Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215

The case management Prothonotary issued an Order that additional discovery of two witnesses was limited to one half day per witness by teleconference. This decision was appealed to the Court and dismissed. On appeal to the Court of Appeal, a five judge panel considered whether the standard of review of discretionary orders made by prothonotaries should be reviewed. The Court of Appeal concluded that the applicable standard review is that set out in Housen v. Nikolaisen, and no longer that established in Canada v. Aqua-Gem Investments.

Two inventors were discovered each for one day, after Hospira’s request for two days of discovery of each inventor was refused. Discovery was not completed at the end of the day. Hospira brought a motion to conduct a further one day of discovery for each inventor in Toronto at the inventors’ own expense. Both inventors live in the UK.

The Court of Appeal determined that “it is not in the interests of justice to continue with a plurality of standards when one standard, i.e., the Housen standard, is sufficient to deal with the review of first instance decisions.” The Court of Appeal noted that the Ontario Court no longer follows the Ontario equivalent to Aqua-Gem and instead applies that set out inHousen. The Court of Appeal provided a number of reasons why the Federal Court should do the same, including recognizing that the question of whether a question is vital to the final issue of the case is confusing for a reviewing Court. Further, as noted by the Ontario courts, there is no basis for distinguishing, for the purposes of the standard of review, decisions of masters in the Ontario Court/prothonotaries in the Federal Court, and judges.

The Court of Appeal concluded that there was nothing in the legislation that prevents adoption of the standard inHousen. In terms of whether the Court of Appeal was able to reconsider the Aqua-Gem standard in the motion before it, the Court of Appeal addressed and rejected the Respondents’ argument that the decision in Miller v. Canada allows the Court of Appeal to reconsider its decisions “if they are manifestly wrong in the sense that they overlook relevant authority” on the basis that the decision in Aqua-Gem was not manifestly wrong. However, the Court of Appeal did agree that the decision of the Supreme Court of Canada in Carter v. Canada (Attorney General) namely that there is an exception to stare decisis that allows lower courts to not follow the decisions of higher courts in certain situations, applied. The Court of Appeal considered that there has been a change in the circumstances that changed the parameters of the debate in that standards of review have evolved, and in particular the role of prothonotaries. Thus, the Court of Appeal was free to adopt the standard of review set out in Housen for discretionary decisions made by prothonotaries as it applies to similar orders by motions judges. The Court of Appeal concluded that it should apply theHousen standard to discretionary decisions of prothonotaries and judges.

With respect to the appeal on its merits, the Court of Appeal accepted Hospira’s argument that the Respondents should have brought a motion pursuant to Rule 243 when the parties could not agree on the length of time for the discoveries. However, the Court of Appeal also found that it was only the Court that could have made the determination as to the proper duration of the examinations, which was ultimately done by the case management Prothonotary. Discovery is not unlimited, including that of inventors, and the court must consider that, as well as Rule 3, when making determinations relating to discovery. These factors were considered by the Prothonotary in reaching her decision, and the Court of Appeal concluded that it had no basis to intervene with respect to the Motions Judge’s decision to dismiss the appeal.