2023 FC, 2023 FC 1153

Date: 20230825 Dockets: T-97-19 T-98-19 Citation: 2023 FC 1153 Ottawa, Ontario, August 25, 2023 PRESENT: The Honourable Mr. Justice Zinn Docket: T-97-19 BETWEEN: BRISTOL-MYERS SQUIBB CANADA CO. and BRISTOL-MYERS SQUIBB HOLDINGS IRELAND UNLIMITED COMPANY Plaintiffs and PHARMASCIENCE INC. Defendant Docket: T-98-19 AND BETWEEN: BRISTOL-MYERS SQUIBB CANADA CO. and BRISTOL-MYERS SQUIBB HOLDINGS IRELAND UNLIMITED COMPANY, AND PFIZER INC. Plaintiffs and PHARMASCIENCE INC. Defendant ORDER AND REASONS [ 1 ] The Plaintiffs move, pursuant to Rule 414 of the Federal Courts Rules , SOR/98-106 , for an Order: (

a) Fixing “the Court approved post-judgment interest rate” sought by the Reasons for Assessment of Officer Morgan dated July 26, 2023; and (

b) Amending the Certificate of Assessment dated July 26, 2023 to apply the Court’s approved post-judgment interest rate to the assessed award. [ 2 ] These actions were commenced pursuant to subsection 6(1) of the Patented Medicines (Notice of Compliance) Regulations , SOR/93- 133 , in respect of two patents. On January 4, 2021, Confidential Reasons and Judgment issued finding that the Plaintiffs’ asserted patents were valid and would be infringed by Pharmascience Inc. [Pharmascience].

Costs were awarded " “on the usual basis.” " [ 3 ] A further judgment providing instructions to the Assessment Officer assessing costs issued on April 22, 2021. Assessment Officer Morgan issued a Certificate of Assessment and Reasons for Assessment on July 26, 2023, assessing the Plaintiffs’ Bill of Costs in the total amount of $530,657.12. [ 4 ] The Plaintiffs made an uncontested request for post-judgment interest [PJI]. They submitted that an appropriate rate was 4% per annum, while Pharmascience submitted it ought to be 2.5%. Assessment Officer Morgan acknowledged that PJI is available under

section 37 of the Federal Courts Act , RSC, 1985, c F-7 [the Act ], but determined, correctly, that he lacked discretion to determine the applicable rate (see Wilson v Canada , [2000] FCJ No 1783 ).

The Assessment Officer invited the Plaintiffs to seek directions from the Court on the applicable PJI and stated, " “[o]nce obtained, the Court approved post-judgment interest rate can be included in an Amended Certificate of Assessment that can be issued to the parties by an Assessment Officer.” " [ 5 ] As noted, the Plaintiffs submit that the rate should be 4%, through averaging the interest rates of Ontario and Quebec from the date of the costs order (i.e., April 22, 2021), rounded up to the next whole number.

Pharmascience, citing this Court’s decision in Seedlings Life Science Ventures, LLC v Pfizer Canada ULC , 2020 FC 505 [ Seedlings ] , submits the rate should be 2.5% per annum " “which is consistent with the jurisprudence.” " [ 6 ] Seedlings provides some helpful guidance on awarding interest at paragraphs 33–40. It notes that the Court’s granting of PJI under subsection 37(2) of the Act is a discretionary power.

At paragraph 39, the Court observes how this discretion is to be exercised: … The exercise of that discretion must be guided by the compensatory nature of interest: Bank of America Canada v Mutual Trust Co , 2002 SCC 43 at paragraph 36 , [2002] 2 SCR 601. The purpose is to put the party entitled to the payment of a sum of money in the same situation as if the money had been paid immediately when it became due. In setting a reasonable rate, the Court may have regard to commercial rates: Astrazeneca , at paragraph 5.

It may also take into consideration the rate that would have resulted from the application of provincial interest law: Apotex Inc v Merck Canada Inc , 2012 FC 1418 at paragraph 10 . [ 7 ] In Seedlings , Justice Grammond determined that a 5% interest rate would overcompensate Pfizer " “given current economic circumstances” " (decided in 2020 during the COVID-19 pandemic) and concluded 2.5% is reasonable, taking notice of the fact that Ontario’s PJI rate was set at 3% and then-recent decreases in rates of interest.

[ 8 ] In my view, the conditions in the matter before us are different and it is inappropriate to rely on Seedlings , as Pharmascience does, to argue that the rate should be 2.5%. [ 9 ] In Astrazeneca Canada Inc v Apotex Inc , 2011 FC 663 [ Astrazeneca ], at paragraph 5 , Justice Hughes wrote: Section 37(2) of the Federal Courts Act R.S.C. 1985, c.

F-7 provides that in respect of a cause of action arising in more than one province, such as Notice of Compliance proceedings which apply throughout Canada, that the Court shall fix the rate of interest at a rate that it considers reasonable from the date of giving Judgment. A party should not be encouraged not to pay a Judgment simply because it is cheaper to let the interest accumulate. On the other hand the interest rates should be in line with current commercial rates. I have set the rate at 4.5% compounded annually which approximates a current three year mortgage rate.

It is reasonable to give a party a brief time to pay without attracting interest therefore I will provide, in effect, that the rate shall be 0% until July 1, 2011, by stipulating that interest shall not run until that date. [ 10 ] Prior to Seedlings , this Court frequently calculated PJI at a yearly rate of 5%, citing sections 3 or 4 of the Interest Act, RSC, 1985, c I-15 . See, for example, Ehler Marine & Industrial Service Co v M/V Pacific Yellowfin (Ship) , 2015 FC 324 , where with the prime rate set at less than 3%, the Court nevertheless awarded 5% in accordance with

section 3 of the Interest Act ; and Bauer Hockey Corp v Easton Sports Canada Inc , 2010 FC 361 , where at paragraph 347 , the Court states: " “it is well established that the appropriate rate is 5%, not compounded, as established by s. 4 of the Interest Act, R.S.C. 1985, c. I-15 (see Janssen-Ortho Inc. v. Novopharm Ltd., " " 2006 FC 1234 " " , " " 301 F.T.R. 166 " " , " " 57 C.P.R. (4th) 6 " " at para. " " 166 " " and Merck & Co. v. Apotex Inc., " " 2006 FC 524 " " , " " 282 F.T.R. 161 " " , " " 53 C.P.R. (4th) 1 " " at para. " " 241 " " and Servier v.

Apotex Inc., " " 2008 FC 825 " " , " " 67 C.P.R. (4th) 241 " " , " " 332 F.T.R. 193 " " at para. " " 513 " " ).” " [ 11 ] I agree with Justice Grammond at paragraph 38 of Seedlings " “that section 37(2) [of the Federal Courts Act ] is a process provided “by law” for setting the interest rate, thus displacing

section 3 of the Interest Act .” " The Court retains discretion to set a reasonable rate in the circumstances. [ 12 ] I accept the Plaintiffs’ submission that " “a reasonable way to calculate PJI in these circumstances – where one party is based in Ontario and the other in Quebec – is by using the average of those two PJI rates on the date of the costs order (April 22, 2021).” " The Plaintiffs would round up that rate to the next whole number, being 4%. The Quebec PJI rate is 5% and Ontario is 2%.

The simple average is 3.5%, which I find to be reasonable. [ 13 ] For these reasons, the Plaintiffs’ Bill of Costs, assessed and allowed in the total amount of $530,657.12, payable by the Defendant to the Plaintiffs, shall bear post-judgment interest at the rate of 3.5%, i.e., $70.06 per day. This approved post-judgment interest rate shall be included in an Amended Certificate of Assessment to be issued to the parties by an Assessment Officer. ORDER in T-97-19 and T-98-19 THIS COURT ORDERS that 1.

The Court approved post-judgment interest rate sought by the Reasons for Assessment of Officer Morgan dated July 26, 2023, is fixed at 3.5%, i.e. $70.06 per day; and 2. The Certificate of Assessment dated July 26, 2023, is amended to apply the Court’s approved post-judgment interest rate to the assessed award. "Russel W.

Zinn" Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-97-19 STYLE OF CAUSE: BRISTOL-MYERS SQUIBB CANADA CO and BRISTOL-MYERS SQUIBB HOLDINGS IRELAND UNLIMITED COMPANY v PHARMASCIENCE INC AND DOCKET: T-98-19 STYLE OF CAUSE: BRISTOL-MYERS SQUIBB CANADA CO and BRISTOL-MYERS SQUIBB HOLDINGS IRELAND UNLIMITED COMPANY, AND PFIZER INC v PHARMASCIENCE INC

MOTION IN WRITING CONSIDERED AT OTTAWA, ONTARIO, PURSUANT TO RULE 369 OF THE FEDERAL COURTS RULES . ORDER AND REASONS: ZINN J. DATED: august 25, 2023 WRITTEN REPRESENTATIONS BY : Steve Mason David Tait Sanjaya Mendis Jamie Holtom Kendra Levasseur For The Plaintiffs Kavita Ramamoorthy Neil Fineberg Kristin Marks FOR THE DEFENDANT SOLICITORS OF RECORD : McCarthy Tétrault LLP Barristers and Solicitors Toronto, Ontario For The Plaintiffs Fineberg Ramamoorthy LLP Barristers and Solicitors Toronto, Ontario For The Defendant