BETWEEN:
SYNTEX PHARMACEUTICALS INTERNATIONAL LIMITED and
HOFFMANN-LA ROCHE LIMITED.
Appellants
(Defendants)
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
as represented by THE ATTORNEY GENERAL OF CANADA
Respondents
(Third Party)
and
APOTEX INC.
Respondent
(Plaintiff)
Heard at Toronto, Ontario, on December 12, 2005.
Judgment delivered from the Bench at Toronto, Ontario, on December 12, 2005.
REASONS FOR JUDGMENT OF THE COURT BY: SEXTON J.A.
Docket: A-182-05
Citation: 2005 FCA 424
CORAM: DÉCARY J.A.
SEXTON J.A.
EVANS J.A.
BETWEEN:
SYNTEX PHARMACEUTICALS INTERNATIONAL LIMITED and
HOFFMANN-LA ROCHE LIMITED.
Appellants
(Defendants)
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
as represented by THE ATTORNEY GENERAL OF CANADA
Respondents
(Third Party)
and
APOTEX INC.
Respondent
(Plaintiff)
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Toronto, Ontario, on December 12, 2005)
[1] The appellants appeal the Order of the Federal Court that struck out a Third Party Notice issued by the appellants joining Her Majesty the Queen (HMQ) as a third party in an action for damages by Apotex against the appellants.
[2] The appellants had initiated a prohibition proceeding under section 6 of the Patent Medicine (Notice of Compliance) Regulations (Regulations) with respect to a patent owned by the appellants. In that proceeding, the court issued an order prohibiting the Minister from issuing a Notice of Compliance (NOC) to Apotex.
[3] In a separate action, Apotex sued the appellants alleging the patent to be invalid and were successful. Approximately two weeks after the judgment was pronounced which declared the patent to be invalid, the Court lifted the prohibition order on consent of the parties.
[4] The Minister then issued a NOC. The two-week delay in issuing the NOC was said by HMQ to result from the fact that the Minister had been reluctant to issue the NOC until the prohibition order was actually lifted by the Court.
[5] Apotex subsequently commenced an action under section 8 of the Regulations against the appellants for damages it suffered by way of profits lost because of the delay of some four years in the issuance of its NOC, which delay was occasioned by the prohibition order which the appellants had obtained.
[6] The appellants, in turn, claimed over against HMQ in their Third Party Notice for any damages proven by Apotex to have been suffered during the two-week delay between the issuance of the judgment invalidating the patent and the time when the NOC was issued.
[7] HMQ sought to strike out the Third Party Notice but was unsuccessful before the Prothonotary who held that although no claim over against the Crown could be made by the appellants pursuant to section 8 of the Regulations, nevertheless the Third Party Notice should not be struck out because, although the pleas in the Third Party Notice were deficient, they might be sufficient to support an action for negligent breach of statute.
[8] An appeal to the Federal Court was allowed and the Third Party Notice was struck out with the Court holding that:
a. Section 8 of the Regulations provides a complete code of recovery against a first person and there is no provision in the Regulations regarding liability of the Crown for any breach of statutory duty.
b. There is no cause of action known as negligent breach of statute.
[9] We agree with the Prothonotary and with the Federal Court that section 8 of the Regulations does not provide for any claim over against the Crown and that it is a complete code for the recovery of damages by a second person against a first person. We do not, however, wish to be taken as expressing any view as to the correctness of the statement of the Federal Court that "any liability by the defendants ends on the day the patent was declared invalid."
Section 8, Patent Medicine (Notice of Compliance) Regulations
| 8 (1) If an application made under subsection 6(1) is withdrawn or discontinued by the first person or is dismissed by the court hearing the application or if an order preventing the Minister from issuing a notice of compliance, made pursuant to that subsection, is reversed on appeal, the first person is liable to the second person for any loss suffered during the period
(a) beginning on the date, as certified by the Minister, on which a notice of compliance would have been issued in the absence of these Regulations, unless the court is satisfied on the evidence that another date is more appropriate; and (b) ending on the date of the withdrawal, the discontinuance, the dismissal or the reversal.
(2) A second person may, by action against a first person, apply to the court for an order requiring the first person to compensate the second person for the loss referred to in subsection (1).
(3) The court may make an order under this section without regard to whether the first person has commenced an action for the infringement of a patent that is the subject matter of the application.
(4) The court may make such order for relief by way of damages or profits as the circumstances require in respect of any loss referred to in subsection (1).
(5) In assessing the amount of compensation the court shall take into account all matters that it considers relevant to the assessment of the amount, including any conduct of the first or second person which contributed to delay the disposition of the application under subsection 6(1). SOR/98-166, ss. 8, 9. |
8 (1) Si la demande présentée aux termes du paragraphe 6(1) est retirée ou fait l'objet d'un désistement par la première personne ou est rejetée par le tribunal qui en est saisi, ou si l'ordonnance interdisant au ministre de délivrer un avis de conformité, rendue aux termes de ce paragraphe, est annulée lors d'un appel, la première personne est responsable envers la seconde personne de toute perte subie au cours de la période : a) débutant à la date, attestée par le ministre, à laquelle un avis de conformité aurait été délivré en l'absence du présent règlement, sauf si le tribunal estime d'après la preuve qu'une autre date est plus appropriée; b) se terminant à la date du retrait, du désistement ou du rejet de la demande ou de l'annulation de l'ordonnance.
(2) La seconde personne peut, par voie d'action contre la première personne, demander au tribunal de rendre une ordonnance enjoignant à cette dernière de lui verser une indemnité pour la perte visée au paragraphe (1).
(3) Le tribunal peut rendre une ordonnance aux termes du présent article sans tenir compte du fait que la première personne a institué ou non une action pour contrefaçon du brevet visé par la demande.
(4) Le tribunal peut rendre l'ordonnance qu'il juge indiquée pour accorder réparation par recouvrement de dommages-intérêts ou de profits à l'égard de la perte visée au paragraphe (1).
(5) Pour déterminer le montant de l'indemnité à accorder, le tribunal tient compte des facteurs qu'il juge pertinents à cette fin, y compris, le cas échéant, la conduite de la première personne ou de la seconde personne qui a contribué à retarder le règlement de la demande visée au paragraphe 6(1). DORS/98-166, art. 8 et 9. |
[10] However, we are concerned with the Federal Court decision as to the second point. In our view, while strictly speaking it might be said there is no such tort as negligent breach of a statute, there nevertheless can be a claim in negligence against the Crown and proof of a statutory breach that causes damages may be evidence of such negligence. The Federal Court failed to address this.
[11] In Odhavji Estate v. Woodhouse, [2003] 3 S.C.R. 263 at para. 31, the Supreme Court of Canada held that the failure of a public officer to perform a statutory duty can give rise to a tort.
I wish to stress that this conclusion is not inconsistent with R. v. SaskatchewanWheat Pool..., in which the Court established that the nominate tort of statutory breach does not exist. Saskatchewan Wheat Pool states only that it is insufficient that the defendant has breached the statute. It does not, however, establish that the breach of a statute cannot give rise to liability if the constituent elements of tortuous responsibility have been satisfied. Put a different way, the mere fact that the alleged misconduct also constitutes a breach of statute is insufficient to exempt the officer from civil liability. Just as a public officer who breaches a statute be liable for negligence, so too might a public officer who breaches a statute be liable for misfeasance in a public office. [Emphasis in original.]
[12] Furthermore, according to the Supreme Court of Canada, proof of statutory breach that causes damages can constitute evidence of common law negligence. R. v. SaskatchewanWheat Pool, [1983] 1 S.C.R. 205 at 227.
[13] Also, section 3 of the Crown Liability and Proceedings Act provides for vicarious liability of the Crown for torts committed by its servants.
| 3. The Crown is liable for the damages for which, if it were a person, it would be liable (a) in the Province of Quebec, in respect of (i) the damage caused by the fault of a servant of the Crown, or (ii) the damage resulting from the act of a thing in the custody of or owned by the Crown or by the fault of the Crown as custodian or owner; and (b) in any other province, in respect of (i) a tort committed by a servant of the Crown, or (ii) a breach of duty attaching to the ownership, occupation, possession or control of property. |
3. En matière de responsabilité, l'État est assimilé à une personne pour : a) dans la province de Québec :
(i) le dommage causé par la faute de ses préposés, (ii) le dommage causé par le fait des biens qu'il a sous sa garde ou dont il est propriétaire ou par sa faute à l'un ou l'autre de ces titres; b) dans les autres provinces : (i) les délits civils commis par ses préposés, (ii) les manquements aux obligations liées à la propriété, à l'occupation, à la possession ou à la garde de biens. |
[14] The problem in the present case is that the appellants have not properly pleaded a valid cause of action for negligence. In its Third Party Notice, the appellants have not alleged any negligence, let alone any particulars of the negligence that would satisfy the ordinary rules of pleading.
[15] A plea of negligence with sufficient particulars thereof is, in our view, necessary. In commenting on what is necessary to constitute the tort, Dickson J. in R. v. Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205 at 226-27 said:
....Statutory breach, and not negligence, is pleaded. The case has been presented exclusively on the basis of breach of statutory duty. The Board has not proved what Lord Atkin referred to as statutory negligence, i.e. an intentional or negligent failure to comply with a statutory duty. There is no evidence at trial of any negligence or failure to take care on the part of the Pool...
[16] As the pleading of any negligence on the part of the respondent is totally lacking in the Third Party Notice it cannot stand in its present form. Whether the appellants are able to make the requisite pleading of negligence, we are unable to say, although counsel for the plaintiffs was unable to outline to the Court any such adequate pleading. It must be left to the appellants to attempt to amend the Third Party Notice so as to plead a valid cause of action in negligence if they are so inclined, and with some reluctance we give them leave to do so.
[17] The appeal will therefore be allowed but only so as to add a provision to the Order of the Federal Court. That provision would read:
Without prejudice to the appellants' right to file an amended Third Party Notice alleging a valid cause of action in negligence.
[18] There should be no order as to costs.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-182-05
STYLE OF CAUSE: SYNTEX PHARMACEUTICALS INTERNATIONAL LIMITED and HOFFMANN-LA ROCHE LIMITED
Appellants
(Defendants)
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by THE ATTORNEY GENERAL OF CANADA
Respondent
(Third Party)
and
APOTEX INC.
Respondent
(Plaintiff)
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: DECEMBER 12, 2005
REASONS FOR JUDGMENT OF
THE COURT BY: (DÉCARY, SEXTON & EVANS JJ.A.)
DELIVERED FROM THE
BENCH BY: SEXTON J.A.
APPEARANCES:
Lynn Ing
Nancy Pei FOR THE APPELLANTS (DEFENDANTS)
Rick Woyiwada FOR THE RESPONDENT (THIRD PARTY)
SOLICITORS OF RECORD:
Smart & Biggar
Toronto, Ontario FOR THE APPELLANTS (DEFENDANTS)
John H. Sims Q.C.
Deputy Attorney General of Canada FOR THE RESPONDENT (THIRD PARTY)