Date: 19980313

Docket: A-908-97

PRESENT:      THE HONOURABLE MR. JUSTICE STONE

BETWEEN:

GLAXO WELLCOME PLC

     Appellant

     - and -

THE MINISTER OF NATIONAL REVENUE

     REASONS FOR ORDER

     (Delivered from the Bench at Ottawa, on Friday, March 13, 1998)

STONE J.A.

[1]      This is a motion pursuant to Rule 1102 that this Court receive fresh evidence in this appeal and in the related appeal in Court File No. A-909-97. By the terms of the motion, the appellant seeks to have the following fresh evidence received:

(a)      an order for the admission of evidence regarding attempts by Glaxo to conduct independent secondary audits of companies which are compulsory licensees for ranitidine hydrochloride ("RHCL"), and the results of such audits;

(b)      an order for the admission of all further evidence on the conduct and results of such audits available up to and until the hearing of the appeals in Court files A-908-97 and A-909-97;

(c)      an order for the admission of evidence on the availability of private investigation techniques to discover the identity of illegal importers of RHCL.

The relief sought in paragraph (c) was abandoned at the hearing of the motion.

[2]      The orders appealed from were made by the Trial Division on November 17, 1997. The appeals are to be heard on an urgent basis on March 25, 1998.

[3]      The first order rejected the appellant's application for judicial review of a decision dated July 11, 1997 of the Minister of National Revenue pursuant to subsection 108(1) of the Customs Act denying the appellant's request for information which would identify the names of the importers into Canada of ranitidine hydrochloride - a drug for which the appellant holds the Canadian patent - in 1995 and the first three-quarters of 1996. On the basis of statistical information that had been published by Statistics Canada, the appellant has concluded that approximately 68,000 kg of the drug were imported into Canada during the period covered by the statistics in excess of the amount which was imported by the appellant itself and which was reported to the appellant by its compulsory licencees.

[4]      The second order dismissed the appellant's application for discovery of the Minister for the purpose of obtaining the same information. That application was founded on the Court's equitable jurisdiction to grant relief by way of a bill of discovery and on case law from other Canadian jurisdictions and from England.

[5]      In his reasons for the second order, the learned Motions Judge stated, at page 2:

There are other procedural alternatives. The applicant has discovered one possible infringer...without the aid of the Minister. The applicant could have hired private investigators as it has in the past, albeit with unsatisfactory results. It has the right under its compulsory licence to require a second audit of its licensees... . Again this step has been taken by the applicant in the past. There is an admission by one of the applicant's licensees that, in the third quarter of 1996, its sales were understated by almost 3,000 kilograms and yet the applicant did not pursue a further audit.

[6]      Rule 1102 provides as follows:

Rule 1102. (1) The Court of Appeal may, in its discretion, on special grounds, receive evidence or further evidence upon any question of fact, such evidence to be taken by oral examination in court, or by deposition, as the Court may direct.

(2) In lieu of the Court receiving evidence or further evidence under paragraph (1), it may direct a reference under Rule 500 as though that Rule and Rules 501 to 507 were incorporated in this Part as far as applicable.

[7]      The rule confers a discretion on this Court to receive fresh evidence provided "special grounds" are made out. The basis on which the discretion is normally exercised is well established in the case law. Thus in Frank Brunckhorst Co. et al. v. Gainers Inc. et al. [1993] F.C.J. No. 874, MacGuigan J.A. stated:

The jurisprudence under rule 1102 establishes that, for the admission of new evidence, the court should be satisfied that the evidence (1) must not have been discoverable before the end of the hearing appealed from by reasonable diligence, (2) must be credible, and (3) must be practically conclusive of an issue on the appeal.

See also Smith & Nephew Inc. v. Glen Oak Inc. (1996), 192 N.R. 271. This Court has also held that the intention of Rule 1102 is not to enable a party to remake its case: Goldner v. C.B.C. (1974), 1 N.R. 420, at page 421; Alberta Wheat Pool v. Canada Labour Relations Board (1992), 151 N.R. 1 at page 3; Lubrizol Corp. et al. v. Imperial Oil Ltd. et al. (1995), 191 N.R. 244.

[8]      The jurisprudence emanating from the Supreme Court of Canada under subsection 62(3)¹ of the Supreme Court Act indicates that the usual test for receiving fresh evidence on "special grounds" is not always confined to the criteria that were laid down by it in Dormunt et al. v. Untereiner et al., [1964] S.C.R. 122 - which are that the evidence was not discoverability by exercise of reasonable diligence and that it would be practically conclusive of an issue: Brown v. Gentleman, [1971] S.C.R. 501; Harper v. Harper, [1980] S.C.R. 2; Anchem Products Inc. et al. v. Workers' Compensation Board (B.C.) (1992), 192 N.R. 390. In Anchem, Sopinka J. stated, at page 392:

In special circumstances the discretion can, however, be exercised to admit evidence that does not meet these criteria: see Brown v. Gentleman, [1971] S.C.R. 501.

[9]      I am satisfied that the usual test of the discoverability of the evidence by exercise of reasonable diligence before the matters were heard in the Trial Division has not been met by the appellant. It seems to me to have been always open to that party under the terms of the compulsory licences to seek evidence by way of a second audit. That it did not do before November 17, 1997.

[10]      It remains to be considered whether the Court should exercise an overriding discretion due to the existence of "special circumstances". In this regard, it must be borne in mind that the remedy of a bill of discovery is not one, so far as I am aware, has been hitherto granted by this Court. Indeed, the Motions Judge described it as "an exceptional remedy". I agree with that description. He also stated at pages 4 and 5 that the rules of the Court "like those of Ontario and British Columbia and the other Canadian provinces, do not have provisions for pre-action discovery". At issue on the appeal, therefore, is whether a remedy by way of a bill of discovery is available in this Court.

[11]      It also appears evident that unless somehow barred, e.g. by estoppel, the appellant might seek to secure the same remedy on a further application that would be supported by the evidence it now asks this Court to receive. In my view, this might impose an undue burden on scarce judicial resources.

[12]      I have concluded that there are sufficient special circumstances present to support the granting of the relief sought. The addition of the fresh evidence would also permit a complete record on the appeals so as not to leave the Court in any doubt as to the surrounding circumstances An order will be made accordingly.

[13]      A copy of these reasons, upon filing in Court File A-909-97, shall become reasons for the order in that matter.

     "A.J. STONE"

     J.A.

__________________

¹      Subsection 62(3) reads:
         (3) The Court or a judge may, in the discretion of the Court or the judge, on special grounds and by special leave, receive further evidence on any question of fact, such evidence to be taken in the manner authorized by this Act, either by oral examination, by affidavit or by deposition, as the Court or the judge may direct.