Apotex Inc. v. Can., 2014 FC 1087

• Judge: Hughes, J.
• Court: Federal Court (Canada)
• Case Date: November 04, 2014
• Jurisdiction: Canada (Federal)
• Citations: 2014 FC 1087;(2014), 468 F.T.R. 48 (FC)

Apotex Inc. v. Can. (2014), 468 F.T.R. 48 (FC)

MLB headnote and full text

Temp. Cite: [2014] F.T.R. TBEd. NO.020

Apotex Inc. (plaintiff) v. Her Majesty the Queen (defendant)

(T-1930-98; 2014 FC 1087)

Indexed As: Apotex Inc. v. Canada

Federal Court

Hughes, J.

November 18, 2014.

Summary:

Apotex filed a submission with Health Canada on January 25, 1988, for approval to sell a generic version of a trazodone drug in Canada. Seven years later, after much correspondence, telephone conversations, meetings, the institution of two lawsuits and a settlement agreement, Apotex received that approval on February 28, 1995. By that time, two generic competitors had already received approval to sell their versions of that drug in Canada. In October 1998, Apotex commenced an action for damages against Her Majesty the Queen (Canada), including punitive damages, based upon multiple causes of action, including negligence, breach of a settlement agreement, misfeasance in public office, and misrepresentation. Canada defended the action, arguing, inter alia, that the claims were barred by limitation periods and statute, that Apotex had repudiated the settlement, that there was no duty of care owed and that Apotex did not mitigate its damages.

The Federal Court allowed the Apotex action. The court held that Apotex was entitled in tort to damages but was required to mitigate those damages. The extent of those damages would be assessed at a later trial.

Crown - Topic 1565.1

Torts by and against Crown - Negligence by Crown - Issuance of notices of compliance for drugs - Apotex sought approval from Health Canada to sell a generic version of a trazodone drug in Canada, relying on a non-Canadian (in this case United States) drug product as the reference product (equivalency standard) - Despite a settlement agreement to the contrary, Health Canada continued to insist on a Canadian standard, unless Apotex could conclusively prove identicality between the United States reference product and the Canadian product - It took seven years for Apotex to get approval and by that time two generic competitors had already received their approval - Apotex sued Canada, alleging negligence - The Federal Court allowed the action, holding that Canada was liable for negligence on the basis of the Cooper/Anns test - See paragraphs 120 to 131.

Crown - Topic 4082

Actions by and against Crown in right of Canada - Defences, bars or exclusions - Limitation of actions - On January 25, 1988, Apotex sought approval from Health Canada to sell a generic version of a trazodone drug in Canada, relying on a non-Canadian (in this case United States) drug product as the reference product (equivalency standard) - Despite a 1990 settlement agreement to the contrary, Health Canada continued to insist on a Canadian standard, unless Apotex could conclusively prove identicality between the United States reference product and the Canadian product - On February 28, 1995, Apotex got its approval, but by that time two generic competitors had already received their approval - On October 9, 1998, Apotex sued Canada, alleging breach of contract (i.e., the settlement agreement) - A limitations issue arose - The Federal Court held that Apotex's contract action was barred by the six year limitation period in the Limitations Act (Ont.) - See paragraphs 136 to 143.

Damages - Topic 1002

Mitigation - Duty to mitigate - On January 25, 1988, Apotex sought approval from Health Canada to sell a generic version of a trazodone drug in Canada, relying on a non-Canadian (in this case United States) drug product as the reference product (equivalency standard) - Despite a 1990 settlement agreement to the contrary, Health Canada continued to insist on a Canadian standard, unless Apotex could conclusively prove identicality between the United States reference product and the Canadian product - On February 28, 1995, Apotex got its approval, but by that time two generic competitors had already received their approval - On October 9, 1998, Apotex sued Canada alleging, inter alia, negligence - Canada raised a mitigation issue - The Federal Court found Canada liable in negligence, but held that Apotex failed to mitigate its damages - Had Apotex had its product retested using a Canadian reference product in 1991 it would have obtained approval much earlier - Damages should, therefore, only run to mid 1992 - See paragraphs 150 to 163.

Limitation of Actions - Topic 2021

Actions in contract - Actions for breach of contract - General - [See Crown - Topic 4082 ].

Torts - Topic 9162

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Misfeasance in or abuse of public office - The Federal Court reviewed the law respecting the tort of misfeasance in public office - See paragraphs 112 to 116.

Torts - Topic 9162

Duty of care - Particular relationships - Claims against public officials, authorities or boards - Misfeasance in or abuse of public office - Apotex sought approval from Health Canada to sell a generic version of a trazodone drug in Canada, relying on a non-Canadian (in this case United States) drug product as the reference product - Despite a settlement agreement to the contrary, Health Canada continued to insist on a Canadian standard, unless Apotex could conclusively prove identicality between the United States reference product and the Canadian product - It took seven years for Apotex to get approval and by that time two generic competitors had already received their approval - Apotex sued Canada, alleging misfeasance in public office - The Federal Court allowed the action - Health Canada officials acted in bad faith by engaging in a deliberate exercise of conducting its examination of Apotex's submissions on the basis of identicality, notwithstanding an undertaking to do otherwise - Health Canada officials were also aware that a delay would be likely to injure Apotex - See paragraphs 112 to 119.

Cases Noticed:

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201; 2003 SCC 69, refd to. [para. 112].

O'Dwyer v. Ontario Racing Commission (2008), 238 O.A.C. 364; 293 D.L.R.(4th) 559; 2008 ONCA 446, refd to. [para. 114].

TeleZone Inc. v. Canada (Attorney General), [2010] 3 S.C.R. 585; 410 N.R. 1; 273 O.A.C. 1; 2010 SCC 62, refd to. [para. 120].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al., [2001] 3 S.C.R. 537; 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268; 2001 SCC 79, refd to. [para. 121].

Cooper v. Hobart - see Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Gordon v. Canada, [2013] F.T.R. Uned. 294; 2013 FC 597, refd to. [para. 121].

Hill et al. v. Hamilton-Wentworth Regional Police Services Board et al., [2007] 3 S.C.R. 129; 368 N.R. 1; 230 O.A.C. 260, refd to. [para. 122].

Los Angeles Salad Co. et al. v. Canadian Food Inspection Agency et al. (2013), 334 B.C.A.C. 24; 572 W.A.C. 24; 358 D.L.R.(4th) 581; 2013 BCCA 34, refd to. [para. 122].

Central Trust Co. v. Rafuse and Cordon, [1986] 2 S.C.R. 147; 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109, refd to. [para. 123].

British Columbia v. Imperial Tobacco Canada Ltd. et al., [2011] 3 S.C.R. 45; 419 N.R. 1; 308 B.C.A.C. 1; 521 B.C.A.C. 1; 2011 SCC 42, refd to. [para. 126].

R. v. L'Heureux (1913), 14 Ex. C.R. 250; 14 D.L.R. 604, refd to. [para. 136].

Kibale v. Canada (1990), 123 N.R. 153 (F.C.A.), refd to. [para. 136].

Peixeiro v. Haberman, [1997] 3 S.C.R. 549; 217 N.R. 371; 103 O.A.C. 161, refd to. [para. 140].

Ryan v. Moore et al., [2005] 2 S.C.R. 53; 334 N.R. 355; 247 Nfld. & P.E.I.R. 286; 735 A.P.R. 286; 2005 SCC 38, refd to. [para. 141].

Snow v. Kashyap (1995), 125 Nfld. & P.E.I.R. 182; 389 A.P.R. 182 (Nfld. C.A.), refd to. [para. 141].

Caglar v. Moore et al., [2005] O.T.C. 935; 143 A.C.W.S.(3d) 754 (Sup. Ct.), refd to. [para. 142].

Michaels et al. v. Red Deer College, [1976] 2 S.C.R. 324; 5 N.R. 99, refd to. [para. 151].

British Columbia v. Canadian Forest Products Ltd., [2004] 2 S.C.R. 74; 321 N.R. 1; 198 B.C.A.C. 1; 324 W.A.C. 1; 2004 SCC 38, refd to. [para. 152].

Turczinski v. Dupont Heating & Air Conditioning Ltd. et al. (2004), 191 O.A.C. 350; 246 D.L.R.(4th) 95 (C.A.), refd to. [para. 153].

Chopra v. Canada (Attorney General) et al., [2008] 2 F.C.R. 393; 369 N.R. 207; 2007 FCA 268, refd to. [para. 154].

Whiten v. Pilot Insurance Co. et al., [2002] 1 S.C.R. 595; 283 N.R. 1; 156 O.A.C. 201; 2002 SCC 18, refd to. [para. 165].

Tschekalin v. Brunette et al., [2004] O.T.C. 589; 132 A.C.W.S.(3d) 608 (Sup. Ct.), refd to. [para. 166].

Peeters v. Canada (1993), 163 N.R. 209 (F.C.A.), refd to. [para. 166].

Blackwater et al. v. Plint et al., [2005] 3 S.C.R. 3; 339 N.R. 355; 216 B.C.A.C. 24; 356 W.A.C. 24; 2005 SCC 58, refd to. [para. 166].

Counsel:

Andrew Brodkin, Daniel G. Cohen, Ben Hackett and Michael Wilson, for the plaintiff;

Gina Scarcella, Julie De Marco and Lars Brusven, for the defendant.

Solicitors of Record:

Goodmans LLP, Toronto, Ontario, for the plaintiff;

William F. Pentney, Deputy Attorney General of Canada, Toronto, Ontario, for the defendant.

This matter was heard in Toronto, Ontario, on October 20-24 and 27-29 and November 4, 2014, before Hughes, J., of the Federal Court, who delivered the following decision on November 18, 2014.