Discontinuance of Application Post-Hearing Results in Significant Costs Consequences
Novopharm Limited v. Minister of Health and Pfizer Canada Inc., 2010 FC 156 (Hughes J.)

February 16, 2010

Tim Gilbert, Nathaniel Lipkus, and Emily Kettel for the Applicant, Novopharm Limited (“Novopharm”)
Andrew Bernstein and Emily Kirkpatrick for the Respondent, Pfizer Canada Inc. (“Pfizer”)
David Cowie for the Respondent, the Minister of Health (the “Minister”)

This decision on costs arose out of a Patented Medicines (Notice of Compliance) proceeding, in which Novopharm wished to obtain a NOC from the Minister to distribute a generic version of a Pfizer drug. A number of amendments, both voluntary and court-ordered, were made to Novopharm’s claimed relief over the course of the proceeding. At least four case management teleconferences were held. The matter was set down for hearing several months in advance of the date set. The hearing took place on January 25 and 26, 2010, with judgment reserved. On Friday, January 29, Novopharm contacted the Court Registry to advise that it intended to file a Notice of Discontinuance, subject to a resolution as to costs with the respondents. The Discontinuance was filed on Monday, February 1. A settlement as to costs was reached with the Minister, but not with Pfizer, giving rise to this decision.

Justice Hughes began by outlining the procedural history given above. He then noted that it is the obligation of the parties and their counsel to assess the merits of a case and endeavour to arrive at a resolution, particularly when all involved are sophisticated and accustomed to litigation, and counsel are well-versed in the subject matter and the litigation process.

In this case, however, Justice Hughes was of the opinion that Novopharm “was unsure of the remedy that it was seeking, or why it was seeking such a remedy.” He stated that he had “a clear impression that a good deal of last minute adjustments were being made by Novopharm and its Counsel.” He noted that Novopharm had had ample opportunity to review the merits of its case, and should have undertaken such a review well before the hearing. He pointed out that, when a matter is discontinued after hearing, the judicial resources expended to prepare for the hearing and to begin preparing reasons are forever lost.

Justice Hughes expressed regret that the Court itself had no remedy for these lost resources, but a party “whose time has been wasted and money and resources unnecessarily spent” does have a remedy by way of costs. Pfizer, Justice Hughes stated, was a proper party to the proceeding, and nothing about its conduct disentitled it to costs or suggested a lesser remedy. Pfizer’s draft bill of costs ran close to $100,000. Justice Hughes awarded fees at the Column IV level up to and including cross-examinations, and at the high end of Column V for preparation and attendance at the hearing. He also allowed Pfizer’s claimed disbursements in the amount of $29,854.60. The final award was $63,426.78 inclusive of GST.

By: Eugene F. Derényi and Adam Kope, Stikeman Elliott LLP