Rule 419 (1)(a) [Rule 419 is the predecessor to Rule 221][...]
When there are contentious or serious issues of law, disputed points of law, or uncertain points of law, they ought not be determined on a summary motion to strike out, but rather left for a decision at Trial when all the facts are known [...]
The final relevant point of procedure is that a Court will not strike out statements that are merely surplus, provided no prejudice flows from them [...]
[7] In this case, the plaintiff submits that the prior proceedings are relevant, and that the Court in a 31-page Decision, considered and constructed the individual patents with respect to the plaintiff's formulation in issue, and that the Federal Court of Appeal on April 2, 2001 upheld this Decision and made a finding at paragraph 16:
There can be no infringement of the ‘313 patent claims if both properties are not present in the cefuroxime axetil that is utilized.
[8] The plaintiff accepts that estoppel and res judicata do not apply, but argues that this Decision has some relevance in a subsequent action involving the same patent. The defendants take issue in paragraph 18 of the Statement of Defence and Counterclaim "with the characterization of the procedural history of the proceedings in Court File Numbers T-415-98 and T-806-00". Accordingly, the "characterization" of these proceedings is already an issue in the pleadings.
[9] Therefore, the plaintiff submits that the prior proceedings are relevant and the defendants deny their relevance. While it is clear that a patent infringement action is independent and separate from an action under the Regulations, the history of the proceedings and the determinations by the Court may have some relevance.
[10] Accordingly, it was within the discretion of the Prothonotary to not strike these paragraphs of the Plaintiff's Reply and Defence to Counterclaim in that they may have some relevance, they are not scandalous, frivolous, or vexatious, and they will not prejudice or
delay the fair trial of the action. Reference to prior proceedings are not plainly, obviously and beyond doubt a futile pleading. In any event, the jurisprudence is that the Court will not strike out statements that are merely surplus provided no prejudice flows from them. In this case, the Court will not be prejudiced from making an independent, fresh determination in the patent infringement action because of the two prior proceedings under the Regulations.
It is unrealistic and irrational for the defendants to ask that the Court to ignore the history of the proceedings between the parties with respect to related issues.
[11] The plaintiff also submitted that the prior proceedings are relevant to the plaintiff being awarded solicitor-client costs in the counterclaim. There is a conflict in the jurisprudence with respect to whether pleadings relevant to legal costs are necessary or appropriate, Bonner et al. v. Day et al. (1985), 49 O.R. (2d) 268, 47 C.P.C. 278 (H.C.J.) per Rosenberg J. It is clear that the plaintiff is putting the defendants on notice that its unsuccessful prior attempts to prohibit the plaintiff will be the basis for the plaintiff seeking solicitor-client costs in the defendants' counterclaim. This conflict of law as to the proprietary of pleadings relevant to costs ought not be decided on a motion to strike. Contentious questions of law such as this one ought to be left for the Trial Judge.
[12] For these reasons the Prothonotary was not "clearly wrong" in dismissing the defendants' motion to strike paragraphs 6, 7 and 8 of the plaintiff's Reply and Defence to Counterclaim.
ORDER
[13] Accordingly, this appeal is dismissed with costs to the plaintiff in any event of the cause.
"Michael A. Kelen"________________________
Judge
OTTAWA, ONTARIO
DECEMBER 10, 2001