Wednesday, September 21, 2016

Repayment of Damages Paid Pending Appeal

Pfizer Canada Inc v Teva Canada Ltd 2016 FCA 218 Stratas JA:Gleason JA (Ryer JA*) refusing to vary 2016 FCA 161
            1,248,540/ 2,199,778 / venlafaxine / EFFEXOR XR

The circumstances of this motion are “unusual” [25]. In Teva v Pfizer 2014 FC 248 (here), Zinn J awarded Teva almost $125m, including interest, under s 8 of the PM(NOC) Regulations, as compensation for having wrongly been kept off the market for venlafaxine. Pfizer paid the damages award to Teva and launched an appeal [3]. Pfizer was successful, at least to the extent that in 2016 FCA 161 the FCA vacated Zinn J’s award because it was based on inadmissible hearsay evidence. The matter was remitted to Zinn J for redetermination (see here) [2]. Pfizer then asked Teva for the money back. Teva refused. The difficulty for Pfizer is that there was no provision in the FCA judgment requiring Teva to return the money. Pfizer therefore brought this motion, asking the FCA to vary its judgment to add a term requiring Teva to repay the money with interest [5].

The first issue was whether the two remaining members of the original panel has subject-matter jurisdiction, notwithstanding the retirement of the third. The Court concluded that it did have jurisdiction [10].

Nonetheless, and notwithstanding that “[i]n light of the judgment of this Court and on the record before us, Teva has absolutely no right to keep Pfizer’s payment” [4], the FCA refused to vary its judgment to order Teva to return the money. Pfizer’s failure to request the return of the money was fatal: “Without a formal, explicit request for specific relief in the notice of appeal, the request is not before the Court. . . . Now that judgment has been rendered, it is not possible to retroactively expand the scope of the appeal and then vary the judgment” [22].

Pfizer is not without recourse. The matter has been remitted to Zinn J for redetermination. He may again find that Pfizer owes substantial damages to Teva. If he does, in making his award of damages he “will be bound to take into account any payments that Teva might have received to which it is not entitled,” including consideration of interest [23]. That is, the amount already paid will be offset, with interest, against any future award. In the alternative, or if no damages are awarded on remand, Pfizer “can sue Teva for restitutionary recovery of monies wrongly withheld from it” [23].

*Ryer JA was a member of the original panel, but had retired and was functus by the time of this hearing [8].

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