Date: 20030625
Docket: T-1168-01
Neutral citation: 2003 FCT 788
Toronto, Ontario, June 25th, 2003
Present: The Honourable Mr. Justice O'Reilly
BETWEEN:
APOTEX INC.
Plaintiff
and
SYNTEX PHARMACEUTICALS INTERNATIONAL LIMITED and
HOFFMANN-LaROCHE LIMITED
Defendants
REASONS FOR ORDER AND ORDER
[1] Under rather unusual circumstances, the Plaintiff Apotex recently sought and obtained an extension of time, to October 15, 2001, to serve a statement of claim against the Defendant Syntex. It had attempted to serve Syntex within the usual 60-day time frame by serving Smart and Biggar, its solicitors, back in July 2001. However, the firm had no instructions to accept service for Syntex and informed Apotex that it must serve Syntex directly in Bermuda. It did so on October 15, 2001, 45 days late.
[2] The issue of late service seemed to have been overtaken by intervening steps in the action. In August 2001, the Defendant Hoffman-LaRoche presented a motion to strike the statement of claim. That motion was granted by Prothonotary Lafrenière, but overturned on appeal on December 6, 2001. Blais J. held that the issues raised in the statement of claim, involving the statutory interpretation of s. 8 of the Patented Medicines (Notice of Compliance) Regulations, were best left for determination at trial. His order gave the defendants (plural) 20 days to file "their statement of defence." In other words, on December 6, 2001, Blais J. was under the impression that there were two defendants. A further appeal to the Federal Court of Appeal was dismissed.
[3] In due course, Hoffman-LaRoche filed its defence, but Syntex did not. Upon inquiry by Apotex, Smart and Biggar maintained that Syntex had not been properly served with the statement of claim. However, it was not until a status review was conducted and case management began that a definitive resolution of the issue of service on Syntex was seriously sought. Prothonotary Aronovitch issued a direction in April 2003 seeking an explanation as to whether proper service had been made. Further discussions with Prothonotary Aronovitch led to the filing of Apotex's motion for an extension of the time period for service of the statement of claim. That motion was granted by Prothonotary Lafrenière on May 12, 2003. Syntex wants to set that decision aside.
Issues
[4] There are two issues. The first is the determination of the standard of review applicable to the decision of Prothonotary Lafrenière to grant the extension of time. The second is the question whether his decision should be overturned.
[5] I will not deal with the first issue. It is arguable that the decision to grant an extension of time to serve a statement of claim is a matter "vital to the final issue of the case" and should be subjected to review de novo (Canada v. Acqua-Gem Investments Ltd. (1993) 2 F.C. 425, at 462-3). If the extension had been denied, the action against Syntex would have effectively come to an end. I am willing to accept that characterization for present purposes given my conclusion that the decision of Prothonotary Lafrenière was, in any case, correct.
[6] The question whether an extension of time should be granted "will turn on the facts of each particular case" (Canada (Attorney General) v. Hennelly (1999), 244 N.R. 399). The overarching consideration is to ensure that justice is done between the parties (Registered Public Accountants Association of Alberta v. Society of Professional Accountants of Canada (2000), 5 C.P.R. (4th) 427 (F.C.T.D.)) According to Hennelly, there are four main factors to be considered: 1. A continuing intention to pursue the application;
2. That the application has some merit;
3. That no prejudice to the respondent arises from the delay; and
4. That a reasonable explanation for the delay exists.
1. Continuing Intention
[7] The Plaintiff has clearly exhibited a continuing intention to prosecute its action against both defendants. It served its statement of claim on both, inquired into the status of Syntex's statement of defence, repeatedly sought reconsideration of Smart and Biggar's position regarding service and raised the issue during status review and case management. The delay in serving Syntex at the outset was just 45 days. The ensuing period was taken up with various interlocutory steps and cannot in any way be interpreted as a lapse of interest in the action against Syntex.
2. Some Merit
[8] Syntex argues that Apotex must put forward evidence of merit, not just argument. It cites two cases in which there was indeed evidence before the Court (See RPAAA, above; and Budget Steel Ltd. v. Seaspan International Ltd. 2003 FCT 610). However, these cases do not state that the tendering of evidence is essential to success. In some situations, the existence of merit may be ascertainable by reference to other sources, including the pleadings. Here, I need only refer to the judgments of Blais J. and the Court of Appeal on the motion to strike Apotex's statement of claim. It has already been decided that this action raises an issue of statutory interpretation that should proceed to trial.
3. Prejudice
[9] It is difficult to find that Syntex would be prejudiced if the extension of time were granted. Syntex has been aware of this action throughout. Its solicitors, also acting for the Defendant Hoffman-Laroche, have been involved all along and either directly or indirectly have been vigilant in protecting Syntex's interests. They made a motion to strike the action on behalf of the Defendant Hoffman-LaRoche. Had it been successful, that motion would have equally benefited Syntex. The fact that it was unsuccessful, and the same grounds cannot be relitigated at this point, cannot be viewed as prejudicial to Syntex's interests. It still has a full opportunity to defend the action.
4. Reasonable Explanation
[10] Apotex provided a reasonable explanation for late service and the delay in bringing this motion. It believed that Smart and Biggar would accept timely service on behalf of Syntex. It viewed the order of Blais J. as binding on Syntex and awaited a statement of defence. It understood that the issue was resolved by the order of December 10, 2002 on status review that the proceedings against both defendants should be continued.
Conclusion
[11] Taking account of all of the circumstances, including the four specific factors discussed above, I am satisfied that the interests of justice favour the granting of an extension of time to serve the statement of claim, as had been decided by Prothonotary Lafrenière. Accordingly, this motion is dismissed.
[12] Counsel asked to have an opportunity to make written submissions on the subject of costs. I will consider such submissions if filed within 5 business days of this order. Submissions should not exceed two pages.
ORDER
THIS COURT ORDERS that
1. The motion is dismissed.
2. The parties may file written submissions on costs, not to exceed two pages, within 5 business days of this order.
"James W. O'Reilly"
J.F.C.C.
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1168-01
STYLE OF CAUSE: APOTEX INC.
Plaintiff
and
SYNTEX PHARMACEUTICALS INTERNATIONAL
LIMITED AND HOFFMAN-LAROCHE LIMITED
Defendants
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: JUNE 23, 2003
REASONS FOR ORDER
AND ORDER : O'REILLY J.
DATED: JUNE 25th, 2003
APPEARANCES: Mr. Andrew Brodkin
For the Plaintiff
Ms. Nancy Pei
For the Defendants
SOLICITORS OF RECORD: Goodmans LLP
Barristers & Solicitors
Toronto, Ontario
For the Plaintiff
Smart & Biggar
Toronto, Ontario
For the Defendants
FEDERAL COURT OF CANADA
TRIAL DIVISION
Date: 20030625
Docket: T-1168-01
BETWEEN:
APOTEX INC.
Plaintiff
and
SYNTEX PHARMACEUTICALS INTERNATIONAL
LIMITED AND HOFFMANN-LAROCHE LIMITED
Defendants
REASONS FOR ORDER
AND ORDER