Jo-Anne Nelson v. Randall Ulrich, 2021 SKCA 171

Court of Appeal for Saskatchewan Docket: CACV3665 Citation: Nelson v Teva Canada Limited, 2021 SKCA 171Date: 2021-12-30Between:Jo-Anne Nelson and Randall UlrichAppellants (Plaintiffs)AndTeva Canada Limited, Cobalt Pharmaceuticals Company and PharmaScience Inc.Respondent (Defendants)Before: Caldwell, Ryan-Froslie and Kalmakoff JJ.A.Disposition: Appeal allowedWritten reasons by: The Honourable Mr. Justice CaldwellIn concurrence: The Honourable Madam Justice Ryan-Froslie The Honourable Mr. Justice KalmakoffOn appeal from: 2020 SKQB 159, ReginaAppeal heard: December 6, 2021Counsel: E.F.

Anthony Merchant, Q.C., for the Appellants Gordon J. Kuski, Q.C., Amanda Quayle, Q.C., Laura Fric and Robert Carson for the Respondents Caldwell J.A. [1] Jo-Anne Nelson and Randall Ulrich appeal against the decision of a Court of Queen’s Bench judge in Chambers striking anaction [Nelson Action] against Teva Canada Limited, Cobalt Pharmaceuticals Company and PharmaScience Inc. as an abuse of processpursuant to Rule 7-9(2)(

e) of The Queen’s Bench Rules (Nelson v Teva Canada Limited, 2020 SKQB 159 [QB Decision]). [2] The Chambers judge struck the action under Rule 7-9(2)(

e) because he found the Appellants were acting contrary to the termsof the release of claims and barring provisions of a settlement approval order [Settlement Order] in an Ontario class action againstBoehringer Ingelheim (Canada) Ltd. [Schick Action] (see Schick v Boehringer Ingelheim (Canada) Ltd., 2011 ONSC 1942). Heconcluded that the Nelson Action constituted a collateral attack against the Settlement Order and was therefore an abuse of process.

TheChambers judge did not address Rule 7-9(2)(b), under which the Respondents had sought to have him strike the pleadings as scandalous,frivolous or vexatious. [3] Although the Appellants raise jurisdictional and constitutional questions regarding national class actions in their appeal againstthe QB Decision, I do not need to address them. I would allow the appeal and set aside the order striking the action because the Chambersjudge erred in principle under Rule 7-9(2)(

e) when he struck the Nelson Action as an abuse of process. [4] Rule 7-9(2)(

e) permits a judge to strike out all or any part of a pleading where the pleading “is otherwise an abuse of processof the Court”. It reflects the Court’s inherent jurisdiction to guard against its process being used by litigants to harass or vex others (whichis catalogued under Rule 7-9(2)(b)) or in a way that would bring the administration of justice into disrepute (Walker v Mitchell, 2020SKCA 127 at para 18, [2021] 4 WWR 555 [Walker], citing Toronto v C.U.P.E., Local 79, 2003 SCC 63 at para 51, [2003] 3 SCR 77).

TheRule is, however, only to be used where it is “plain and obvious” that allowing an action to proceed would amount to an abuse of process(Hunt v Carey Canada Inc., (SCC), [1990] 2 SCR 959).

Relevant to this appeal, the Supreme Court in Hunt stated that“neither the length and complexity of the issues, the novelty of the cause of action, nor the potential for the defendant to present a strongdefence should prevent the plaintiff from proceeding with his or her case” (at 980; emphasis added). [5] In this case, the Chambers judge erred in principle when he struck the Nelson Action because the Respondents had only raiseda potential defence to the Appellants’ claims against them. [6] In the Nelson Action, the Appellants have claimed in tort against the Respondents regarding generic pramipexoledihydrochloride, a drug that is used to treat Parkinson’s disease and other disorders.

They had also claimed against Boehringer—theoriginal manufacturer of the drug—but discontinued as against it on the heels of the settlement of the Schick Action.

In the matter beforethe Chambers judge, the Respondents—who are manufacturers of generic forms of pramipexole dihydrochloride—applied to strike theAppellants’ pleadings as an abuse of process pursuant to Rule 7-9(2)(e), asserting that the Appellants had released their claims againstthem and were barred from continuing the Nelson Action under the Settlement Order. [7] By approaching this matter under Rule 7-9(2)(e), the success of the Respondents’ applications depended on the

interpretationof the Settlement Order in a way that manifestly disposed of the Appellants’ claims against them in a final manner. However, when statingthe parties’ positions as a preface to his analysis of the issues in the application to strike, the Chambers judge seems to have accepted theRespondents’

interpretation of the Settlement Order without first inquiring into it: [138] Before addressing the specific issues raised by this application, I think it is helpful to note certain aspects of this matter that are notin issue, or do not appear to be in issue. … Finally, the plaintiffs in the Nelson action do not appear to question the defendants’interpretation of para. 13 of the settlement approval order. In this respect, the defendants interpret this term of the order to mean that, butfor the release and bar provisions of the order, the defendants, as the generic producers and distributions of Mirapex, “may” have a claimfor contribution or indemnity against [Boehringer].

[139] I also preface this analysis with the observation that the certification and settlement arrangements in the Schick action were obviously designed to provide a comprehensive resolution of all liability questions related to the prescription and ingestion of Mirapex prior to July 27, 2012, the date of the certification order. This is reflected in the fact that the certified class in the Schick action includes people who took Mirapex that was produced and distributed by entities other than [Boehringer], namely, the generic producers.

Moreover, the comprehensive nature of the resolution could only be assured by terms of the releases and bar order, which prevented actions being commenced against the generic producers who could, in turn, claim over against the drug’s originator. [ 8 ] There is little doubt that the Settlement Order was “obviously designed to provide a comprehensive resolution of all liability questions related to the prescription and ingestion of Mirapex prior to July 27, 2012”.

However, there are palpable errors of fact in other parts of the Chambers judge’s preface that undermine his understanding of the Settlement Order as barring actions against manufacturers of pramipexole dihydrochloride other than Boehringer. [ 9 ] The Chambers judge erroneously conflated the drug marketed and sold under the Mirapex trademark with the drugs marketed and sold in Canada by other manufacturers.

Reinforcing the first error, the Chambers judge erroneously stated that the certified class in the Schick Action included “people who took Mirapex that was produced and distributed by entities other than [Boehringer], namely, the generic producers”. There are no claims to that effect in the statement of claim in the Schick Action (which was adduced into evidence by the Respondents).

Furthermore, the certification order does not define the class as it was described by the Chambers judge; it refers only to Mirapex-branded pramipexole dihydrochloride: All persons resident in Canada (other than in Quebec)·who were prescribed the drug Mirapex® (generic name: pramipexole dihydrochloride) at any time on or before the date of this Order. [ 10 ] Notably, the ® symbol follows the word Mirapex in the certification order (as well as in the settlement agreement and the settlement notice in the Shick Action, which were also adduced into evidence in this matter).

That symbol identifies the word Mirapex as a registered trademark—i.e., as “a sign… that is used… by a person for the purpose of distinguishing or to distinguish their goods or services from those of others ” ( Trademarks Act , RSC 1985, c T-13, s. 2 ; emphasis added). I acknowledge that the parenthetical information “(generic name: pramipexole dihydrochloride)” follows the reference to Mirapex® in the certification order (and in the settlement notice) but that fails to lend any certainty to the issue for two reasons.

First, as it is parenthetical information, it can arguably be removed from the sentence without affecting its meaning.

Second, a trademark is a proper noun that, if used correctly, is always followed by a generic description of the good or service. [ 11 ] While I do not expect users of pramipexole dihydrochloride to be grammarians or to be conversant with trademark law, I can see no reason to start with the presumption that the certification order is grammatically incorrect or that it refers to a registered trademark in direct contradiction to the purpose for which a trademark is registered under the Trademarks Act .

That is, on its face, Mirapex ® legally denotes the specific form of pramipexole dihydrochloride sold in Canada by Boehringer ( Trademarks Act , s. 19 ).

It does not, as the Chambers judge seems to have understood, generically denote the drug pramipexole dihydrochloride. [ 12 ] Furthermore, there was no evidence to support the Chambers judge’s statement that Mirapex-branded pramipexole dihydrochloride was produced or distributed in Canada by manufacturers other than Boehringer. [ 13 ] Let me make a few more observations to underscore the fact that it was far from certain that the Settlement Order had released, and barred claims against, manufacturers of the drug other than Boehringer: (

a) none of the Respondents were defendants in the Schick Action and none of them are parties to the Settlement Order or the settlement agreement entered into between the representative plaintiff in the Schick Action and Boehringer; (

b) none of the settlement documents in the Schick Action refer by name or by category to any of the Respondents or any manufacturers of generic pramipexole dihydrochloride—although the settlement agreement does refer to Pfizer Inc., which was named as a defendant because it “is currently involved in and/or responsible for the research, development, manufacturing, sales, distribution and/or marketing of Mirapex in the United States and/or Canada” and because it had acquired a manufacturer of Mirapex-branded pramipexole dihydrochloride (Schick Action statement of claim at para 5), i.e., not as a generic manufacturer of pramipexole dihydrochloride; and (

c) none of the statement of claim in the Schick Action or settlement documents refer to pramipexole dihydrochloride other than as was marketed and sold under the trademark Mirapex , which is a registered trademark of Boehringer; and (

d) there was no evidence that Boehringer had licensed the use of the trademark Mirapex to anyone. The foregoing are merely observations made on the face of the Settlement Order and the court record in these proceedings; they are not findings of fact or an

interpretation of that order. [ 14 ] In short, I find the Chambers judge turned to his analysis of the Respondents’ application to strike with an erroneous understanding of the facts.

It was far from certain that the Settlement Order had released the Appellants’ claims against the Respondents and had barred them from continuing the Nelson Action. [ 15 ] In his analysis of the issues that he saw as arising before him, the Chambers judge commented on the effect of the Settlement Order as he understood it, saying that the Settlement Order was “reasonably comprehensive” and that the Appellants had had “ample notice” of it, such that he was obliged to give it “full faith and credit” (at paras 145–147).

However, he made these remarks in a conclusory way under the rubrics of procedural fairness and The Enforcement of Canadian Judgments Act, 2002 , SS 2002, c E-9.1001 , and they do not regain the ground lost under the preface to his analysis. [ 16 ] More fundamentally, nowhere in the QB Decision did the Chambers judge directly address the first-order question necessary to determine whether it was “plain and obvious” that the Nelson Action was an abuse of process: Does the Settlement Order in fact and at law dispose of the Appellants’ rights of action against the Respondents?

This question should have been at the root of his inquiry under Rule 7-9(2)(e). Moreover, given that it is a question that calls for an assessment of the factual matrix relevant to the

interpretation of the Settlement Order, I would hazard to suggest that it may have been preferrable to address it under a Rule 7-1 or Rule 7-2 application. I say

that because I recognise that the evidence before the Court as to the factual matrix relevant to the

interpretation of the Settlement Order is incomplete and, if it were complete, it could result in an

interpretation that provides a defence for the Respondents. [ 17 ] However, for the purposes of a Rule 7-9(2)(

e) application, “it is enough that the plaintiff has some chance of success” ( Hunt at 989). In CPC Networks Corp. v McDougall Gauley LLP , 2021 SKCA 127 at para 92 , Barrington-Foote J.A. found that it was an error in principle to strike a claim as an abuse of process where there is an arguable issue as to whether the claim is barred.

That is the ratio of this appeal as well: Since the Respondents’ proffered defence—i.e., that the Settlement Order bars continuation of the Nelson Action— remained an arguable issue, the Appellants had some chance of success in their action and, therefore, the Chambers judge should not have struck the statement of claim as an abuse of process. [ 18 ] To summarize, it is an arguable issue whether the Settlement Order disposes of or bars the Appellants’ claims against the Respondents; and, therefore, it is not plain and obvious that the Nelson Action is an abuse of process.

As such, the statement of claim was struck as the result of an error in principle. [ 19 ] I would set aside the QB Decision with costs to the Appellants in this Court and in the Court of Queen’s Bench in the usual way. “Caldwell J.A.” Caldwell J.A. I concur. “Ryan-Froslie J.A.” Ryan-Froslie J.A. I concur. “Kalmakoff J.A.” Kalmakoff J.A.