Case Report – Federal Court says relief from implied undertaking unnecessary and unfair

10 Apr

On March 7th the Federal Court denied a motion for relief from the implied undertaking rule to allow documents produced in one action to be used in another related action.

The Court held that the defendant (and plaintiff by counterclaim) did not meet the strict standard of “necessity” established by the Supreme Court of Canada and Lac d’Amiante du Québec Ltée and recently endorsed in Juman v. Doucette (see summary here). The Court was particularly concerned about prejudice to the opposing parties in the other action, where the trial was set to commence just over a week after the motion was heard. It said:

The impact on Servier, even though it is not a party to the Ramipril Action, must also be considered. As the Plaintiff and Defendant by Counterclaim to the Perindopril Action, it is self-evident that Servier is one of the “parties involved” (Lac d’Amiante, above at para. 77). For this motion, Apotex has selected groups of documents from the discovery process in the Ramipril Action. As a third party, Servier is unable to review the entire discovery record to determine whether there are other documents or transcript references that might assist it in responding to Ramipril Documents that would now become available in the Perindopril Action. In this, I see the potential for serious prejudice to Servier. In response, Apotex asserts that it has only “selected” entire groups of documents (for example, all of the semi-annual reports and all of the pre-Troy lab notebooks). Even accepting that this is true, I do not find this explanation to be sufficient to dissipate the potential prejudice. There may be other documents outside these defined “groups” that could assist Servier. While Servier may have tools at its disposal to overcome the potential prejudice (although none have been described), the late hour of this motion closes that possibility. Apotex has not persuaded me that Servier would not suffer any prejudice; indeed, I believe that it is more likely than not that Servier would, at best, be at a disadvantage and, at worst, be seriously prejudiced.

Further, the importance of this potential prejudice or disadvantage to Servier is heightened, in my view, by the fact that other means could have been pursued by Apotex to obtain the Ramipril Documents. Sanofi and Schering have highlighted at least five different ways — including methods explicitly spelled out in the Federal Courts Rules, S.O.R./98-106 — in which Apotex could have obtained the Ramipril Documents while still preserving the implied undertaking of confidentiality.

The Court did allow the applicant to use one set of documents that had been broadly disseminated.

Sanofi-Aventis Canada Inc. v. Apotex Inc., 2880 FC 320.

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