[1996] 2 F.C. 223
T-2408-91
Merck & Co. Inc. and Merck Frosst Canada Inc. (Plaintiffs)
v.
Apotex Inc. (Defendant)
Indexed as: Merck & Co. Inc. v. Apotex Inc. (T.D.)
Trial Division, MacKay J.—Ottawa, December 6, 1995 and January 23, 1996.
Practice — Contempt of court — Motion to dismiss, stay contempt proceedings — Injunction granted in patent infringement action — Activities giving rise to contempt proceedings occurring between dates reasons for judgment pronounced and formal judgment entered and following dismissal of motion to stay judgment — (1) Characterization of proceedings as criminal, civil not helpful — That punitive not affecting nature of proceedings — Reasons, order arising in civil proceedings — Criminal contempt requiring intent, knowledge, recklessness that public disobedience tending to depreciate court’s authority — That contempt based on public aspects of offence (protection of administration of justice), not on violation of court order, not converting civil contempt into criminal — Not all offences leading to punishment on conviction by fine, imprisonment prosecuted by public prosecutors — (2) Contempt proceedings integral part of proceedings in which order made — Information obtained under Court order may be used in subsequent contempt proceedings to enforce order — (3) Information earlier provided to plaintiffs by defendant under Court order, or produced by witnesses in compliance with subpœnas duces tecum, sealed, kept confidential.
Practice — Subpœnas — Motions to quash subpœnas duces tecum — (1) Subpœna issued to officer of defendant corporation named in order to appear, show cause why should not be found in contempt, quashed — As one cited for contempt, may not be compelled to testify — (2) As show cause proceedings not defective, subpœnas attacked on that basis not quashed — (3) Employees of defendant may be compelled to testify even though bound by terms of injunction — Neither parties to action nor cited for contempt.
Barristers and Solicitors — Motion for removal of plaintiffs’ solicitors of record in contempt of court proceedings for breach of injunction in patent infringement case — Allegation counsel demonstrating vindictive attitude, not fair, impartial as required of prosecutor in criminal proceedings — Conduct complained of neither abusive of Court’s process nor otherwise tainting it.
By order dated April 27, 1995 officers of the defendant Apotex Inc., Bernard Sherman and Jack Kay, were directed to appear to show cause why they and the defendant corporation should not be condemned for contempt of court. That contempt allegation was based on breach of an injunction pronounced in reasons for judgment filed December 14, 1994 following trial of an action for infringement of the plaintiffs’ patent in regard to enalapril maleate. The activities giving rise to these proceedings were alleged to have occurred between the date those reasons were filed and December 22, 1994 when formal judgment was entered and again after January 9, 1995 following dismissal of the defendant’s motion to stay the judgment in the patent action. These motions were: (1) to dismiss or stay the contempt proceedings; (2) to preclude use by the plaintiffs of information received as a result of the Court’s order directing Apotex to keep records of its sales of enalapril maleate in the patent proceedings; (3) to restrain the plaintiffs’ solicitors from participating further in these proceedings; (4) to quash the writs of subpœna duces tecum; and (5) to seal and keep confidential the Court file.
(1) The defendant submitted that the proceedings were criminal in nature, and that it and the named accused persons were entitled to all of the protections of the criminal law process, including the right to have the alleged contempt prosecuted by the Attorney General, or an independent prosecutor. It relied upon the public aspect of contempt proceedings for activities said to interfere with the orderly administration of justice, but not contravening a Court order, as one basis for the characterization of the proceedings as criminal. The defendant also argued that the lack of any benefit to the plaintiffs from this proceeding, since no claim was made to restrain continuing breach of the Court’s order, emphasized the public and essentially criminal nature of the proceedings. The conduct of plaintiffs’ counsel, said to be inappropriate and punitive demonstrated that the purpose of these proceedings was punishment for an offence that was essentially public. (2) The defendant argued that, contrary to an implied undertaking of the party receiving information pursuant to a Court order that the information will not be used for any collateral or ulterior purpose, its use in the contempt proceedings was for a collateral purpose. (3) The defendant argued that the plaintiffs’ solicitors had demonstrated a vindictive attitude, and not the fair, impartial demeanour of a prosecutor seeking to bring forward evidence of wrongdoing in proceedings that are essentially criminal. The conduct giving rise to the defendant’s motions included the initiation concurrently of applications for a show cause hearing for contempt and for an order for punitive or exemplary damages in the reference on damages, and the pursuit of the motion for a show cause hearing after the decision of the Court of Appeal virtually eliminated the basis for any claim for violation of the plaintiffs’ patent rights.
Held, the motions should be dismissed, except that the subpœna issued to Jack Kay should be quashed, and directions were ordered in relation to sealing information provided in response to subpœnas duces tecum and in relation to information provided to Merck under Court order.
(1) The proceedings directing a show cause hearing should not be dismissed or stayed. It did not assist the resolution of this matter to characterize the proceedings as either criminal or civil. Any contempt of court, even a civil contempt, involves some aspects of public law, in that every violation of a court order tends to bring the administration of justice into disrepute. The disposition when contempt is found, even in cases clearly of civil contempt, i.e. imprisonment or a fine, is inevitably in the nature of punishment rather than a remedy to redress harm done to another party. Here the reasons for judgment and the subsequent order arose in ordinary civil proceedings relating to protection of patent rights claimed. This matter should not be considered one of criminal contempt in the absence of evidence that the activities said to constitute contempt demonstrate defiance of the Court “in a public way … with intent, knowledge or recklessness as to the fact that the public disobedience will tend to depreciate the authority of the court”. The mere fact that the activities complained of occurred before the Court’s order was filed, but after reasons for its judgment were filed, so that the contempt was based upon the public aspects of the offence and not on violation of a court order, did not, in itself, convert civil contempt into criminal contempt. Proceedings that are concerned initially with maintaining respect for the administration of justice, are not criminal proceedings in the sense that they should be referred to the Attorney General or an independent prosecutor. Not all offences which may lead to punishment upon conviction by a fine or imprisonment are prosecuted by public prosecutors. Even the Criminal Code does not preclude the possibility, in certain circumstances, of prosecution by private persons.
(2) Contempt proceedings to enforce the terms of a court’s order, including the imposition of punishment for its breach, are an integral part of the proceedings in which the order was made. Where information is obtained by reason of a regular court order it may be used in subsequent contempt proceedings concerned with enforcement of the court’s order or judgment. The information obtained by Merck as a result of the Court’s order was received on an implied undertaking that it be used only for purposes of the patent action, but which included contempt proceedings for alleged violation of the Court’s pronouncement by reasons and of its judgment. The use of the information in these proceedings is not for a collateral or ulterior purpose, in terms of the implied undertaking.
(3) The plaintiffs’ solicitors ought not be restrained from further participation in the contempt proceedings. The conduct complained of was neither abusive of the Court’s process nor did it otherwise taint it.
(4) The motion to quash subpœnas should be allowed in relation to Jack Kay. As one cited for contempt he could not be compelled to testify.
The motion to quash subpœnas served on two officers of a corporation doing business with Apotex was not based on defects in the subpœnas themselves, but on the view that the show cause proceedings were defective. Since that view was not accepted, there was no ground for quashing the subpœnas issued to these individuals.
The motions to quash subpœnas duces tecum served on employees of Apotex should be dismissed. They may be compelled to testify, though as employees they would be bound by the terms of the injunction included in the judgment of December 22, 1994 which bound the “Defendant, by its officers, directors, servants, agents or employees”. They were not parties to the action in which the injunction order issued and they were not cited to appear and show cause for any alleged contempt. Witnesses would not be obliged to produce documents of any day which does not fall within December 14 to 22, 1994 and January 9, 1995.
(5) Information provided to Merck under the Court order or produced by witnesses in compliance with the subpœnas duces tecum would be sealed and treated as confidential. Any other information sought to be adduced from the Court file that is subject to a prior confidentiality order should continue to be treated in confidence.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Canadian Bill of Rights, R.S.C., 1985, Appendix III, s. 1(a).
Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44], s. 7.
Code of Civil Procedure, R.S.Q., c. C-25, art. 50.
Criminal Code, R.S.C., 1985, c. C-46.
Federal Court Act, R.S.C., 1985, c. F-7, s. 50(1).
Federal Court Rules, C.R.C., c. 663, R. 355.
CASES JUDICIALLY CONSIDERED
APPLIED:
Canada v. ICHI Canada Ltd., [1992] 1 F.C. 571(T.D.); Goodman v. Rossi (1995), 24 O.R. (3d) 359; 12 C.C.E.L. (2d) 105 (C.A.); Crest Homes Plc. v. Marks, [1987] A.C. 829 (H.L.).
CONSIDERED:
Merck & Co. Inc. et al. v. Apotex Inc. (1994), 59 C.P.R. (3d) 133; 88 F.T.R. 260 (F.C.T.D.); Baxter Travenol Laboratories of Canada Ltd. et al. v. Cutter (Canada), Ltd., [1983] 2 S.C.R. 388; (1983), 2 D.L.R. (4th) 621; 1 C.I.P.R. 46; 36 C.P.C. 305; 75 C.P.R. (2d) 1; 50 N.R. 1; Merck& Co. v. Apotex Inc., [1995] 2 F.C. 723 (1995), 60 C.P.R. (3d) 356; 180 N.R. 373 (C.A.); Merck & Co. v. Apotex Inc., [1995] F.C.J. No. 1626 (T.D.) (QL); Beloit Can. Ltée/Ltd. v. Valmet Oy (1988), 18 C.I.P.R. 1; 20 C.P.R. (3d) 1; 15 F.T.R. 240; 82 N.R. 235 (F.C.A.); United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901; (1992), 89 D.L.R. (4th) 609; 71 C.C.C. (3d) 225; 135 N.R. 321; Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., [1992] 2 S.C.R. 1065; (1992), 96 D.L.R. (4th) 376; 76 C.C.C. (3d) 289; 141 N.R. 281; Iron Ore Company of Canada v. United Steel Workers of America, Local 5795, and Dwyer et al. (1979), 20 Nfld. & P.E.I.R. 27; 53 A.P.R. 27 (C.A.); Canada Post Corp. v. Canadian Union of Postal Workers (CUPW), [1991] O.J. No. 2472 (Gen. Div.) (QL); Control Data Canada Ltd. v. Senstar Corp., [1988] 3 F.C. 439(T.D.); Lubrizol Corp. v. Imperial Oil Ltd., [1991] 1 F.C. 325 (1990), 33 C.P.R. (3d) 49; 39 F.T.R. 43 (T.D.); Eli Lilly and Co. v. Interpharm Inc. (1993), 50 C.P.R. (3d) 208; 156 N.R. 234 (F.C.A.); McClure v. Backstein (1987), 17 C.P.C. (2d) 242 (Ont. S.C.); Apple Computer, Inc. v. Minitronics of Canada Ltd. (1988), 20 C.P.R. (3d) 438; 17 F.T.R. 52 (F.C.T.D.).
REFERRED TO:
Carbone v. De La Rocha (1993), 13 O.R. (3d) 355 (Gen. Div.); Home Office v Harman, [1982] 1 All ER 532 (H.L.); Orfus Realty v. D.G. Jewellery of Canada Ltd. (1995), 24 O.R. (3d) 379 (C.A.).
MOTIONS (1) to dismiss or stay contempt proceedings; (2) to preclude use by the plaintiffs of information received as a result of the Court’s order directing Apotex to keep records of its sales of enalapril maleate in the patent proceedings; (3) to restrain the plaintiffs’ solicitors from participating further in these proceedings; (4) to quash the writs of subpœna duces tecum; and (5) to seal and keep confidential the Court file. Motions dismissed, except that the subpœna issued to an officer of the defendant was quashed, and directions were ordered in relation to sealing information provided in response to subpœnas duces tecum and in relation to information provided under Court order.
COUNSEL:
G. Alexander Macklin, Q.C. and Constance Too for plaintiffs.
Harry B. Radomski, Richard Naiberg and Andrew R. Brodkin for defendant Apotex and Dr. Bernard Sherman.
Brian H. Greenspan for Dr. Bernard Sherman and Jack Kay as accused.
Donald H. Jack for Moshe Green and Harvey Organ.
Alan J. Lenczner, Q.C. for Richard Barbeau and Roger Moore.
SOLICITORS:
Gowling, Strathy & Henderson, Ottawa, for plaintiffs.
Goodman, Phillips & Vineberg, Toronto, for defendant Apotex, Dr. Bernard Sherman.
Greenspan, Humphrey, Toronto, for Dr. Bernard Sherman and Jack Kay.
McDonald & Hayden, Toronto, for Moshe Green and Harvey Organ.
Lenczner Slaght Royce Smith & Griffin for Richard Barbeau and Roger Moore.
The following are the reasons for orders rendered in English by
MacKay J.:
Preliminary motions, show cause hearing in contempt proceedings
These reasons relate to three preliminary motions filed in advance of a scheduled hearing in contempt proceedings that were ordered by my colleague, Mr. Justice Pinard, on April 27, 1995. That order, issued on motion of the plaintiffs, directed that Dr. Bernard Sherman and Jack Kay, both officers of the defendant Apotex Inc. (Apotex), appear before this Court to show cause why they, and the defendant corporation, should not be condemned for contempt of this Court. That contempt is said to be based on breach of an injunction pronounced by me in reasons for judgment, filed December 14, 1994 [(1994), 59 C.P.R. (3d) 133 (F.C.T.D.)], following trial of a patent action for alleged infringement of the plaintiff’s patent (Canadian patent no. 1,275,349) in regard to enalapril maleate. The actions giving rise to these proceedings are alleged to have occurred between the date those reasons were filed and December 22, 1994, when formal judgment was entered, and again, after January 9, 1995, following dismissal on that day of the defendant’s motion to stay the judgment in the patent action.
The initial infringement alleged arises in circumstances similar to those where the possibility of finding contempt was upheld by the Supreme Court of Canada in Baxter Travenol Laboratories of Canada Ltd. et al. v. Cutter (Canada), Ltd., [1983] 2 S.C.R. 388.
The first two of the motions came on for hearing in Ottawa on November 30, 1995 and were then adjourned to be dealt with at the first day scheduled for the show cause hearing, December 6, 1995. I determined in advance that day would be devoted to preliminary matters and that the individual parties and subpœnaed witnesses should be advised not to attend on the first day scheduled for the hearing.
Upon the scheduled date for commencement of the contempt proceedings the three preliminary motions before the Court were as follows:
1. A motion on behalf of all three parties ordered to attend and show cause, that is, the defendant Apotex and Messrs. Bernard Sherman and Jack Kay, is brought for an order dismissing the proceedings against all three moving parties. In the alternative, an order pursuant to s-s. 50(1) of the Federal Court Act, R.S.C. 1985, c. F-7 as amended, is sought to permanently stay the contempt proceedings, or in the further alternative, an order is sought setting aside the Order of Mr. Justice Pinard, dated April 27, 1995.
2. A motion on behalf of the defendant Apotex and Mr. Jack Kay is brought for the following relief
i) an order quashing writs of subpœna duces tecum (“subpœnas”) dated November 1995 issued and addressed to Messrs. Moshe Green, Harvey Organ, Jack Kay, Richard Barbeau, and Roger Moore directing the attendance of each of these individuals and production by them of certain specified documents at the show cause hearing in the contempt proceedings;
ii) an order disqualifying and restraining the solicitors of record for the plaintiffs in the contempt proceedings from continuing to act as the plaintiffs’ solicitors in these proceedings and removing them as solicitors of record therein, or alternatively, restraining those solicitors from making any further “improper use” in the contempt proceedings or otherwise of any of the documentation or information obtained in the course of their representation of the plaintiffs in the patent action;
iii) an order restraining the plaintiffs from making any further “improper use” in the contempt proceeding or otherwise of any documentation or information received in the context of the patent action; and
iv) an order that the Court file on all material contained therein in connection with this motion be sealed and kept strictly confidential.
3. A motion on behalf of Richard Barbeau and Roger Moore, employees of the defendant Apotex, for an order quashing writs of subpœna duces tecum (“subpœnas”) issued and addressed to them, dated November 17, 1995 which require their attendance and production by them of certain specified documents in the show cause hearing, and for an order for directions.
Counsel attending at the hearing in Ottawa on December 6, 1995 included those representing the plaintiffs Merck & Co. Inc., a United States corporation that is owner of the patent dealt with in the patent action between the parties from which these proceedings arise, and Merck Frosst Canada Inc., a Canadian corporation and exclusive licensee in Canada of Merck & Co. Inc. under the patent (both corporations are referred to for purposes of these reasons as “Merck” or “the plaintiffs”); counsel representing the defendant corporation and Dr. Bernard Sherman; counsel representing Dr. Sherman and Mr. Kay as “accused” persons in the show cause proceedings; counsel representing the subpœnaed witnesses Moshe Green and Harvey Organ, both officers of Kohlers Distributing Inc., so-called “outside witnesses” in these proceedings; and counsel representing the subpœnaed witnesses Richard Barbeau and Roger Moore, both employees of Apotex.
In view of argument on preliminary motions upon which determination was deemed essential for purposes of further proceedings, and because subpœnaed witnesses and “accused” persons are resident in Toronto, it was agreed, reluctantly by the plaintiffs, that the preliminary motions be resolved before proceeding further. Tentative dates for hearings in the week of January 29, 1996 were agreed upon and subsequently confirmed for commencement on January 30, assuming the show cause hearing proceeds as now scheduled.
Orders now go dismissing the motions for relief sought, except that the subpœna issued to Jack Kay is quashed, and directions are ordered in relation to sealing information provided in response to subpœnas duces tecum and in relation to information from Apotex’ own records, earlier provided to Merck under order of the Court. These reasons relate to the orders now issued.
The Background
Proceedings between the plaintiffs and Apotex in regard to Merck’s patent concerning enalapril maleate commenced in September 1991 when Merck filed its statement of claim in the patent action. Proceedings have been numerous and I here refer, summarily, only to those principal phases that have relevance for the contempt proceedings now before the Court.
Prior to trial of the action, on November 4, 1993, Merck’s application for an interlocutory injunction to preclude manufacture and sale by Apotex of its enalapril maleate product was dismissed, but Apotex was then ordered to maintain and provide to Merck accounts of receipts, production, sales and shipments of its product pending disposition of the action. Trial of the action was completed in April 1994 and on December 14, 1994 reasons for judgment were filed, allowing the plaintiffs’ action and acknowledging their entitlement to much of the relief they sought, including, as the reasons indicated, a declaration that certain claims of the patent in suit had been infringed, and [at page 185] “a permanent injunction restraining the defendant [Apotex] by its officers, directors, servants, agents, employees or otherwise from infringing” the Merck patent. Formal judgment was not filed until consultation on its terms with counsel for the parties. After hearing counsel on appropriate terms to implement the conclusions and the relief set out in the reasons, judgment was filed on December 22, 1995. That judgment was stayed by my order of December 23, 1995 pending further opportunity for the defendant to be heard in regard to a motion to stay the judgment and upon further hearing, by order of January 9, 1995, the interim stay was withdrawn and the judgment filed December 22, 1994 came fully into effect.
Thereafter, Apotex’ appeal of the judgment was allowed in substantial part by order of the Court of Appeal dated April 19, 1995 [[1995] 2 F.C. 723(C.A.)] and subsequently that Court’s judgment was amended, by order of May 16, 1995. Both parties sought leave to appeal that judgment but leave was denied to both parties by the Supreme Court of Canada on December 7, 1995.
In April 1995 the plaintiffs filed two motions. The first, for an order directing the defendant corporation and Messrs. Sherman and Kay to show cause why they should not be found in contempt of this Court was heard by Mr. Justice Pinard and by order granted on April 27, 1995 that application was allowed and it gives rise to these proceedings. That order was appealed to the Court of Appeal which, on July 6, 1995 quashed the appeal on the ground it had not been brought within the time limited for an appeal. The second application, for punitive or exemplary damages, was not brought on for hearing before a motion by the defendant was heard for an order pursuant to subsection 50(1) of the Federal Court Act [R.S.C., 1985, c. F-7] to permanently stay the contempt proceedings, or to stay the motion for punitive or exemplary damages, permanently or until the contempt proceedings are determined. My colleague, Mr. Justice Rothstein, on August 1, 1995 ordered that the motion for punitive damages be stayed until the contempt proceeding (which was not stayed) was determined. Thereafter, the defendant applied for an extension of time to appeal the show cause order of April 27, 1995 of Pinard J., an application dismissed by my colleague, Mr. Justice Richard, on October 13, 1995. Meanwhile, by order of the Associate Chief Justice, the show cause hearing in the contempt proceedings was set down for hearing for up to five days, commencing December 6, 1995.
Brief reference was made to an order of November 4, 1993 directing Apotex to maintain and provide to Merck accounts of sales and shipments of its product pending disposition of the patent action. That motion became the subject of cross-motions by the parties in the fall of 1995 which motions I heard on October 26, 1995 and disposed of by orders and reasons on December 5, 1995 [[1995] F.C.J. No. 1626 (T.D.) (QL)], which defined the respects in which the order of November 4, 1993 continued in effect. That determination was referred to in passing by counsel for Apotex in relation to the motion to restrict the use by Merck in the contempt proceedings of information received by it as a result of the order of November 4, 1993.
I propose to deal with the motions in the following order: the general motion to dismiss the proceedings; then the motions to preclude use by the plaintiffs of information received as a result of the Court’s order in patent proceedings; then the related relief to restrain the solicitors of the plaintiffs from any further part in these proceedings; then the motion to quash the writs of subpœna duces tecum issued to Messrs. Jack Kay, Moshe Green, Harvey Organ, Richard Barbeau and Roger Moore; and finally, a motion that the Court file in this matter be sealed and kept strictly confidential.
The motion to dismiss or to stay the contempt proceedings
The motion to dismiss the contempt proceedings, or to permanently stay them under subsection 50(1) of the Federal Court Act, or to set aside the order of Pinard J., made on behalf of the parties “accused”, that is, the defendant Apotex and Messrs. Sherman and Kay, is supported by counsel representing Apotex and Mr. Sherman, counsel representing the “accused” Messrs. Sherman and Kay, and counsel representing the outside witnesses Messrs. Green and Organ, and counsel representing Messrs. Barbeau and Moore.
The order directing the show cause hearing in these proceedings was issued April 27, 1995 pursuant to Rule 355 of the Federal Court Rules [C.R.C., c. 663]. In so far as the Rules are here relevant they provide as follows:
Rule 355. (1) Anyone is guilty of contempt of court who disobeys any process or order of the Court or a judge thereof, or who acts in such a way as to interfere with the orderly administration of justice, or to impair the authority or dignity of the Court. …
(2) Except where otherwise provided, anyone who is guilty of contempt of court is liable to a fine, which in the case of an individual shall not exceed $5,000, or to imprisonment for a period not exceeding one year. Imprisonment, and in the case of a corporation a fine, for refusal to obey any process or order may be repeatedly inflicted until the person condemned obeys.
…
(4) No one may be condemned for contempt of court committed out of the presence of the judge, unless he has been served with a show cause order ordering him to appear before the Court, on the day and at the hour fixed to hear proof of the acts with which he is charged and to urge any grounds of defence that he may have. …
The order was issued in response to a motion of April 18, 1995 by the plaintiffs which sought an order pursuant to Rule 355 directing that Dr. Bernard Sherman and Jack Kay appear before the Court in their personal capacities and as officers of the defendant to show cause why they and the defendant, Apotex, should not be condemned for contempt of this Court: (a) for a breach of the permanent injunction and breach of an order for delivery up or destruction of compositions of the defendant’s Apo-Enalapril products, both pronounced on December 14, 1994 in reasons for judgment delivered that day, by selling and distributing those products during the period between December 14 and 22, 1994, and by aiding and abetting in distribution and sale by third parties of Apo-Enalapril tablets during the period from January 9, 1995 to date; and (b) by acting so as to “interfere with the orderly administration of justice, and impair the authority and dignity of this Court” by the activities alleged between December 14 and 22, 1994 and after January 9, 1995 to date, so as to defeat and subvert the Court’s process herein and render nugatory the permanent injunction and order for delivery up or for destruction of Apo-Enalapril tablets.
Grounds for the motion for the show cause hearing are set out, alleging certain facts. The motion was supported by affidavits, including three from solicitors in the firm of counsel for the plaintiffs. The order granted the motion in the terms sought summarized above under (a) and (b), alleging breach of the permanent injunction and the order for delivery up or destruction of infringing product pronounced in reasons for judgment on December 14, 1994, and acting to interfere with the orderly administration of justice and to impair the authority and dignity of this Court.
That order for the show cause hearing is now questioned. In my opinion, there is no basis on which I should consider the relief requested as an alternative, i.e., the setting aside of the order of Mr. Justice Pinard. He found, as his order expressly states, that the plaintiffs had made out a prima facie case warranting the direction for designated parties to appear to show cause why they should not be found in contempt. As earlier noted that order was appealed, but not within the time provided by the Rules, and the appeal was quashed. A later application for an extension of time to file notice of appeal was dismissed. There is no ground on which I would be prepared now to set aside that order.
As I understand it, the basis for the relief requested, dismissal or a stay of the proceedings as urged by all counsel appearing, except counsel for the plaintiffs, is related to the nature of these proceedings, and the activities of counsel for the plaintiffs in bringing forward their motion for a show cause hearing and in following up the order in preparation for the hearing. In essence, it is said that these proceedings are criminal in nature, and that the defendant and the named accused persons are entitled to all of the protections of the criminal law process, including, if the proceeding is to continue, the right to have the alleged contempt prosecuted by the Attorney General, or at least a prosecutor independent from counsel for the plaintiffs.
Counsel for Messrs. Sherman and Kay urges that in the circumstances of this case the proceedings are in the nature of criminal contempt. That is based largely on the circumstance that the injunction and order for delivery up, said to be breached by the accused and the defendant, were not formally pronounced until judgment was entered on December 22, 1994. Prior to that the reasons for judgment, dated December 14, 1994, provide only a basis for complaint in relation to alleged activities of the “accused” and the defendant as interfering with the orderly administration of justice and impairment of the authority and dignity of this Court. In short the only offence at that stage was a public offence, in its nature criminal. There could be no offence of breaching an order of the Court until after formal judgment was entered. Other reasons, discussed below, were also urged in support of characterizing the proceedings as criminal.
The proceedings here initiated follow the principles enunciated in Baxter v. Cutter, supra, where the Supreme Court of Canada allowed an appeal from the Court of Appeal which had sustained the Trial Court in allowing a preliminary objection on return of a show cause order in a case where the activities said to constitute contempt occurred between the filing of reasons for judgment and the entering of formal judgment. Speaking for the Court, Dickson J., as he then was, acknowledged that under the Rules of this Court judgment does not take effect until entered in the form required by the Rules so that no injunction existed until the formal order and no breach of the injunction could occur before that date.
Nevertheless, he found that clear violation of the terms of the reasons for judgment, which occurs before the filing of formal judgment, may constitute contempt of court. He said (at page 396):
The general purpose of the court’s contempt power is to ensure the smooth functioning of the judicial process. Contempt extends well beyond breach of court orders. Subsection (1) of Rule 355 of the Federal Court Rules, repeated here for ease of reference, provides in part as follows:
Rule 355. (1) Anyone is guilty of contempt of court who disobeys any process or order of the Court or a judge thereof, or who acts in such a way as to interfere with the orderly administration of justice, or to impair the authority or dignity of the Court. (Emphasis added.)
Paragraph (a) of the show cause order in the present case invoked the first part of Rule 355(1), whereas paragraph (b) invoked the underlined portions. Even if there was no actual breach of an injunction so as to constitute contempt under paragraph (a), it is still necessary to consider paragraph (b).
(I note that in the case at bar the show cause order is substantially the same as that referred to by Dickson J., which he had quoted earlier in his opinion and here refers to as paragraphs (a) and (b).) He further stated as follows (at pages 396-398):
Contempt in relation to injunctions has always been broader than actual breaches of injunctions. Cattanach J. recognized this in the present case. Thomas Maxwell is named in the show cause order as having committed contempt in his personal capacity although he is not a party to the action. He is not personally bound by the injunction and therefore could not personally be guilty of a breach. Nevertheless, Cattanach J. acknowledged he could still be found in contempt if he, with knowledge of its existence, contravened its terms. Although technically not a breach of an injunction, such an action would constitute contempt because it would tend to obstruct the course of justice: Kerr on Injunctions, 6th ed. 1927, at p. 675; Poje v. Attorney General for British Columbia, [1953] 1 S.C.R. 536.
The same kind of analysis applies to the period between reasons for decision and the pronouncement of judgment. Cutter argues, in effect, that this constitutes a period of grace in which the defendant can contravene the prohibitions set out in the reasons for decision with impunity. To accept that argument would be to accede to the proposition that it is open to a party completely to defeat an injunction. That would subvert the whole process of going to court to settle disputes. That is precisely what the contempt power is designed to prevent.
…
This is not a case in which something was prohibited in the reasons for decision but not incorporated into the formal judgment….
Although theoretically it may be possible for a judge completely to change his mind between deliverance of reasons and issuance of judgment, this is hardly likely. Reasons for decision are not meant to be tentative. The hiatus between reasons for decision and formal judgment simply provides an opportunity to settle the precise language to implement the judge’s conclusions. Once a judge has rendered his decision by giving reasons, and assuming any prohibitions contained therein are clearly worded, it is not, in my view, open to any person to flout his disposition of the case on the ground that there is no judgment yet in effect. The situation after reasons for decision is very different from a situation in which the defendant acts prior to any court determination. Once reasons for decision have been released, any action which would defeat the purpose of the anticipated injunction undermines that which has already been given judicial approval. Any such action subverts the processes of the Court and may amount to contempt of court.
I therefore conclude, as a matter of law, there could be contempt between December 11 and December 18, 1980 by reason of an interference with the orderly administration of justice and an impairment of the order or dignity of the Court (Rule 355).
The distinction by Dickson J. in the nature of the contempt, in violation of a court order and in interfering with the orderly administration of justice where no order has yet been made, underlies one of the elementary principles of contempt proceedings under subsection 355(1) of the Rules set out by Mr. Justice Pratte in Beloit Can. Ltée/Ltd. v. Valmet Oy (1988), 18 C.I.P.R. 1 (F.C.A.), at page 14. He stated as follows:
As Rule 355(1) of the Federal Court Rules makes it clear, a person may be guilty of contempt of court either by disobeying an order of the Court or by obstructing or interfering with the course of justice.
The only person who may disobey an order of a Court is the party to whom that order is addressed. However, a third party who knowingly aided and abetted a party to disobey an injunction may be found guilty of contempt, not because he breached the injunction, but, rather, because he acted in a manner that interfered with the course of justice.
The public aspect of contempt proceedings, as emphasized by Dickson J. in Baxter v. Cutter, for alleged activities interfering with the orderly administration of justice, but not contravening an order of the Court since none was made prior to December 22, 1994, is one basis here relied upon for the characterization of these proceedings as criminal in nature. It is also said that the lack of any benefit to the plaintiffs from this proceeding, since no claim is made to restrain continuing breach of the Court’s order, emphasizes the public and essentially criminal nature of these proceedings. Those factors, and activities of counsel for the plaintiffs which are here described as inappropriate and intending to be punitive, are said to demonstrate that the purpose of these proceedings is punishment of the defendant for an offence that is essentially public, and thus, these proceedings are criminal in nature.
The distinction between criminal contempt and civil contempt is referred to in numerous decisions. In United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901, the Supreme Court was concerned with an appeal by a union from convictions for criminal contempt for disobeying, in a highly publicized way, directives of a provincial labour relations board which had been filed and were enforceable as orders of the Alberta Court of Queen’s Bench. Mr. Justice Sopinka, dissenting on the question whether the orders in question could give rise to criminal contempt if disobeyed, said (at pages 943-944):
The criminal law of contempt must be distinguished from civil contempt. The purpose of criminal contempt was and is punishment for conduct calculated to bring the administration of justice by the courts into disrepute. On the other hand, the purpose of civil contempt is to secure compliance with the process of a tribunal including, but not limited to, the process of a court. [Citations omitted.]
…
Criminal contempt for conduct ex facie the court is generally initiated by the Attorney General while civil contempt proceedings are initiated by a party or person affected by the order sought to be enforced. In order to secure compliance in a proceeding for civil contempt, a court may impose a fine or other penalty which will be exacted in the absence of compliance. However, the object is always compliance and not punishment.
In the same case Madam Justice McLachlin, speaking for the majority concerning criminal contempt, said (at page 932):
What the courts have fastened on in this and other cases where criminal contempt has been found is the concept of public defiance that “transcends the limits of any dispute between particular litigants and constitutes an affront to the administration of justice as a whole”…. The gravamen of the offence is rather the open, continuous and flagrant violation of a court order without regard for the effect that may have on the respect accorded to edicts of the court.
In Vidéotron Ltée v. Industries Microlec Produits Électroniques Inc., [1992] 2 S.C.R. 1065, the Supreme Court was concerned with the issue of whether a person cited for contempt as a result of an alleged failure to comply with an injunction order may be compelled to testify. Proceedings there arose under the provisions of the Code of Civil Procedure [R.S.Q., c. C-25], article 50, which is comparable to subsection 355(1) of the Federal Court Rules. Speaking for the majority, Mr. Justice Gonthier said (at pages 1075-1076):
This definition [i.e. article 50 C.C.P.] clearly establishes the characteristics common to all types of contempt covered by the Code of Civil Procedure, characteristics which may be unduly masked by too great an insistence on the distinction between civil contempt and criminal contempt. The penalty for contempt of court, even when it is used to enforce a purely private order, still involves an element of “public law”, in a sense, because respect for the role and authority of the courts, one of the foundations of the rule of law, is always at issue.
…
… the power to punish for contempt of court is an integral part of the inherent powers of the courts … and as such it constitutes an essential element in the proper administration of justice.
This public law aspect of contempt of court is of course reflected in the sanctions which are attached to it. Any contempt of court, even a civil contempt, may result in punishment by imprisonment for one year, under art. 51 C.C.P. Contempt of court has moved somewhat out of the realm of private law and into that of public law, thereby acquiring a special place within what is essentially a code of private law like the Code of Civil Procedure. As we shall see, contempt of court is subject to very special rules in Quebec law.
In my view, it does little to assist a resolution of this matter to characterize the proceedings here as either criminal, which the defendant and those in support of its motion urge, or civil, as the plaintiffs here urge. As Mr. Justice Gonthier suggests, any contempt of court, even a civil contempt involves some aspects of public law. Every violation of a court order, the usual basis of civil contempt, tends to bring the administration of justice into disrepute. The nature of the remedy applied when contempt is found even in cases clearly of civil contempt, i.e., imprisonment or a fine, is inevitably in the nature of punishment rather than for a remedy to redress harm done to another party.
Here the reasons for judgment and the subsequent order arise in ordinary civil proceedings relating to protection of patent rights claimed. In my opinion, for this matter to be considered a matter of criminal contempt would require evidence that supported a conclusion that the alleged activities giving rise to the finding of contempt demonstrate defiance of the Court “in a public way … with intent, knowledge or recklessness as to the fact that the public disobedience will tend to depreciate the authority of the court”, in the words of McLachlin, J. in United Nurses of Alberta, supra, at page 933.
The Court has not heard evidence yet in this matter. The mere fact that the primary activities here complained of occurred before the Court’s order was filed, but after reasons for its judgment were filed, so that the contempt is based upon the public aspects of the offence and not on violation of a court order, does not, in itself, result in converting what is civil contempt into criminal contempt.
Proceedings that are here concerned initially with maintaining respect for the administration of justice, are not criminal proceedings in the sense that they should be referred to the Attorney General and those regularly concerned with public criminal prosecutions. Not all offences which may lead to punishment upon conviction by a fine or imprisonment are prosecuted by public prosecutors, acting under the ægis of the Attorney General, concerned with the administration of justice. Even the Criminal Code [R.S.C., 1985, c. C-46] does not preclude the possibility, in certain circumstances, of prosecution by private persons.
I reach my conclusion on this aspect despite able argument for the “accused” persons, Messrs. Sherman and Kay. It is urged that the solicitors for the plaintiffs, in seeking the show cause order and in preparation for the hearing have acted in ways which are not considered appropriate for one concerned with public prosecutions. I deal in greater detail with those allegations in relation to the motion that the solicitors for the plaintiffs be disqualified from further proceeding with this matter. For purposes of this motion it is sufficient to note that the moving parties urge that the proceedings be dismissed or permanently stayed, or be referred to prosecuting authorities because the conduct of solicitors for the plaintiffs is said to be inconsistent with the standards of public prosecutors.
Those allegations are interrelated with a claim, made in the grounds included in the motion to dismiss these proceedings, that safeguards normally applicable to criminal prosecutions, which should be applied in this case, include:
… the right to be prosecuted by a public prosecutor who is governed by statutory duties and whose focus and/or purpose is not to obtain a conviction per se but, rather, to lay before the Court the credible evidence relevant to the allegations of wrongdoing. The public prosecutor is governed both by obligations owed to the public as well as to the accused. In the absence of this, as well as other safeguards, the Contempt Proceeding violates the rules of fundamental justice and due process of law.
For the moving parties reference was made to two decisions concerning contempt proceedings initiated by private parties where the courts concerned comment upon the possible involvement of public prosecutors. In Iron Ore Company of Canada v. United Steel Workers of America, Local 5795, and Dwyer et al. (1979), 20 Nfld. & P.E.I.R. 27 (C.A.), upholding the trial court’s conviction for contempt, in proceedings initiated apparently by the Supreme Court itself, where there was perceived blatant public violation of that court’s order by those engaged in an illegal strike, Gushue J.A. commented [at page 45]:
… it will be noted that the proceedings were instituted by I.O.C. at the bidding of the Court. The normal procedure, and certainly the preferable one, is that such proceedings be taken by the Attorney General. Without doubt, the Court cannot allow apparent defiance of its orders to go unnoticed, and unpunished if the facts warrant such punishment. However, the Attorney General should be the prosecutor—not one of the parties to a civil proceeding whose only concern is to enforce its civil rights and, in a matter such as this one, to resolve the problem as quickly and as smoothly as possible. Such quick resolution can only be made more difficult if one party appears to have instigated a process which could result in some or all of the other parties being deprived of their liberty—even if only for a short while.
In Canada Post Corp. v. Canadian Union of Postal Workers (CUPW), [1991] O.J. No. 2472 (Gen. Div.) (QL), in his decision dealing with a preliminary motion in regard to contempt proceedings for alleged violation of the Court’s orders limiting picketing in a strike situation, Farley J. reviewed the circumstances, including the need for investigation of the facts alleged, and then said [at pages 39-40]:
The court must request in these circumstances that the Attorney General become involved so as to maintain the integrity of the judicial system in a matter of such public importance. …
For the reasons given by Gushue J.A.B. in Iron Ore supra it would be inappropriate although legal to have the plaintiff in this case proceed at this stage. It is preferable for the Attorney General to do so, and I so request that this be done.
No other examples were cited of possible reference to the Attorney General of prosecution of contempt proceedings, except where the initial decision to proceed is made by public prosecutors as a matter of public import in situations clearly acknowledged as cases of criminal contempt, for public flouting of the court’s orders.
I am not persuaded that the proceedings now initiated before the Court demand special arrangements for their prosecution, aside from those already established by jurisprudence of this Court in relation to contempt proceedings under Rule 355, and applicable principles under the Charter [Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act, 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44]] or the Canadian Bill of Rights [R.S.C., 1985, Appendix III]. It is the responsibility of the Court to ensure that in the proceedings, rules of fundamental justice and due process of law are followed. Those are not compromised, in my opinion, by any activities of counsel for the plaintiffs in moving for the show cause hearing or in preparations for this hearing. The concerns of the defendant, the “accused persons”, and witnesses subpœnaed and appearing can be dealt with as they arise, and if the hearing court errs in any meaningful way, that can be set aright through the regular process of appeals.
I note that in written grounds set out in support of the motion to dismiss the proceedings it is urged that Rule 355 of the Rules violates section 7 of the Canadian Charter of Rights and Freedoms and paragraph 1(a) of the Canadian Bill of Rights in that “it allows for a private prosecution of an offence which may lead to a loss of liberty while by-passing certain safeguards normally applicable to criminal prosecutions”. That argument was not pursued when the motion was before me and indeed counsel for Apotex and Dr. Sherman indicated that after consideration the question of the validity of Rule 355 was not being argued. That issue is not here dealt with.
For the reasons here set out, I am not persuaded that this Court should dismiss the proceedings commenced by reason of the order of April 27, 1995 directing a show cause hearing. Nor am I persuaded that these proceedings should be stayed pursuant to subsection 50(1) of the Federal Court Act, either permanently, or pending referral of this matter to prosecutors acting under the aegis of the Attorney General responsible for the administration of justice, or other independent prosecutor, as proposed by the movers of the motion. Thus, the application to dismiss or to stay the proceedings or to set aside the order of April 27, is dismissed.
Motions to preclude use by plaintiffs of information obtained as a result of a court order in patent proceedings.
The motion on behalf of Apotex and Jack Kay seeks, inter alia, orders directed, first to solicitors for the plaintiffs, if they are not disqualified by this Court from continuing to act as solicitors “prosecuting” the contempt proceedings, and second to Merck, to restrain “any improper use”, in these proceedings or otherwise, of documentation or information received in the context of the patent action.
Of particular concern is use of information obtained as a result of Apotex’ efforts to comply with the order of November 4, 1993, directing it to maintain accounts of enalapril maleate receipts, production, sales and shipments, and to provide information regularly to Merck, until further order of the Court. Information provided in accord with that order is relied upon as the basis of allegations of failure by Apotex and others cited for contempt to respect and comply with the terms of reasons for judgment issued December 14, 1994, and their failure to comply with the judgment in the patent action after January 9, 1995. It also provides the basis for description of information which prospective witnesses, served with subpœnas duces tecum, are directed to bring with them to Court when called to testify in the contempt proceedings.
I should note that in its terms the motion would apply to all information derived by Merck in the course of the patent action, but much of the argument addressed to the motion and discussed here concerns information received under the order of November 4, 1993.
In support of the motion it is urged that documents or information provided as directed by court order are subject to an implied undertaking of the party receiving the information that it will not be used for any collateral or ulterior purpose. Its use in the contempt proceedings in this case is said to be for a collateral purpose and the Court is urged to enjoin such use. The principle or rule concerning an implied undertaking has most often been discussed in relation to documents and information produced in discovery under Court Rules. The background and the basis of the rule is discussed by my colleague Madam Justice Reed in Canada v. ICHI Canada Ltd., [1992] 1 F.C. 571(T.D.) and by Associate Chief Justice Morden in Goodman v. Rossi (1995), 24 O.R. (3d) 359 (C.A.). The principle has been recognized by Giles A.S.P. in this Court in Control Data Canada Ltd. v. Senstar Corp., [1988] 3 F.C. 439(T.D.) in declining an application to release to foreign counsel information produced under a confidentiality order and information produced in discovery, and again in Lubrizol Corp. v. Imperial Oil Ltd., [1991] 1 F.C. 325(T.D.) in refusing an application to authorize named foreign counsel to parent corporations to have access to documents produced under a protective order.
In Canada v. ICHI, supra, Madam Justice Reed said inter alia, (at page 580):
An order will therefore issue requiring the plaintiff to produce a representative for discovery. The defendant will know from the text of these reasons that an implied undertaking automatically arises so that information obtained on discovery is to be used only for the purposes of the litigation for which it is obtained. This does not, of course, restrict the use of any information which subsequently is made part of the public record. Nor does it affect the use of information which while obtained on discovery may also have been obtained from some other source. An implied undertaking cannot operate to pull under its umbrella documents and information obtained from sources outside the discovery process merely because they were also obtained on discovery. In addition, the implied undertaking does not prevent a party from applying, in the context of collateral litigation, for release from the implied undertaking, so that information obtained on discovery might be used in that litigation. This, however, is a matter to be determined in the context of that proceeding and not in this proceeding.
Subsequently, that reasoning was adopted in Eli Lilly and Co. v. Interpharm Inc. (1993), 50 C.P.R. (3d) 208 (F.C.A.), at page 213, by Mr. Justice McDonald, for the majority, in upholding Reed J.’s order granting leave to use in proceeding B, information obtained in proceeding A, which information was originally subject to a protective order but was later filed in proceeding A by counsel in a written memorandum of fact and law as part of the public record.
It is suggested by plaintiffs that no implied undertaking arises in this case since the information in question was provided, not in discovery, but by court order. I am not persuaded this is so. The passage from the judgment of Reed J. in Canada v. ICHI, quoted above, does relate the rule of an implied undertaking to information provided in discovery, but there discovery was to be of a representative ordered by the Court to be produced for examination. Morden A.C.J.O in Goodman v. Rossi, after review of the history of recognition of the implied undertaking, based originally in relation to discovery ordered by the Court, commented (at page 370):
… I do not think that the absence of an order in our practice stands in the way of recognizing the implied undertaking. The compulsion to disclose and produce imposed by the rule of court is virtually identical to that imposed by an order of the court.
In my opinion, if an undertaking is implied in regard to information produced in discovery, as is now recognized, the same may surely be said of information received by one party from another under compulsion of the court’s order. The implied undertaking may be enforced by a court order to restrain release of information in collateral proceedings or activities (Carbone v. De La Rocha (1993), 13 O.R. (3d) 355 (Gen. Div.)). The breach of the implied undertaking may constitute contempt of court (Home Office v Harman, [1982] 1 All ER 532 (H.L.)).
The limits of that undertaking are that the information not be used for a collateral or ulterior purpose. That means for any purpose other than those concerned with the proceedings in which the information is produced (Orfus Realty v. D.G. Jewellery of Canada Ltd. (1995), 24 O.R. (3d) 379 (C.A.), at page 382).
In reasons for order dated December 5, 1995 in relation to counter motions by Merck and Apotex in regard to the order of November 4, 1993, under which the information here in question was received, I commented on the purposes of that order, particularly for ensuring availability of records for assessment of damages or profits, and I noted there that the parties differed about whether the information may be used in the course of these contempt proceedings, a matter to be determined in these proceedings.
It is the view of Apotex and others that the contempt proceedings are collateral or ulterior to the purposes for which the information was ordered to be provided, and that these proceedings are distinct and different from, not the same or a part of, the overall proceedings in the patent action. Thus, it is said the contempt proceedings start by a different process; that they may, and here do, involve different parties, not merely the plaintiff and defendant corporations which are parties in the patent action; that the purposes are different, with punishment, not compensation or protection of rights, the objective; and with different principles of law applicable to the proceedings than applied in the patent action.
In my opinion, contempt proceedings to enforce the terms of a court’s order, including the imposition of punishment for its breach, are an integral part of the proceedings in which the order was made. It has long been an essential aspect of the Court’s process that proceedings in the nature of contempt, for violation of the court’s orders, exist, separate and apart from any proceedings under the Criminal Code or recognized common law criminal contempt.
In McClure v. Backstein (1987), 17 C.P.C. (2d) 242 (Ont. S.C.), Mr. Justice Steele held that evidence of a debtor given on an examination in aid of execution might be considered by the Court in contempt proceedings, even though the debtor cannot be compelled to testify in those proceedings. The contempt proceedings were not separate from but were an integral part of the entire civil action from its commencement to judgment and to enforcement of that judgment. The prior evidence was not in a prior proceeding but in the same proceeding. Admittedly those proceedings were of a different nature than contempt proceedings, here underway, but the essence of the matter before the Court there, as here, concerned the enforcement of the Court’s own order or directions.
In Apple Computer, Inc. v. Minitronics of Canada Ltd. (1988), 20 C.P.R. (3d) 438 (F.C.T.D.), Mr. Justice Strayer, as he then was, admitted documents sought originally under an Anton Piller order but not then acquired because they had already been taken into custody by customs officers and which were later provided under order of another court pursuant to the Criminal Code. Arguments that the documents were not admissible were rejected and they were relied upon in the contempt proceedings. Implicitly, had the documents been seized under the Anton Piller order they would also have been admissible in contempt proceedings for alleged violation of an injunction order.
In Crest Homes Plc. v. Marks, [1987] A.C. 829 (H.L.), the House of Lords upheld the use of information, obtained as a result of an Anton Piller order in later proceedings, in contempt proceedings arising in an earlier matter concerned with the same issues and parties. Speaking for the law Lords, Lord Oliver of Aylmerton said, at page 860:
The proper policing and enforcement or observance of orders made and undertakings given to the court in an action are, in my judgment, as much an integral part of the action as any other step taken by a plaintiff in the proper prosecution of his claim. The normal procedure where the contempt complained of is that of a party to the action is to apply for committal by motion in that action as an incidental step in the action. There is, in my judgment, nothing “collateral” or “alien” about enforcement of the court’s order in the action in which discovery is obtained and I do not entertain any doubt at all that documents disclosed on discovery in the action can perfectly properly be used for the purpose of taking such a step without in any way infringing the implied undertaking and without the necessity of obtaining the prior leave of the court.
Although the facts in Crest Homes Plc. are somewhat unusual, those comments, in my view, are applicable here. Where the information is obtained by reason of a regular court order it may be used in subsequent contempt proceedings concerned with enforcement of the court’s order or judgment.
In my opinion, the information obtained by Merck’s counsel and by Merck as a result of the order of November 4, 1993, was received on an implied undertaking that it be used only for purposes of the patent action, but those purposes include contempt proceedings for alleged violation of the Court’s pronouncement by reasons and of its judgment. The contempt proceedings are an integral part of the Court’s process arising in trial of the patent action, from its commencement to its conclusion including judgment and its enforcement. Those proceedings are not separate or distinct from the patent action and they are within the scope of the implied undertaking. The use of the information in these proceedings is not for a collateral or ulterior purpose, in terms of the implied undertaking.
In light of these considerations, the order now issued in response to the application of Apotex and Jack Kay includes an order dismissing the request for an order precluding use of information received, by solicitors for Merck or by the plaintiffs, in the context of the patent action whether under court order or otherwise. That is, of course, without prejudice to any orders the Court may hereafter make in regard to use of specific information or documents received in the context of the patent action.
The motion to disqualify or restrain plaintiffs’ solicitors from further participation in contempt proceedings
This relief is sought essentially because, it is argued, solicitors for the plaintiffs have demonstrated a vindictive attitude and not the fair, impartial demeanour proper for a prosecutor seeking to bring forward evidence of wrongdoing in proceedings that, it is argued, are essentially criminal. I have indicated I am not persuaded that these proceedings are to be dismissed, stayed permanently or even temporarily to permit the Court to refer the matter of prosecution of the alleged contempt to those responsible for public prosecutions generally.
I add now that the suggestions of impropriety on the part of counsel for the plaintiffs, though numerous, do not lead to a determination that the solicitors of record should now be removed from further participation in the contempt proceedings. I summarize the complaints put forward on behalf of Messrs. Sherman and Kay and supported by counsel for all others except the plaintiffs. I do so because, in essence, the argument advanced is that the actions complained of so taint the proceedings that they should now be dismissed or at the very least if the proceedings are to continue the Court should order referral of the prosecution of the matter to public prosecutors acting under the authority of the Attorney General.
The actions now complained of are presented from a perspective which considers the proceedings as essentially criminal in nature. While I have not accepted the characterization of these proceedings as within criminal contempt, as that term has been recognized in the jurisprudence, there are aspects of the proceedings which are comparable to aspects of criminal proceedings, in part because of applicable provisions of the Charter. Those aspects warrant review and assessment of the complaints raised about conduct of the plaintiffs’ solicitors, which were characterized from the criminal law perspective as prosecutorial misconduct and abusive of the process of the Court because they were inconsistent with a prosecutor’s responsibility not to be adversarial, but to fairly advance evidence upon which the Court may determine whether there has been a breach of its judgment.
The conduct giving rise to complaint here was said to include the following:
1) The initiation, concurrently by motions filed the same day by plaintiffs, of applications for a show cause hearing for contempt and for ordering punitive or exemplary damages, in the reference on damages to be scheduled in this matter;
2) The filing of three affidavits from members of the firm of solicitors representing the plaintiffs, in support of the motion for a show cause hearing;
3) The pursuit of the motion for a show cause hearing after the decision of the Court of Appeal on April 19, 1995 which decision virtually eliminated the basis for any claim for alleged violation of the plaintiffs’ patent interests, except with reference to designated lots of bulk product received by Apotex after grant of the Merck patent, leaving the only real basis for these proceedings as criminal, seeking punishment;
4) The application to cite not only the defendant Apotex, but also Messrs. Sherman and Kay, in relation to activities alleged between December 14 and 22, 1994 when it was clear that there was no judgment and no permanent injunction in effect;
5) The application by the plaintiffs dated June 7, 1995 and dismissed by Noël J. on June 12, 1995, seeking, inter alia, an order directing conditions for oral testimony and for disclosure, by those cited to show cause in advance of the hearing, of information concerning witnesses, anticipated testimony and documents and orders as to admissibility of materials including transcripts, documents and records received in the course of the earlier patent action;
6) The proposal of plaintiffs, by correspondence, in November 1995 that the status of Mr. Kay, cited for contempt, be changed and he no longer be required to appear and show cause;
7) The subsequent issue on November 19, 1995 of a subpœna duces tecum to Mr. Kay, who is still cited by the order of April 27, 1995, to appear and show cause why he should not be found in contempt of this Court;
8) The issue of subpœnas duces tecum on November 19, 1995 to Messrs. Barbeau and Moore, employees of the defendant Apotex, and to two members of a corporation doing business with Apotex, Messrs. Green and Organ, without providing to the accused parties, apparently until late on the day before the hearing, any indication of evidence anticipated from these witnesses;
9) The apparent effort of the plaintiffs’ solicitors to proceed with the motion for exemplary damages in the reference as to damages in advance of, or simultaneously with, the contempt proceedings, a matter resolved by the order of August 1, 1995 staying proceedings on the motion for the reference, including any claim to punitive damages until the contempt proceedings are determined;
10) The continuing role of the senior solicitor of the plaintiffs despite his direct and personal involvement in correspondence and telephone calls of December 15 and 16, 1994 which may be of significance in evidence in this matter;
11) The use by solicitors of information received under the Court order of November 4, 1993, subject to an implied undertaking not to use it for a collateral purpose, for purposes of these contempt proceedings. (This matter I have already dealt with in some detail.)
All of these activities are illustrative of the different views of counsel for the parties in relation to the nature of the proceedings now underway and the implications of that for the role and conduct of counsel. For the moving parties it is urged that the solicitors for plaintiffs, in the preparations for these proceedings, abused the role of impartiality required of any prosecutor in criminal or quasi-criminal proceedings.
I am not persuaded that the conduct complained of can be characterized as abusive of the Court’s process or as otherwise tainting the process so as to warrant dismissal or a stay of further proceedings, or of an order to disqualify and restrain plaintiffs’ solicitors from continuing to act in these proceedings.
The rights of “accused” persons here cited for contempt have not yet been violated by any proceedings yet underway. It will be the duty of the Court to ensure those are appropriately recognized and protected as these proceedings may carry on. What either counsel may propose in preparing for the hearing or may seek from the Court in relation to the hearing does not in itself characterize the hearing. Counsel will, no doubt, seek to fully protect the interests of their clients in any proceedings. For all counsel, representing the plaintiffs, as well as the defendant, those cited to show cause, or others involved, there is a responsibility to assist the Court in ensuring that justice is done, and to maintain professional independence and a measure of necessary impartiality in accord with the law, in any hearing in this matter.
I conclude that there is no basis whatsoever on which the Court should consider disqualifying or enjoining the solicitors for the plaintiffs from participating on behalf of the plaintiffs in further proceedings under the order of April 27, 1995. The order now issued includes dismissal of that request for relief.
Motions to quash subpœnas
There are two motions before the Court to quash subpœnas duces tecum issued to various individuals, one by Apotex and Jack Kay seeking an order quashing all subpœnas issued, to Messrs. Kay, Green and Organ, and to Messrs. Barbeau and Moore, the second on behalf of Messrs. Barbeau and Moore. I deal with these by reference to the individuals concerned.
The motion to quash subpœnas is to be allowed in relation to Mr. Jack Kay. An officer of Apotex, he is named in the order of April 27, 1995, as one required to appear and show cause why he should not be found to be in contempt. That order has not been varied. As one cited for contempt he may not be compelled to testify (Vidéotron, supra), and the subpœna issued to him is quashed by order now issued.
The plaintiffs may decide not to proceed to have Mr. Kay found in contempt, a matter the Court leaves to be decided. Nevertheless, he may not be compelled to testify at this stage, so long as he is included in the order of April 27, 1995, under which these proceedings are organized, as one required to appear and show cause.
The motion to quash subpœnas served on Messrs. Green and Organ is not based on alleged defects in the subpœnas themselves. Rather, it is based on the view, which I have not accepted, that the show cause proceedings are defective, for reasons already discussed, and ought to be dismissed. Since I decline to so order, there is no ground for quashing the subpœnas issued to these individuals. They are officers and representatives of a company that distributes drug products and which provides services to Apotex, and apparently also to Merck, under contract. I fully appreciate their desire not to be caught in the middle of the dispute between the parties. Nevertheless, if they have evidence that is relevant to the purposes of the show cause hearing, they may be called to testify. Any records they may produce, if called, shall be subject to the confidentiality order herein dealt with, or to further order, upon motion.
The motions to quash subpœnas duces tecum served on Messrs. Barbeau and Moore are dismissed. They may be compelled to testify, though they are employees of Apotex and as employees would be bound technically by the terms of the injunction included in the judgment of December 22, 1994 which binds the “Defendant, by its officers, directors, servants, agents or employees”. They were not parties to that action in which the injunction order issued, and they are not cited to appear and show cause for any alleged contempt. If called to testify and so long as there are outstanding subpœnas in their names, they may not be cited as persons “accused” and directed to show cause why they should not be found in contempt of the Court. The subpœnas issued to them, by Schedule “A”, direct that they bring with them to the show cause hearing and there, before the Court:
Produce true copies of the following: (in the case of the Barbeau subpœna)
1. All records in writing, including handwritten, typewritten or printed, memoranda, facsimile messages, letters, hard copies of electronic mail messages, between Mr. Richard Barbeau or an employee of Apotex Inc., and customers of Apotex Inc. on December 14, December 15, December 16, December 28, 1994, January 4 and January 9, 1995, relating to orders for and/or sales of APO-ENALAPRIL tablets on the aforesaid days and to the Reasons for Judgment of Mr. Justice MacKay dated December 14, 1994.
2. All memoranda and written communications, facsimile messages, letters, hard copies of electronic mail messages, between Mr. Richard Barbeau or an employee of Apotex Inc. and distributors and wholesalers of APO-ENALAPRIL tablets relating to transfers of APO-ENALAPRIL tablets from such distributors and wholesalers to third party distributors, wholesalers, pharmacists and pharmacy chains during the period January 9, 1995 to April 19, 1995 inclusive.
3. All memoranda and written communications, facsimile messages, letters, hard copies of electronic mail messages, including messages between Mr. Richard Barbeau and Apotex Inc. employees and representatives under Mr. Barbeau’s direction or supervision and pharmacists and pharmacy chains in Canada relating to transfers of APO-ENALAPRIL tablets from distributors and wholesalers of APO-ENALAPRIL tablets to pharmacists and pharmacy chains, during the period January 9, 1995 to April 19, 1995 inclusive.
I note that paragraph 1, here quoted, directs production of documents of certain dates (i.e., December 28, 1994 and January 4, and January 9, 1995) which are dates other than those on which the alleged activities of the parties cited for contempt took place. In that respect I find the subpœnas issued are defective and the witnesses Barbeau and Moore are not obliged to produce documents of any day listed in paragraph 1 of the subpœna Schedule “A” which does not fall within the periods specified in the order of April 27, 1995, as December 14 to 22, 1994 and January 9, 1995.
Whether any documents so directed to be produced are admissible in evidence at the continuation of the show cause hearing I decline to rule upon until there is argument related to any specific document, the admissibility of which may be questioned in the course of the proceedings.
The motion for a confidentiality order
On behalf of Apotex and Jack Kay an order is sought that the Court file, and all material contained therein in connection with “the within motion” be sealed and kept strictly confidential.
This aspect of the motion was not addressed when the matter came on for hearing on December 6, 1995. While I am not certain, I assume the reference to “the within motion” relates not to this motion before the Court, but rather to the proceedings underway as a result of the Court’s order of April 27, 1995. Because of some uncertainty about the intended scope of the confidentiality order sought, I propose not to form a response to this aspect of the motion, except to direct that information earlier provided to Merck under the Court’s order of November 4, 1993, or produced by witnesses in compliance with the subpœnas duces tecum, shall be sealed and treated in confidence. Any other information sought to be adduced from the Court file that is subject to a prior confidentiality order issued in relation to the patent action shall continue to be treated in confidence in accord with that earlier order.
If all parties can agree upon other terms of an acceptable order for confidentiality the Court would welcome an agreed proposed order. If there be no agreement, any party may move, with reason, for information it may be called upon to produce to be sealed and kept confidential.
The order now issued at this stage limits confidential protection to information provided to the plaintiffs under the order of November 4, 1993, or information produced by witnesses in compliance with subpœnas.
Conclusion
Orders now go as indicated above in relation to the preliminary motions presented.
If further directions or determinations are desired, counsel are invited to agree upon terms acceptable and to present agreed submissions about these to the Court, by telephone conference in advance of resumed hearings if that be desirable, or at the commencement of resumed hearings. If there be no agreement any of counsel may present representations to the Court.