Judgments

[1994] 1 F.C. 742

A-457-93

Merck & Co., Inc. and Merck Frosst Canada Inc. (Appellants) (Respondents)

v.

Apotex Inc. (Respondent) (Applicant)

and

Attorney General of Canada and The Minister of National Health and Welfare (Respondents) (Respondents)

Indexed as: Apotex Inc. v. Canada (Attorney General) (C.A.)

Court of Appeal, Mahoney, Robertson and McDonald JJ.A.—Ottawa, August 31, September 1 and October 22, 1993.

Food and drugs — Appeal and cross-appeal from Trial Division decision granting mandamus and denying prohibition with respect to generic drug notice of compliance (NOC) — Under Food and Drugs Act, “new drugs” must meet health and safety requirements — NOC granted if drug found effective, safe — Scientific safety and efficacy conditions met — Apotex having vested right to NOC despite Minister’s failure to render decision pending enactment of Patent Act Amendment Act, 1992 (Bill C-91) — Narrow scope of ministerial discretion — Pending legislative policy irrelevant consideration.

Patents — Bill C-91 enacted to protect innovator pharmaceutical companies’ distribution and sales rights to patented drugs — Patented Medicines Regulations prohibiting issuance of NOCs in respect of patent-linked drugs — NOCs, patent rights linked, not mutually dependent — Mandamus not intended to facilitate patent infringement — Regulations not procedural per se — Generic drug manufacturer’s vested right to NOC not divested by Bill C-91, Regulations, ss. 5(1),(2).

Judicial review — Prerogative writs — Mandamus — Generic drug manufacturer seeking mandamus to compel Minister to issue notice of compliance — Case law on requirements for mandamus — Available where duty to act not owing at time application filed — Delay for seeking legal advice not bar to mandamus — Court having discretion to invoke balance of convenience test as ground for refusing mandamus — Criteria for exercise of discretion — No legal basis to deny mandamus herein on ground of balance of convenience.

Federal Court jurisdiction — Appeal Division — Jurisdiction under Federal Court Act, s. 18 not ousted by paramountcy provision in Bill C-91 (Patent Act Amendment Act, 1992) — Patent Act, s. 55.2(5) not privative clause insulating Minister, legislation from judicial review.

These were an appeal and a cross-appeal from a decision by Dubé J. allowing an application for mandamus to issue a notice of compliance (NOC) with respect to Apotex’s generic version of the drug enalapril and denying the appellants’ application for prohibition. The Patent Act Amendment Act, 1992 (Bill C-91), which was given Royal Assent on February 4, 1993, was enacted in order to protect innovator pharmaceutical companies’ distribution and sales rights to patented drugs. Bill C-91 came into force on February 15, 1993 with the exception of the new section 55.2 of the Patent Act which, together with the Patented Medicines Regulations, were not brought into effect until March 12, 1993. Under the Food and Drugs Act (FDA), the Minister of National Health and Welfare must ensure that new drugs meet health and safety requirements. The manufacturer of a new drug must file a New Drug Submission (NDS) setting out the drug’s qualities, ingredients and methods of manufacture and purification. The respondent, Apotex, after filing a NDS in respect of its generic drug Apo-Enalapril, sought an order of mandamus to compel the Minister to issue a notice of compliance with respect to that drug. Apotex’s NDS was incomplete when it filed its mandamus application; nevertheless, by February 3, 1993, the new drug met all of the scientific safety and efficacy conditions required for a NOC to issue. Although the NDS had cleared the scientific and regulatory review process, the Department’s ADM and DM decided to seek legal advice regarding the authority of the Minister or his ADM to issue the NOC in view of the impending passage of Bill C-91. The appellant, Merck, also forwarded a number of legal opinions to the Minister and then sought prohibition to prevent the Minister from issuing the notice of compliance. The Trial Judge ruled that the Minister did not possess the broad discretion to justify his refusal to issue the NOC and that the delay in issuing it was not warranted. He also rejected the argument that to issue mandamus when a new regulatory regime was pending would “frustrate the will of Parliament”. This appeal raised a number of issues, namely: 1) the principles governing mandamus and the question of prematurity; 2) whether Apotex had a vested right to a NOC by March 12, 1993; 3) the balance of convenience; 4) whether Apotex’s vested right to a NOC was divested by Bill C-91 and the Patented Medicines Regulations and 5) the jurisdiction of the Court. By cross-appeal, the Minister argued that the Trial Judge erred in finding the delay in issuing the NOC to be unwarranted.

Held, the appeal and cross-appeal should be dismissed.

1) Several principal requirements must be satisfied before mandamus will issue. First, there must be a public legal duty to act owed to the applicant. Generally, mandamus cannot issue with respect to a duty owed to the Crown. The Minister had a duty to act which was owed to Apotex. Merck’s submission, that the Minister owed no duty to Apotex at the time it commenced its judicial review application on December 22, 1992 or on the hearing date, was partly correct. An order of mandamus will not lie to compel an officer to act in a specified manner if he is under no obligation to act as of the hearing date, but that rule was not valid if applied as of the date that the application for mandamus was filed. While it is open to a respondent to pursue dismissal of an application where the duty to perform has yet to arise, in the absence of compelling reasons, an application for mandamus should not be defeated on the ground that it was initiated prematurely. Provided that the conditions precedent to the exercise of the duty have been satisfied at the time of the hearing, the application should be assessed on its merits.

2) If a decision-maker has an unfettered discretion which he has not exercised as of the date a new law takes effect, the applicant cannot successfully assert either a vested right or even the right to have the decision-maker render a decision. A “vested right” must be distinguished from a “mere hope or expectation”. The scope of a decision-maker’s discretion is directly contingent upon the characterization of various considerations as “relevant or irrelevant” to its exercise. The Food and Drug Regulations restrict the factors to be considered by the Minister in the proper exercise of his discretion to those concerning a drug’s safety and efficacy. They neither expressly nor implicitly contemplate the broad scope of ministerial discretion advocated by Merck. It cannot be said that the time needed to enable a decision-maker to seek and obtain legal advice in any decision-making process is of itself a basis for denying mandamus. That self-imposed obligation cannot of itself deprive Apotex of its right to mandamus. In the absence of intervening legislation, the “legal advice” issue would not have arisen. The legal advice sought herein had no bearing on the exercise of the Minister’s narrowly circumscribed discretion. Moreover, to deny mandamus because of legal concerns generated by a party adverse in interest (Merck) would be to judicially condone what might be regarded as a tactical manoeuvre intended to obfuscate and delay the decision-making process. Pending legislative policy was not a consideration relevant to the exercise of the Minister’s discretion. It could not be said that, in the exercise of his statutory power under the Food and Drug Regulations, the Minister was entitled to have regard to the provisions of Bill C-91 after enactment but prior to proclamation. Apotex had a vested right to the NOC notwithstanding the Minister’s failure to render a decision by March 12, 1993.

3) The case law on mandamus reveals a number of techniques resorted to by courts in balancing competing interests. Any inclination to engage in a balancing of interests must be measured strictly against the rule of law. Having regard to the relevant jurisprudence, it had to be concluded that this Court possesses discretion to refuse mandamus on the ground of balance of convenience. The cases demonstrate three factual patterns in which the balance of convenience test has been implicitly acknowledged. First, there are those cases where the administrative cost or chaos that would result from granting such relief is obvious and unacceptable. The second ground for denying mandamus appears to arise in instances where potential public health and safety risks are perceived to outweigh an individual’s right to pursue personal or economic interests. In this case, there was no issue with respect to administrative chaos or public health and safety. The third line of authority attempts to establish a principle by which it can be determined whether a property owner has acquired a vested right to a building permit pending approval of a by-law amendment. That principle is of no relevance to this case nor to the issue of the Court’s discretion to refuse mandamus on the ground of balance of convenience. There was no legal basis upon which the “balance of convenience” test could be applied to deny Apotex the relief sought.

4) The Patented Medicines Regulations prohibit the issuance of NOCs in respect of “patent-linked” drugs. Subsections 5(1) and (2) thereof refer to NDSs filed before March 12, 1993. While NOCs and patent rights are linked, they have never been mutually dependent. Practically speaking, Merck is seeking an interlocutory injunction against Apotex with respect to possible patent infringement without having to satisfy the conditions precedent imposed at law to the granting of such relief. An order in the nature of mandamus cannot be viewed as an instrument which “facilitates” patent infringement. The Patented Medicines Regulations are not procedural regulations per se. The imposition of a criterion that a NOC cannot issue with respect to a patent-linked NDS is clearly a substantive change in the law and hence subject to the rules of statutory construction applicable to legislation purporting to affect vested rights. Subsections 5(1) and (2) do not manifestly seek to divest persons of acquired rights; they are at best ambiguous. While Parliament has the authority to pass retroactive legislation, thereby divesting persons of an acquired right, vested rights could not be divested by the Patented Medicines Regulations unless the enabling legislation, that is the Patent Act or Bill C-91, implicitly or explicitly authorize such encroachments. Bill C-91 contains no provision specifically authorizing regulations to interfere with existing or vested rights except as to compulsory licences granted after December 20, 1991.

5) The jurisdiction of this Court was not “ousted” by the paramountcy provision in Bill C-91. Subsection 55.2(5) of the Patent Act could not be said to be paramount to section 18 of the Federal Court Act and could not be construed as a privative clause insulating the Minister and the relevant legislation from judicial review.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Clean Water Act, R.S.A. 1980, c. C-13, s. 3.

Criminal Code, R.S.C. 1970, c. C-34.

Criminal Law Amendment Act, 1977, S.C. 1976-77, c. 53.

Federal Court Act, R.S.C., 1985, c. F-7, s. 18 (as am. by S.C. 1990, c. 8, s. 4).

Food and Drug Regulations, C.R.C., c. 870, ss. C.08.002 (as am. by SOR/85-143, s. 1), C.08.004 (as am. idem, s. 3, SOR/88-257, s. 1).

Food and Drugs Act, R.S.C., 1985, c. F-27.

Interpretation Act, R.S.C. 1952, c. 158.

Interpretation Act, S.C. 1967-68, c. 7, ss. 36(c), 37(c).

Interpretation Act, R.S.C., 1985, c. I-21, s. 44(c).

Orders and Regulations respecting Patents of Invention made under The War Measures Act, 1914, (1914), 48 The Canada Gazette 1107.

Patent Act, S.C. 1923, c. 23, s. 17.

Patent Act, R.S.C. 1952, c. 203, s. 41(3) (as am. by S.C. 1968-69, c. 49, s. 1).

Patent Act, R.S.C., 1985, c. P-4, ss. 39(4),(14), 55.2 (as enacted by S.C. 1993, c. 2, s. 4).

Patent Act Amendment Act, 1992, S.C. 1993, c. 2, ss. 3, 4, 12(1).

Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, ss. 5, 6, 7(1).

War Measures Act, 1914 (The), S.C. 1914 (2nd Sess.), c. 2.

CASES JUDICIALLY CONSIDERED

APPLIED:

Merck & Co. Inc. v. Sherman & Ulster Ltd., Attorney-General of Canada, Intervenant (1971), 65 C.P.R. 1 (Ex. Ct.); appeal to S.C.C. dismissed [1972] S.C.R. vi; Director of Public Works v. Ho Po Sang, [1961] A.C. 901 (P.C.); A.G. for British Columbia et al. v. Parklane Private Hospital Ltd., [1975] 2 S.C.R. 47; (1974), 47 D.L.R. (3d) 57; [1974] 6 W.W.R. 72; 2 N.R. 305.

DISTINGUISHED:

Ottawa, City of v. Boyd Builders Ltd., [1965] S.C.R. 408; (1965), 50 D.L.R. (2d) 704; Engineers’ and Managers’ Association v. Advisory, Conciliation and Arbitration Service, [1980] 1 W.L.R. 302 (H.L.); Wimpey Western Ltd. and W-W-W Developments Ltd. v. Director of Standards and Approvals of the Department of the Environment, Minister of the Environment and Province of Alberta (1983), 49 A.R. 360; 3 Admin. L.R. 247; 23 Alta. L.R. (2d) 193 (C.A.).

CONSIDERED:

Pfizer Canada Inc. v. Minister of National Health & Welfare et al. (1986), 12 C.P.R. (3d) 438 (F.C.A.); leave to appeal to S.C.C. refused (1987), 14 C.P.R. (3d) 447; 76 N.R. 397; Glaxo Canada Inc. v. Canada (Minister of National Health and Welfare), [1988] 1 F.C. 422; (1987), 43 D.L.R. (4th) 273; 16 C.I.P.R. 55; 18 C.P.R. (3d) 206; 16 F.T.R. 81; additional reasons at (1988), 19 C.I.P.R. 120; 19 C.P.R. (3d) 374 (T.D.); affd (1990), 68 D.L.R. (4th) 761; 31 C.P.R. (3d) 29; 107 N.R. 195 (F.C.A.); O’Grady v. Whyte, [1983] 1 F.C. 719; (1982), 138 D.L.R. (3d) 167; 42 N.R. 608 (C.A.); Karavos v. Toronto & Gillies, [1948] 3 D.L.R. 294; [1948] O.W.N. 17 (Ont. C.A.); Distribution Canada Inc. v. M.N.R., [1991] 1 F.C. 716; (1990), 46 Admin. L.R. 34; 39 F.T.R. 127 (T.D.); affd [1993] 2 F.C. 26 (C.A.); Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. (1965), 113 C.L.R. 177 (Aust. H.C.); Martinoff v. Gossen, [1979] 1 F.C. 327 (T.D.); Lemyre v. Trudel, [1978] 2 F.C. 453; (1978), 41 C.C.C. (2d) 373 (T.D.); affd [1979] 2 F.C. 362; (1979), 49 C.C.C. (2d) 188 (C.A.); Abell v. Commissioner of Royal Canadian Mounted Police (1979), 49 C.C.C. (2d) 193; 3 Sask. R. 181 (C.A.); Re Central Canada Potash Co. Ltd. et al. and Minister of Mineral Resources for Saskatchewan (1972), 30 D.L.R. (3d) 480; [1972] 6 W.W.R. 62 (Sask. Q.B.); affd (1973), 32 D.L.R. (3d) 107; [1973] 1 W.W.R. 193 (Sask. C.A.); appeal to S.C.C. dismissed (1973), 38 D.L.R. (3d) 317; [1973] 2 W.W.R. 672; Fitzgerald v. Muldoon, [1976] 2 N.Z.L.R. 615 (S.C.).

REFERRED TO:

Apotex Inc. v. Attorney General of Canada et al. (1986), 11 C.P.R. (3d) 43; 10 F.T.R. 271 (F.C.T.D.); application for reconsideration denied (1986), 11 C.P.R. (3d) 62 (F.C.T.D.); affd (1986), 12 C.P.R. (3d) 95; 77 N.R. 71 (F.C.A.); leave to appeal to S.C.C. refused (1987), 14 C.P.R. (3d) 447; Apotex Inc. v. Canada (Attorney General) et al. (1993), 59 F.T.R. 85 (F.C.T.D.); C.E. Jamieson & Co. (Dominion) v. Canada (Attorney General), [1988] 1 F.C. 590; (1987), 46 D.L.R. (4th) 582; 37 C.C.C. (3d) 193; 12 F.T.R. 167 (T.D.); Mensinger v. Canada (Minister of Employment and Immigration), [1987] 1 F.C. 59; (1986), 24 C.R.R. 260; 5 F.T.R. 64 (T.D.); Minister of Employment and Immigration v. Hudnik, [1980] 1 F.C. 180; (1979), 103 D.L.R. (3d) 308 (C.A.); Jefford v. Canada, [1988] 2 F.C. 189; (1988), 47 D.L.R. (4th) 321; 28 C.L.R. 266 (C.A.); Winegarden v. Public Service Commission and Canada (Minister of Transport) (1986), 5 F.T.R. 317 (F.C.T.D.); Rossi v. The Queen, [1974] 1 F.C. 531; (1974), 17 C.C.C. (2d) 1 (T.D.); Canadian Wildlife Federation Inc. v. Canada (Minister of the Environment), [1989] 3 F.C. 309; [1989] 4 W.W.R. 526; (1989), 37 Admin. L.R. 39; 3 C.E.L.R. (N.S.) 287; 26 F.T.R. 245 (T.D.); affd [1990] 2 W.W.R. 69; (1989), 38 Admin. L.R. 138; 4 C.E.L.R. (N.S.) 1; 99 N.R. 245 (F.C.A.); Bedard v. Correctional Service of Canada, [1984] 1 F.C. 193 (T.D.); Carota v. Jamieson, [1979] 1 F.C. 735 (T.D.); affd [1980] 1 F.C. 790 (C.A.); Nguyen v. Canada (Minister of Employment and Immigration), [1994] 1 F.C. 232 (C.A.); Rothmans of Pall Mall Canada Limited v. Minister of National Revenue (No. 1), [1976] 2 F.C. 500; (1976), 67 D.L.R. (3d) 505; [1976] C.T.C. 339; 10 N.R. 153 (C.A.); Secunda Marine Services Ltd. v. Canada (Minister of Supply & Services) (1989), 38 Admin. L.R. 287; 27 F.T.R. 161 (F.C.T.D.); Szoboszloi v. Chief Returning Officer of Canada, [1972] F.C. 1020 (T.D.); Hutchins v. Canada (National Parole Board), [1993] 3 F.C. 505 (C.A.); Thorson v. Attorney General of Canada et al., [1975] 1 S.C.R. 138; (1974), 43 D.L.R. (3d) 1; 1 N.R. 225; Nova Scotia Board of Censors v. McNeil, [1976] 2 S.C.R. 265; (1975), 12 N.S.R. (2d) 85; 55 D.L.R. (3d) 632; 32 C.R.N.S. 376; 5 N.R. 43; Minister of Justice of Canada et al. v. Borowski, [1981] 2 S.C.R. 575; (1981), 130 D.L.R. (3d) 588; [1982] 1 W.W.R. 97; 12 Sask.R. 420; 64 C.C.C. (2d) 97; 24 C.P.C. 62; 24 C.R. (3d) 352; 39 N.R. 331; Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607; (1986), 33 D.L.R. (4th) 321; [1987] 1 W.W.R. 603; 23 Admin. L.R. 197; 17 C.P.C. (2d) 289; 71 N.R. 338; Bhatnager v. Minister of Employment and Immigration, [1985] 2 F.C. 315 (T.D.); Restrictive Trade Practices Commission v. Director of Investigation and Research, Combines Investigation Act, [1983] 2 F.C. 222; (1983), 145 D.L.R. (3d) 540; 70 C.P.R. (2d) 145; 48 N.R. 305 (C.A.); revg [1983] 1 F.C. 520; (1982), 142 D.L.R. (3d) 333; 67 C.P.R. (2d) 172 (T.D.); Maple Lodge Farms Ltd. v. Government of Canada, [1980] 2 F.C. 458 (T.D.); affd Maple Lodge Farms Ltd. v. R., [1981] 1 F.C. 500; (1980), 114 D.L.R. (3d) 634; 42 N.R. 312 (C.A.); affd Maple Lodge Farms Ltd. v. Government of Canada, [1982] 2 S.C.R. 2; (1982), 137 D.L.R. (3d) 558; 44 N.R. 354; Kahlon v. Canada (Minister of Employment and Immigration), [1986] 3 F.C. 386; (1986), 30 D.L.R. (4th) 157; 26 C.R.R. 152 (C.A.); Harelkin v. University of Regina, [1979] 2 S.C.R. 561; (1979), 96 D.L.R. (3d) 14; [1979] 3 W.W.R. 676; 26 N.R. 364; Canada (Auditor General) v. Canada (Minister of Energy, Mines and Resources), [1987] 1 F.C. 406; (1987), 35 D.L.R. (4th) 693; 27 Admin. L.R. 79; 73 N.R. 241 (C.A.); appeal dismissed [1989] 2 S.C.R. 49; (1989), 61 D.L.R. (4th) 604; 97 N.R. 241; Friends of the Oldman River Society v. Canada (Minister of Transport), [1990] 2 F.C. 18; (1990), 68 D.L.R. (4th) 375; [1991] 1 W.W.R. 352; 76 Alta. L.R. (2d) 289; 5 C.E.L.R. (N.S.) 1; 108 N.R. 241 (C.A.); affd [1992] 1 S.C.R. 3; (1992), 88 D.L.R. (4th) 1; [1992] 2 W.W.R. 193; 84 Alta. L.R. (2d) 129; 3 Admin. L.R. (2d) 1; 7 C.E.L.R. (N.S.) 1; 132 N.R. 321; Landreville v. The Queen, [1973] F.C. 1223; (1973), 41 D.L.R. (3d) 574 (T.D.); Beauchemin v. Employment and Immigration Commission of Canada (1987), 15 F.T.R. 83 (F.C.T.D.); Penner v. Electoral Boundaries Commission (Ont.), [1976] 2 F.C. 614 (T.D.); Haines v. Attorney General of Canada (1979), 32 N.S.R. (2d) 271; 54 A.P.R. 271; 47 C.C.C. (2d) 548 (C.A.); Carrier-Sekani Tribal Council v. Canada (Minister of the Environment), [1992] 3 F.C. 316 (C.A.); Toronto Corporation v. Roman Catholic Separate Schools Trustees, [1926] A.C. 81 (P.C.); Re Hall and City of Toronto et al. (1979), 23 O.R. (2d) 86; 94 D.L.R. (3d) 750; 8 M.P.L.R. 155; 10 R.P.R. 129 (C.A.); Howard Smith Paper Mills Ltd. et al. v. The Queen, [1957] S.C.R. 403; (1957), 8 D.L.R. (2d) 449; 118 C.C.C. 321; 29 C.P.R. 6; 26 C.R. 1; Gardner v. Lucas (1878), 3 App. Cas. 582 (H.L.); De Roussy v. Nesbitt (1920), 53 D.L.R. 514 (Alta. C.A.); Angus v. Sun Alliance Insurance Co., [1988] 2 S.C.R. 256; (1988), 65 O.R. (2d) 638; 52 D.L.R. (4th) 193; 34 C.C.L.T. 237; 47 C.C.L.T. 39; [1988] I.L.R. 1-2370; 9 M.V.R. (2d) 245; 87 N.R. 200; 30 O.A.C. 210; Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271; (1975), 66 D.L.R. (3d) 449; [1976] C.T.C. 1; 75 D.T.C. 5451; 7 N.R. 401; Attorney General of Quebec v. Expropriation Tribunal et al., [1986] 1 S.C.R. 732; (1986), 66 N.R. 380; Venne v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 880; (1989), 95 N.R. 335; 24 Q.A.C. 162; 4 R.P.R. (2d) 1; Lorac Transport Ltd. v. Atra (The), [1987] 1 F.C. 108; (1986), 28 D.L.R. (4th) 309; 69 N.R. 183; Northern & Central Gas Corp. v. National Energy Board, [1971] F.C. 149; (1971), 26 D.L.R. (3d) 174; [1971] 4 W.W.R. 413 (T.D.); Minister of National Revenue v. 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AUTHORS CITED

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Macdonald, R. A. and M. Paskell-Mede, “Annual Survey of Canadian Law: Administrative Law” (1981), 13 Ottawa L. Rev. 671.

Makuch, Stanley M. Canadian Municipal and Planning Law. Toronto: Carswell, 1983.

Mercer, Peter P. Annot. (1983), 3 Admin. L.R. 248.

Wade, Sir William. Administrative Law, 6th ed. Oxford: Clarendon Press, 1988.

APPEAL and CROSS-APPEAL from a Trial Division decision ((1993), 49 C.P.R. (3d) 161; 66 F.T.R. 36 (F.C.T.D.)) allowing application for mandamus to compel the Minister of National Health and Welfare to issue a notice of compliance with respect to a generic drug, and dismissing appellant’s application for prohibition. Appeal and Minister’s cross-appeal dismissed.

COUNSEL:

W. Ian C. Binnie, Q.C., and William H. Richardson for appellants (respondents).

Harry B. Radomski and Richard Naiberg for respondent (applicant) Apotex Inc.

H. Lorne Murphy, Q.C., and Steve J. Tenai for respondents (respondents) Attorney General of Canada and the Minister of National Health and Welfare.

SOLICITORS:

McCarthy Tétrault, Toronto, for appellants (respondents).

Goodman & Goodman, Toronto, for respondent (applicant) Apotex Inc.

Deputy Attorney General of Canada for respondents (respondents) Attorney General of Canada and the Minister of National Health and Welfare.

The following are the reasons for judgment rendered in English by

Robertson J.A.: The respondent, Apotex Inc. (“Apotex”), is a “generic” manufacturer and distributor of drugs. That is to say it manufactures and distributes drugs which were researched, developed and first brought to market by “innovator” companies. Apotex sought an order in the nature of mandamus to compel the Minister of National Health and Welfare (the “Minister”) to issue a notice of compliance (“NOC”) with respect to Apo-Enalapril, its generic version of the drug enalapril. Armed with a NOC, Apotex would have been in a position to market Apo-Enalapril in direct competition with “VASOTEC”, the trade-mark under which the appellants, Merck & Co., Inc. and Merck Frosst Canada Inc. (“Merck”), manufacture and sell enalapril.

Merck, an “innovator” drug manufacturer, is the leading pharmaceutical company in Canada in terms of sales. Its drug “VASOTEC” is used for the treatment of congestive heart failure and hypertension and is the largest selling pharmaceutical in Canada, contributing approximately $140 million toward Merck’s annual revenue of $400 million. It is thus not surprising that Merck sought an order prohibiting the Minister from issuing the NOC to Apotex. The mandamus and prohibition applications were consolidated by order of the Court and heard together. Apotex was the victor and hence the matter is before us for further consideration.

This is not the first time the competing economic interests of Canadian generic and innovator drug manufacturers have collided: e.g., Pfizer Canada Inc. v. Minister of National Health & Welfare et al. (1986), 12 C.P.R. (3d) 438 (F.C.A.); leave to appeal to Supreme Court refused (1987), 14 C.P.R. (3d) 447; Glaxo Canada Inc. v. Canada (Minister of National Health and Welfare), [1988] 1 F.C. 422 (T.D.), additional reasons at (1988), 19 C.I.P.R. 120 (F.C.T.D.); affd (1990), 68 D.L.R. (4th) 761 (F.C.A.); and Apotex Inc. v. Attorney General of Canada et al. (1986), 11 C.P.R. (3d) 43 (F.C.T.D.); application for reconsideration denied (1986), 11 C.P.R. (3d) 62; affirmed (1986), 12 C.P.R. (3d) 95 (F.C.A.); leave to appeal to Supreme Court of Canada refused (1987), 14 C.P.R. (3d) 447.

This appeal, however, represents more than a private law skirmish about the economic and health interests of Canadians. At least one aspect of that issue was supposedly resolved by Parliament when it enacted the Patent Act Amendment Act, 1992, S.C. 1993, c. 2, amending [Patent Act] R.S.C., 1985, c. P-4, (“Bill C-91”) with the intent of thwarting the possible appropriation by generic drug companies, such as Apotex, of the research and development initiatives of innovators, such as Merck. The principal issue we must address here is the effect of Bill C-91 on what Apotex argues is a vested right to the NOC. The enactment of Bill C-91 between the date that Apotex’s mandamus application was filed and the date it was heard, together with the Minister’s continuing failure to issue the Apo-Enalapril NOC, were the legal catalysts which propelled both Apotex and Merck into the courtrooms of the Trial and Appeal Divisions of this Court.

Aside from reviewing the traditional requirements for mandamus, this Court must determine whether the Minister could withhold the NOC on the basis of the then unproclaimed provisions of Bill C-91. Alternatively, it is asked whether the delay occasioned by the need to obtain legal advice with respect to the legality of issuing the NOC prevented Apotex from acquiring a vested right to the NOC. Now that Bill C-91 is law, Merck argues that Apotex must comply with its provisions which, if applicable, clearly deny Apotex that which it seeks. Moreover, Merck submits that this Court has the discretion to refuse mandamus where the effect would be to “frustrate the will of Parliament.” That argument essentially invites this Court to consider what has been labelled the “balance of convenience” test in evaluating Apotex’s mandamus application. These issues, among others, may only be addressed against the legislative framework in place at the time Apotex submitted its NOC application and that currently in effect.

LEGISLATIVE FRAMEWORK

In part, this appeal hinges on the scope of ministerial discretion as set out in the Food and Drugs Act, R.S.C., 1985, c. F-27, (the “FDA”) and the regulations enacted pursuant to that Act (the “FDA Regulations”) [Food and Drug Regulations, C.R.C., c. 870]. The responsibility for administering the FDA rests principally with the Health Protection Branch of the Department of National Health and Welfare (the “HPB”).

Under the FDA, the Minister must ensure that “new drugs” meet health and safety requirements. A “new drug” is defined in section C.08.001 of the FDA Regulations as a drug which contains a substance which has not been sold in Canada for a sufficient time and in sufficient quantity to establish its safety and effectiveness.

A “new drug” must undergo rigorous testing before it may be sold. The manufacturer of the drug must file a New Drug Submission (“NDS”) with the HPB setting out, inter alia, the drug’s qualities, ingredients and methods of manufacture and purification. The NDS also includes the results of the manufacturer’s clinical studies supporting the drug’s safety and effectiveness. All aspects of the NDS are examined by multidisciplinary teams of the Drugs Directorate of the HPB. A NOC will only issue if the drug is found to be both effective and safe for human use. The relevant provisions [C.08.002 (as am. by SOR/85-143, s. 1), C.08.004 (as am. idem, s. 3, SOR/88-257, s. 1)] of the FDA Regulations state:

C.08.002. (1) No person shall sell or advertise for sale a new drug unless

(a) the manufacturer of the new drug has filed with the Minister, in duplicate, a new drug submission relating to that new drug, having a content satisfactory to the Minister;

(b) the Minister has issued a notice of compliance to the manufacturer of the new drug in respect of that new drug submission pursuant to section C.08.004;

(c) that notice of compliance is not suspended pursuant to section C.08.006 ...

...

C.08.004. (1) The Minister shall, after completing an examination of a new drug submission or supplement thereto,

(a) if that submission or supplement complies with the requirements of section C.08.002 or C.08.003, as the case may be, and section C.08.005.1, issue a notice of compliance .... [Emphasis added.]

Prior to the proclamation of Bill C-91, a generic drug company could obtain a compulsory licence from the Commissioner of Patents authorizing it to advertise, manufacture and sell any drug in respect of which a NOC had been issued. Although the generic drug company was required to pay royalties to the drug’s innovator, it could sell the drug notwithstanding the innovator’s patent rights. This arrangement was governed by subsection 39(4) of the Patent Act, R.S.C., 1985, c. P-4, (the “Patent Act”):

39. ...

(4) Where, in the case of any patent for an invention intended or capable of being used for medicine or for the preparation or production of medicine, an application is made by any person for a licence to do one or more of the following things as specified in the application, namely,

(a) where the invention is a process, to use the invention for the preparation or production of medicine, import any medicine in the preparation or production of which the invention has been used or sell any medicine in the preparation or production of which the invention has been used, or

(b) where the invention is other than a process, to import, make, use or sell the invention for medicine or for the preparation or production of medicine,

the Commissioner shall grant to the applicant a licence to do the things specified in the application except such, if any, of those things in respect of which he sees good reason not to grant a licence.

Subsection 39(14) of the Patent Act required the Commissioner of Patents to notify the Department of National Health and Welfare of all compulsory licence applications. To this extent, there was a “linkage” between NOCs and patent rights.

Bill C-91 was drafted in order to protect innovator pharmaceutical companies’ distribution and sales rights to patented drugs and represents a reversal of government policy adopted by Parliament in 1923: see The Patent Act, S.C. 1923, c. 23, section 17; but compare Order in Council respecting patents of invention held by alien enemies [Orders and Regulations respecting Patents of Invention made under The War Measures Act, 1914], P.C. 1914-2436, The Canada Gazette, October 10, 1914, enacted pursuant to the War Measures Act, 1914 (The), S.C. 1914, (2nd Sess.), c. 2. Bill C-91 was introduced in the House of Commons on June 23, 1992 and passed its third reading on December 10, 1992. It was given Royal Assent on February 4, 1993.[1]

The immediate effects of Bill C-91 are well known. Section 3 of the Bill repealed the compulsory licensing provisions of the Patent Act, while subsection 12(1) extinguished all compulsory licences issued on or after December 20, 1991, as follows:

12. (1) Every licence granted under section 39 of the former Act on or after December 20, 1991 shall cease to have effect on the expiration of the day preceding the commencement day, and all rights or privileges acquired or accrued under that licence or under the former Act in relation to that licence shall thereupon be extinguished.

Section 4 of the Bill adds section 55.2 to the Patent Act. Subsection 55.2(4) authorizes the Governor in Council to make regulations concerning, inter alia, the issuance of NOCs, as follows:

55.2 ...

(4) The Governor in Council may make such regulations as the Governor in Council considers necessary for preventing the infringement of a patent by any person who makes, constructs, uses or sells a patented invention in accordance with subsection (1) or (2) including, without limiting the generality of the foregoing, regulations

(a) respecting the conditions that must be fulfilled before a notice, certificate, permit or other document concerning any product to which a patent may relate may be issued to a patentee or other person under any Act of Parliament that regulates the manufacture, construction, use or sale of that product, in addition to any conditions provided for by or under that Act;

(b) respecting the earliest date on which a notice, certificate, permit or other document referred to in paragraph (a) that is issued or to be issued to a person other than the patentee may take effect and respecting the manner in which that date is to be determined;

(c) governing the resolution of disputes between a patentee or former patentee and any person who applies for a notice, certificate, permit or other document referred to in paragraph (a) as to the date on which that notice, certificate, permit or other document may be issued or take effect;

(d) conferring rights of action in any court of competent jurisdiction with respect to any disputes referred to in paragraph (c) and respecting the remedies that may be sought in the court, the procedure of the court in the matter and the decisions and orders it may make; and

(e) generally governing the issue of a notice, certificate, permit or other document referred to in paragraph (a) in circumstances where the issue of that notice, certificate, permit or other document might result directly or indirectly in the infringement of a patent.

On February 12, 1993, the Governor in Council fixed February 15 as the date Bill C-91, with the exception of section 55.2, would come into force. On March 12, 1993, that section and the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133, (the “Patented Medicines Regulations”) were brought into effect.

The Patented Medicines Regulations prohibit the issuance of NOCs in respect of “patent-linked” drugs. A “patent-linked” drug is one in respect of which both a NOC and an unexpired patent have been issued. The patent may relate to either the medicine itself or the method of using the drug to treat an illness.

Subsections 5(1) and (2) of the Patented Medicines Regulations refer to NDSs filed before March 12, 1993 (the date the Regulations were brought into effect) and read as follows:

5. (1) Where a person files or, before the coming into force of these Regulations, has filed a submission for a notice of compliance in respect of a drug and wishes to compare that drug with, or make reference to, a drug that has been marketed in Canada pursuant to a notice of compliance issued to a first person in respect of which a patent list has been submitted, the person shall, in the submission, with respect to each patent on the patent list,

(a) state that the person accepts that the notice of compliance will not issue until the patent expires; or

(b) allege that

(i) the statement made by the first person pursuant to paragraph 4(2)(b) is false,

(ii) the patent has expired,

(iii) the patent is not valid, or

(iv) no claim for the medicine itself and no claim for the use of the medicine would be infringed by the making, constructing, using or selling by that person of the drug for which the submission for the notice of compliance is filed.

(2) Where, after a second person files a submission for a notice of compliance, but before the notice of compliance is issued, a patent list is submitted or amended in respect of a patent pursuant to subsection 4(5), the second person shall amend the submission to include, in respect of that patent, the statement or allegation that is required by subsection (1).

Subsection 7(1) of the Patented Medicines Regulations prohibits the Minister from issuing a NOC to generic drug companies who have not complied with section 5 of the Regulations.

One of the principal issues on appeal is whether the above provisions apply to Apotex’s NDS. In this regard, Merck notes that Parliament specifically introduced a special paramountcy rule in subsection 55.2(5) of the Patent Act to explicitly reinforce the objective of Bill C-91:

55.2 ...

(5) In the event of any inconsistency or conflict between

(a) this section or any regulations made under this section, and

(b) any Act of Parliament or any regulations made thereunder,

this section or the regulations made under this section shall prevail to the extent of the inconsistency or conflict. [Emphasis added.]

FACTS

There are two factual matters in dispute. In addition, one factual matter—the precise reason or reasons underlying the Minister’s failure to issue the NOC—has apparently eluded the parties’ consideration. The import of this gap will be evaluated following an outline of the commonly-held facts giving rise to this appeal.

(a)       Common Ground

On July 3, 1989, the Minister delegated the authority to sign NOCs to persons occupying the positions of Assistant Deputy Minister (“ADM”) and Director General of the Drugs Directorate. Throughout the relevant period in this appeal, Kent Foster was the ADM and the only person to whom the Minister’s authority to sign NOCs had devolved.

Apotex submitted a NDS in respect of Apo-Enalapril on February 15, 1990.[2] Eight months later, on October 16, 1990, Merck was granted a seventeen-year patent in respect of enalapril to expire on October 16, 2007.

Bill C-91 received third reading on December 10, 1992. On December 22, thirty-four months after filing its NDS, Apotex initiated an application for judicial review against the Minister in which it sought an order in the nature of mandamus in respect of the Apo-Enalapril NOC.

Apotex’s NDS was incomplete when it filed its mandamus application. The HPB had notified Apotex in writing of the deficiencies in the bio-equivalence portion of the Apo-Enalapril NDS on July 20, 1992 and did not receive all of the required information from Apotex until January 11, 1993. Additional information concerning the chemistry and manufacturing portion of the NDS was also requested and received from Apotex. Finally, on February 2, 1993, the HPB requested clean product monographs, which were provided on February 3, 1993. As of that date Apotex’s NDS satisfied both the clinical and the chemistry and manufacturing requirements prescribed in the FDA Regulations. In other words, by February 3, 1993, Apo-Enalapril met all of the scientific safety and efficacy conditions required for a NOC to issue.

Two events relevant to this appeal transpired on February 4, 1993: Bill C-91 received Royal Assent and the Apo-Enalapril NOC was placed on Foster’s desk for signature. Foster admitted that the NDS had “cleared the scientific and regulatory review process” and that he and the ADM of National Pharmaceutical Strategy were of the view that the NOC ought to issue. However, Foster had been advised by the Minister’s Chief of Staff on January 21, 1993 that he should keep the Minister apprised of any “patent-linked” NDSs in view of the impending passage of Bill C-91. In a note accompanying the Apo-Enalapril NOC, the ADM of National Pharmaceutical Strategy intimated that the Apo-Enalapril NOC was one in respect of which Foster’s signing authority had been effectively fettered.

Foster did not see the NOC-related documents until approximately 6:00 p.m. on February 4. On the next day, because of the fetter placed on his authority and aware of Apotex’s court application, he contacted his Deputy Minister. Together they decided to seek legal advice regarding the authority of the Minister or Foster to issue the Apo-Enalapril NOC in light of the passage of Bill C-91. Later that day, the president of Merck telephoned Foster, indicating that Foster was obligated to refrain from issuing the NOC. On February 8, 1993, the Department of National Health and Welfare sought and obtained legal opinions from outside counsel and the Department of Justice regarding the Minister’s authority to issue the NOC. The substance of these opinions has not been released on the ground of privilege.[3]

Between February 12 and February 23, 1993, Merck forwarded eight legal opinions obtained from private law firms to the Minister. Those opinions supported Merck’s position that it would be inappropriate and even unlawful for the Minister or Foster to issue a NOC in respect of Apo-Enalapril. To make sense of this flurry of unsolicited opinions, Foster sought further legal advice on February 24, 1993. He stated:

My concern was that whatever action I took or did not take might have the Minister, by virtue of my delegated authority, contravening the law. I didn’t know the answer to that and I wanted the answer to that.

To dispel any doubt harboured by the Minister and his staff, Merck submitted additional legal opinions which substantively reiterated those previously sent. Between February 12 and March 5, 1993, Merck provided the Government with a total of seventeen legal opinions. All were placed before the Trial Judge and this Court. None support Apotex’s position that the Minister did not have the right to consider impending government policy in denying Apotex its NOC.

On February 22, 1993, Merck commenced an application for judicial review seeking, inter alia, a prohibition order preventing the Minister from issuing the Apo-Enalapril NOC. Apotex brought a motion for judgment directing the Minister to issue this NOC on March 4, 1993. On March 9, 1993, the Minister sought and received an adjournment of the Apotex application until March 16, 1993.[4] On March 12, 1993, subsection 55.2(4) of the Patent Act and the Patented Medicines Regulations came into effect.

On March 18, 1993, the applications of Merck and Apotex were consolidated by order of a Trial Judge. They were heard on June 21, 1993. On July 16, 1993, Dubé J. allowed Apotex’s application for mandamus and denied Merck’s application for prohibition [Apotex Inc. v. Canada (Attorney-General) (1993), 49 C.P.R. (3d) 161].

(b)       Disputed Facts

In oral argument, Merck sought to establish that the Minister was still investigating allegations that Apo-Enalapril was unsafe after February 4, 1993. The HPB has apparently determined these allegations to be unfounded and, in any event, they are contrary to the Minister’s position at trial that Apo-Enalapril had met all the criteria and conditions prescribed by the existing FDA Regulations by February 3, 1993 (Apotex, supra, at page 176).

By counter-offensive, Apotex suggested that the Minister did not fairly consider the NDS. It alleged that other “patent-linked” generic NDSs were being approved while Apotex’s NOC was being delayed. (From the appeal record, I note that Merck had accused the Minister of “accelerating” the processing of Apotex’s NDS.) The Trial Judge acknowledged the issue but did not address it, either because it was unnecessary or because it was not deserving of attention (at page 170). Apotex did not launch a cross-appeal with respect to this issue.

(c)        The Factual Lacuna

Only the Minister possessed the discretionary power to issue a NOC to Apotex once the NDS review was completed. Neither he nor Foster signed the NOC. However, the Minister’s reasons for failing to issue the NOC are unclear.

Merck first maintains that there is no evidence the NOC had been formally presented to the Minister for his consideration, a fact acknowledged by the Trial Judge (appellants’ memorandum of fact and law, paragraph 42, Apotex, supra, at pages 167-168). It also seeks to establish that the Minister was entitled to have regard to pending legislative policy in issuing the NOC (appellants’ memorandum of fact and law, paragraph 67). The former submission implies that the Minister had not yet had the opportunity to review Apotex’s application. The inference to be drawn from the latter is that, not only did the Minister review the NDS, but his lawful consideration of pending government legislation was one reason why the NOC did not issue. There is no evidence that the Minister received, much less acted upon, the legal advice sought on February 24, 1993.

Regrettably, no one has sought to elicit from the Minister the very reason or reasons underlying his failure to authorize the NOC prior to March 12, 1993.[5] Upon reflection, we are left with the following possibilities (there are others): Was the Minister still in search of the “definitive” legal opinion? Did he not have the opportunity to review the NDS? Or did the Minister conclude that as a matter of law the NOC could not issue? Since Apotex has neither impeached the motives of the Minister nor argued unreasonable delay, I am left with the legal arguments pursued by the parties.

DECISION UNDER APPEAL

At trial, Dubé J. perceived the central issue to be whether the Minister, prior to March 12, 1993, possessed the discretionary power to decline to issue the NOC to Apotex on the basis of anticipated changes to the Patent Act. He concluded (at page 177):

In my view, there can be no doubt that the FDR did entitle the Minister to exercise his discretion in the Apotex NDS approval process. However, this discretion, like all discretionary authority, was not unfettered. The scope of the Minister’s discretion was limited strictly to a consideration of factors relevant to the purposes of the FDR as they relate to the process for approval of new drugs to be marketed in Canada.... It was limited to a decision as to whether the HPB review of the Apotex NDS established that Apo-enalapril was safe and effective. Once that question had been answered in the affirmative, as it was in this case, any other extraneous consideration was irrelevant to the issuance of a NOC under the FDR.

The Minister was not entitled to refuse to issue a NOC to Apotex on the basis of anticipated changes to the patent statute and regulations thereunder, an area within the authority of his colleague, the Minister of Consumer and Corporate Affairs.

The learned Judge found support for his position in three decisions of the Trial Division of this Court. First, he applied the reasoning of MacKay J. in Apotex Inc. v. Canada (Attorney General) et al. (1993), 59 F.T.R. 85, where it was held (at pages 108-109):

[T]he words “having a content satisfactory to the Minister” qualify the words “new drug submission” so that in every case the content of a submission is a matter within the discretion of the Minister and those acting on his or her behalf to determine.

...

[T]he Regulations vest complete and exclusive discretion in the respondent Minister and the Director of HPB to determine the requirements of a new drug submission in terms of the information or evidence to be provided by the manufacturer. [Emphasis not in original.]

The second decision is Glaxo Canada Inc. v. Canada (Minister of National Health and Welfare), supra, where Rouleau J. concluded (at page 426):

The central purpose of the Regulations is to ensure that any new drug meets rigorous safety profile standards in order to protect the Canadian public. If, upon review, the Minister finds the new drug submission to be satisfactory, he is compelled to issue a notice of compliance....

Finally, Dubé J. turned to the decision of Muldoon J. in C.E. Jamieson & Co. (Dominion) v. Canada (Attorney General), [1988] 1 F.C. 590 (T.D.), in which the Trial Judge held (at page 651):

[W]hatever discretion is accorded by these clear and detailed Regulations is quite restricted .... Under regulation C.08.004 the Minister is bound either to issue a notice of compliance or to notify the manufacturer why the submission ... does not comply .... The Minister is subject to the Court’s supervising power to order mandamus in that regard .... These delegated powers do not permit the Minister or the Director to do as they please: they have no unfettered discretions.

Dubé J. had little difficulty in deciding that the Minister did not possess the broad discretion to justify his refusal to issue the NOC. It remained to be determined whether the Minister and his delegate, Foster, were entitled to seek legal advice and otherwise delay issuing the NOC. Dubé J. observed that the Minister did not know, either when Bill C-91 was passed or when it was proclaimed, that the Patented Medicines Regulations would come into force on March 12, 1993. In other words, the delay in determining whether the NOC could issue may have been considerably protracted. Acceding to Foster’s pragmatic observation that “either the law is in effect or it isn’t” the Trial Judge concluded “that the Minister’s delay in issuing the Apotex NOC was not warranted” (at page 181).

Dubé J. went on to reject the argument that issuing mandamus in cases where new regulatory regimes are clearly pending would “frustrate the will of Parliament.” He cautioned that the line of municipal law cases commencing with the Supreme Court’s decision in Ottawa, City of v. Boyd Builders Ltd., [1965] S.C.R. 408 should not be “transported facilely to an entirely unrelated legal context” (at page 181).

Finally, the learned Trial Judge rejected the argument that Apotex’s claim for mandamus was premature because its NDS was incomplete when the application was filed. He reasoned (at page 182):

Before closing, I take the opportunity to dispose of a “preliminary” matter raised by Merck, that Apotex’ December 22, 1992 originating notice of motion was premature because, as of that date, the Apo-enalapril NDS was incomplete. According to the terms of the notice of motion, Apotex sought an order directing the Minister to disclose the status of a number of NDS filed by Apotex, including that for Apo-enalapril; to complete the reviews of these submissions, should they not have been completed; and to issue NOCs “if the results of the reviews are satisfactory”. Thus, Apotex was not requesting relief divorced from the normal requirements of the FDR, or “jumping the gun”. And, as of February 3, 1993, long before this matter came on for hearing, the results of the Apo-enalapril NDS has been recommended for issuance of a NOC. The argument based on prematurity must therefore fail.

For the above reasons, the application for mandamus was allowed and the application for prohibition denied.

ISSUES RAISED ON APPEAL

An appeal provides both parties with the opportunity to reflect on, refine and reformulate substantive arguments which may or may not have been pursued below. The following issues were identified by Merck in its memorandum of fact and law and addressed on appeal:

(1) Does mandamus lie against the Minister on the facts of this case?

(2) Was the Minister entitled to seek advice after February 4, 1993 about the legality of what Apotex was asking him to do, plus any other relevant information that may have occurred to him?

(3) In the exercise of his statutory power under the Food and Drug Regulations, was the Minister entitled to have regard to the provisions of Bill C-91 after they were enacted but before they were proclaimed in effect?

(4) Was the Minister acting unlawfully when he failed to reach a decision on the NOC application by March 12, 1993?

(5) If so, was the effect to give Apotex a “vested right” to the issuance of an NOC prior to March 12, 1993?

(6) If Apotex had acquired a “vested” right prior to March 12, 1993, was such right nevertheless divested by the Patented Medicines (Notice of Compliance) Regulations?

(7) Did the rights and remedies created by Bill C -91 and the Patented Medicines (Notice of Compliance) Regulations oust the jurisdiction of this Court from and after March 12, 1993 to grant judicial review in the circumstances of this case to compel issuance of the notice of compliance?

(8) Do the principles set out in Ottawa, City of v. Boyd Builders Ltd., [1965] S.C.R. 408 apply to the exercise of the Court’s discretion in mandamus cases generally, or are they confined to building permit cases?

(9) If Apotex is otherwise entitled to the issuance of mandamus, is this a case in which the Court ought to have exercised its discretion (which Dubé J. believed he did not possess) against Apotex in light of the public policy enunciated in Bill C-91 and the Regulations?

(10) Does prohibition lie against the Minister on the facts of this case?

By cross-appeal, the Minister argues that the Trial Judge erred in finding the delay in issuing the NOC to be unwarranted. Like Merck he remains convinced that as a matter of law the NOC cannot issue.

ANALYSIS

Most issues raised by counsel concern the availability of orders in the nature of mandamus. I propose to outline in general terms the principles governing such orders before clarifying those issues central to this appeal.

(1)       Mandamus—The Principles

Several principal requirements must be satisfied before mandamus will issue. The following general framework finds support in the extant jurisprudence of this Court (see generally O’Grady v. Whyte, [1983] 1 F.C. 719 (C.A.), at pages 722-723, citing Karavos v. Toronto & Gillies, [1948] 3 D.L.R. 294 (Ont. C.A.), at page 297; and Mensinger v. Canada (Minister of Employment and Immigration), [1987] 1 F.C. 59 (T.D.), at page 66.

1. There must be a public legal duty to act: Minister of Employment and Immigration v. Hudnik, [1980] 1 F.C. 180 (C.A.); Jefford v. Canada, [1988] 2 F.C. 189 (C.A.); Winegarden v. Public Service Commission and Canada (Minister of Transport) (1986), 5 F.T.R. 317 (F.C.T.D.); Rossi v. The Queen, [1974] 1 F.C. 531 (T.D.); Canadian Wildlife Federation Inc. v. Canada (Minister of the Environment), [1989] 3 F.C. 309 (T.D.); affd [1990] 2 W.W.R. 69 (F.C.A.); Bedard v. Correctional Service of Canada, [1984] 1 F.C. 193 (T.D.); Carota v. Jamieson, [1979] 1 F.C. 735 (T.D.); affd [1980] 1 F.C. 790 (C.A.); and Nguyen v. Canada (Minister of Employment and Immigration), [1994] 1 F.C. 232 (C.A.).

2. The duty must be owed to the applicant:[6] Rothmans of Pall Mall Canada v. Minister of National Revenue (No. 1), [1976] 2 F.C. 500 (C.A.); Distribution Canada Inc. v. M.N.R., [1991] 1 F.C. 716 (T.D.); affd [1993] 2 F.C. 26 (C.A.); Secunda Marine Services Ltd. v. Canada (Minister of Supply & Services) (1989), 38 Admin. L.R. 287 (F.C.T.D.); and Szoboszloi v. Chief Returning Officer of Canada, [1972] F.C. 1020 (T.D.); see also Jefford v. Canada, supra.

3. There is a clear right to performance of that duty, in particular:

(a) the applicant has satisfied all conditions precedent giving rise to the duty; O’Grady v. Whyte, supra; Hutchins v. Canada (National Parole Board), [1993] 3 F.C. 505 (C.A.); and see Nguyen v. Canada (Minister of Employment and Immigration), supra;

(b) there was (i) a prior demand for performance of the duty; (ii) a reasonable time to comply with the demand unless refused outright; and (iii) a subsequent refusal which can be either expressed or implied, e.g. unreasonable delay; see O’Grady v. Whyte, supra, citing Karavos v. Toronto & Gillies, supra; Bhatnager v. Minister of Employment and Immigration, [1985] 2 F.C. 315 (T.D.); and Canadian Wildlife Federation Inc. v. Canada (Minister of the Environment), supra.

4. Where the duty sought to be enforced is discretionary, the following rules apply:

(a) in exercising a discretion, the decision-maker must not act in a manner which can be characterized as “unfair”, “oppressive” or demonstrate “flagrant impropriety” or “bad faith”;

(b) mandamus is unavailable if the decision-maker’s discretion is characterized as being “unqualified”, “absolute”, “permissive” or “unfettered”;

(c) in the exercise of a “fettered” discretion, the decision-maker must act upon “relevant”, as opposed to “irrelevant”, considerations;

(d) mandamus is unavailable to compel the exercise of a “fettered discretion” in a particular way; and

(e) mandamus is only available when the decision-maker’s discretion is “spent”; i.e., the applicant has a vested right to the performance of the duty.

See Restrictive Trade Practices Commission v. Director of Investigation and Research, Combines Investigation Act, [1983] 2 F.C. 222 (C.A); revg [1983] 1 F.C. 520 (T.D.); Carota v. Jamieson, supra; Apotex Inc. v. Canada (Attorney General) et al., supra; Maple Lodge Farms Ltd. v. Government of Canada, [1980] 2 F.C. 458 (T.D.); affd [1981] 1 F.C. 500 (C.A.); affd [1982] 2 S.C.R. 2; Jefford v. Canada, supra; Merck & Co. Inc. v. Sherman & Ulster Ltd., Attorney-General of Canada, Intervenant (1971), 65 C.P.R. 1 (Ex. Ct.); appeal dismissed [1972] S.C.R. vi; Distribution Canada Inc. v. M.N.R., supra; and Kahlon v. Canada (Minister of Employment and Immigration), [1986] 3 F.C. 386 (C.A.).

5. No other adequate remedy is available to the applicant: Carota v. Jamieson, supra; Maple Lodge Farms Ltd. v. Government of Canada, supra; Jefford v. Canada, supra; Harelkin v. University of Regina, [1979] 2 S.C.R. 561; and see Canada (Auditor General) v. Canada (Minister of Energy, Mines and Resources), [1987] 1 F.C. 406 (C.A.); appeal dismissed [1989] 2 S.C.R. 49.

6. The order sought will be of some practical value or effect: Friends of the Oldman River Society v. Canada (Minister of Transport), [1990] 2 F.C. 18 (C.A.), per Stone J.A., at pages 48-52; affd [1992] 1 S.C.R. 3, per La Forest J., at pages 76-80; Landreville v. The Queen, [1973] F.C. 1223 (T.D.); and Beauchemin v. Employment and Immigration Commission of Canada (1987), 15 F.T.R. 83 (F.C.T.D.).

7. The Court in the exercise of its discretion finds no equitable bar to the relief sought: Penner v. Electoral Boundaries Commission (Ont.), [1976] 2 F.C. 614 (T.D.); Friends of the Oldman River Society v. Canada (Minister of Transport), supra.

8. On a “balance of convenience” an order in the nature of mandamus should (or should not) issue.

In this appeal, it is understood that the Minister had a duty to act which was owed to Apotex and not the Crown. Merck has not sought to show that Apotex is disentitled in equity to the relief sought. Nor has it sought to establish that an order of mandamus would be ineffectual. On the other hand, it argues that Apotex’s application was premature to the extent that not all conditions precedent had been satisfied at the time the application was initiated. As well, it contends that an alternative and adequate remedy is available to Apotex. Aside from the balance of convenience issue noted earlier, the remaining issues central to this appeal may be stated as follows: Did Apotex have a vested right to the NOC as of March 12, 1993? If Apotex did have such a right, was that right divested by the Patented Medicines Regulations? Does the paramountcy provision in Bill C-91 oust the jurisdiction of this Court to grant the order sought by Apotex?

(2)       An Alternative and Adequate Remedy

Bill C-91 authorizes Apotex to challenge the validity of Merck’s patent. If successful, not only would Apotex be entitled to the NOC but Merck would be liable in damages for wrongfully delaying its issue (see section 6, Patented Medicines Regulations). Accordingly, Merck argues that compliance with the existing legislation is of itself an adequate remedy. This reasoning, of course, merely begs the question. I would note that Merck has not sought to establish that an order of mandamus would itself be ineffectual. Conversely, Apotex has not sought to show that Merck has a more adequate remedy—an action for patent infringementas an alternative to its application for prohibition.

(3)       Prematurity

Merck takes the position that the Minister owed no duty to Apotex at the time it commenced its judicial review application on December 22, 1992 or on the hearing date. This submission is certainly correct in part. The Minister owed no duty to Apotex on December 22; the HPB’s review of Apotex’s NDS was ongoing at that time. Merck maintains that filing an application before a duty is owed constitutes a bar to mandamus. It relies on Karavos v. Toronto & Gillies, supra, a decision of the Ontario Court of Appeal which has been cited with approval by this Court in O’Grady v. Whyte, supra, per Urie J.A., at page 722. In Karavos, Laidlaw J.A. stated (at page 297):

I do not attempt an exhaustive summary of the principles upon which the Court proceeds on an application for mandamus, but I shall briefly state certain of them bearing particularly on the case presently under consideration. Before the remedy can be given, the applicant for it must show (1) “a clear, legal right to have the thing sought by it done, and done in the manner and by the person sought to be coerced”: High op. cit., p. 13, art. 9; p. 15, art 10. (2) “The duty whose performance it is sought to coerce by mandamus must be actually due and incumbent upon the officer at the time of seeking the relief, and the writ will not lie to compel the doing of an act which he is not yet under obligation to perform”; ibid., supra, p. 44, art. 36. (3) That duty must be purely ministerial in nature, “plainly incumbent upon an officer by operation of law or by virtue of his office, and concerning which he possesses no discretionary powers”: ibid., supra, p. 92, art. 80. (4) There must be a demand and refusal to perform the act which it is sought to coerce by legal remedy: ibid., supra, p. 18, art. 13. [Emphasis added.]

Merck seeks to extract from the phrase “at the time of seeking the relief” a rule of law to the effect that mandamus must be denied if a duty to act is not owing at the time the application for mandamus is filed. In my view, such a rule would be extremely short-sighted and finds no support in the facts of either Karavos or O’Grady.

In Karavos, the applicant sought an order of mandamus compelling the issue of a building permit even though he had not submitted his permit application as of the hearing date. Similarly in O’Grady, the applicant failed to submit an application for “landing” as of the date when an immigration officer was required to decide upon his sponsorship application. In both cases, it was held that the absence of the required application was fatal to the granting of mandamus.

The legal principle derived from these two cases is simply stated. An order of mandamus will not lie to compel an officer to act in a specified manner if he or she is not under an obligation to act as of the hearing date. The question remains whether the rule retains its validity if applied as of the date that the application for mandamus was filed. In my opinion, it cannot.

In its application Apotex requested the Court to issue two directives. First, it asked that the Minister process the NDS which had been submitted some thirty-four months prior to the mandamus application. Second, it sought an order directing the issuance of the NOC once the NDS review process was complete.

Whether or not the application for mandamus had the effect of propelling the HPB into action is a matter for speculation. We do know that safety and efficacy requirements for the Apo-Enalapril NOC had been met by February 3. We also know that an application to strike the mandamus application was made on January 27, 1993 by the Minister and the Attorney General of Canada. That application was apparently dismissed from the Bench for reasons which are not apparent on the face of the record (see Appeal Book, Vol. I, Tabs 4 & 5).

As a general proposition, it is not difficult to accept a rule which seeks to eliminate premature applications for mandamus. It is certainly open to a respondent to pursue dismissal of an application where the duty to perform has yet to arise. However, unless compelling reasons are offered, an application for an order in the nature of mandamus should not be defeated on the ground that it was initiated prematurely. Provided that the conditions precedent to the exercise of the duty have been satisfied at the time of the hearing, the application should be assessed on its merits. Those who unnecessarily complicate the proceedings may expose themselves to costs even if successful. For the foregoing reasons this submission must fail.

(4)       Discretion Spent—Vested Rights

Simply stated, this Court must decide whether Apotex is entitled to the advantages of the “old” law or bound to accept the disadvantages arising from the “new”. The traditional approach to this issue focusses on whether the decision-maker reached a decision before the intervening legislation came into effect. In other words, did Apotex acquire a vested right to the NOC by March 12, 1993?

If a decision-maker has an unfettered discretion which he or she has not exercised as of the date a new law takes effect, then the applicant cannot successfully assert either a vested right or even the right to have the decision-maker render a decision. This is the ratio of the Judicial Committee of the Privy Council in Director of Public Works v. Ho Po Sang, [1961] A.C. 901. In that case, the Court distinguished a “vested right” from a “mere hope or expectation” and determined that an applicant for a rebuilding permit had only a mere hope or expectation that the permit would be granted at the time that repealing legislation came into force. Ho Po Sang has been applied by the Exchequer Court in Merck & Co. Inc. v. Sherman& Ulster Ltd., Attorney-General of Canada, Intervenant, supra. These cases provide the necessary background for an appreciation of the principles underlying the “vested rights” issue.

In Ho Po Sang, the lessee of Crown lands in Hong Kong was entitled by Ordinance to vacant possession of buildings occupied by sub-lessees on the condition that he erect new buildings and receive approval from the Director of Public Works. The legislation also exempted the lessee from compensating the sub- lessees with respect to termination of their tenancies. On July 20, 1956, the Director purported to give the lessee the required certificate. Upon receipt of their notices to quit the premises, the sub-lessees launched an appeal to the Governor in Council. The lessee immediately cross-appealed. On April 9, 1957, after the appeal had been initiated, the relevant provisions of the Ordinance were repealed to provide tenants with the right to compensation. As of that date the Governor in Council had not reached a decision.

The issue on appeal was whether on April 9, 1957, the lessee possessed “rights” under the Ordinance which remained unaffected by the repeal. The Privy Council based its conclusion on the “absolute” discretion which the Ordinance accorded the Governor in Council: “[The lessee] had no more than a hope that the Governor in Council would give a favourable decision” (at pages 920-921). The lessee’s argument that he had an accrued right unaffected by the repeal to have the matter considered by the Governor in Council was rejected on the same grounds.

The decision of Thurlow J. (as he then was) in Merck & Co. Inc. v. Sherman & Ulster Ltd., Attorney-General of Canada, Intervenant, supra, provides guidance in determining whether Apotex had a vested right to the NOC rather than a mere hope or expectation. The issue in that case was whether the Commissioner of Patents erred in fixing the royalty payable to Merck by Sherman under a compulsory licence. Sherman had submitted its patent specifications and the Commissioner had assessed the royalty on the basis of subsection 41(3) of the Patent Act, R.S.C. 1952, c. 203. That subsection was subsequently repealed and replaced with subsection 41(4) (S.C. 1968-69, c. 49, s. 1). The Commissioner did not hear the parties’ oral arguments or receive their written submissions until after these amendments came into effect. The issue before the Trial Judge was straightforward: Which statutory provision was applicable when fixing the royalty—the old or the new? After a careful analysis of competing provisions of the Interpretation Act, R.S.C. 1952, c. 158, Thurlow J. concluded that the “new” subsection 41(4) prevailed. His reasoning bears directly on the “vested rights” issue.

Paragraph 37(c) of the Interpretation Act, S.C. 1967-68, c. 7 (now Interpretation Act, R.S.C., 1985, c. I-21, paragraph 44(c)) considered the effect of proceedings commenced under a “former enactment” and was relied upon by Merck to sustain its argument that the proceedings could only be continued in accordance with the new provision. That section read as follows:

37. Where an enactment (in this section called the “former enactment”) is repealed and another enactment (in this section called the “new enactment”) is substituted therefor

...

(c) every proceeding taken under the former enactment shall be taken up and continued under and in conformity with the new enactment so far as it may be done consistently with the new enactment;

The respondent Sherman relied on paragraph 36(c) (now paragraph 43(c)) of the Interpretation Act in support of its argument that it had an “accrued” or “accruing” right as of the date of its application for the compulsory licence.[7] Paragraph 36(c) read:

36. Where an enactment is repealed in whole or in part, the repeal does not

...

(c) affect any right, privilege, obligation or liability acquired, accrued, accruing or incurred under the enactment so repealed;

...

and an investigation, legal proceeding or remedy as described in paragraph (e) may be instituted, continued or enforced, and the penalty, forfeiture or punishment may be imposed as if the enactment had not been so repealed.[8]

Following an extensive analysis of Ho Po Sang, Thurlow J. concluded (at page 12):

Here when s. 41(3) was repealed the procedure which the Commissioner had prescribed had not reached the stage where the matter was ready for decision, since the respondent’s reply to the counterstatement had not been filed and had indeed been delayed at the respondent’s request. But even if it had reached that stage and had been simply awaiting decision I do not think the respondent could properly be said to have had an accrued right either to a licence or to have the matter dealt with on the law as it had been. The Commissioner’s authority, as I see it, is not merely to deprive an applicant of a licence where he sees good reason to do so but is an authority to decide whether or not a licence should be granted to which is coupled a direction that the licence is to be granted in the absence of good reason for refusing it. The distinction is perhaps a fine or narrow one but it is for the Commissioner rather than the applicant to say whether or not there will be a licence and the applicant has no control over the decision which the Commissioner may make on the question. As in the Ho Po Sang case the question itself was unresolved and the issue rested in the future. I agree with the submission of counsel for the appellant that at the stage which the proceeding had reached what the respondent had (whether it was stronger or not, by reason of the statutory direction for reaching a decision which s. 41(3) prescribed, than what the respondent had in the Ho Po Sang case) was nothing more than a hope. Nor do I think what the respondent had at that stage can be regarded as an “accruing” right (or privilege) within the meaning of s. 36(c) since the difficulty lies not with the words “accrued” or “accruing” but with the lack of anything that answers to the description of the words “right” or “privilege” in s. 36(c).

In my opinion therefore s. 36(c) does not apply and the authority for continuing the proceeding commenced before the repeal is that contained in s. 37(c) of the Interpretation Act.

This analytical framework focusses the determination of whether Apotex had an “accrued” or “vested” right to the NOC. It is common ground that by February 4, 1993, “the matter was ready for decision”. The question is whether the Minister’s discretion with respect to the NOC had been spent as of that date.

Four issues are relevant to the determination of whether Apotex had a vested right to the NOC: (a) the scope of the Minister’s discretion; (b) the relevance of legal advice; (c) the relevance of “pending legislative policy”; and (d) whether the matter had reached the Minister for his consideration.

(a)       Ministerial Discretion—Narrow or Broad

The scope of a decision-maker’s discretion is directly contingent upon the characterization of various considerations as “relevant” or irrelevant to its exercise: see generally, R. A. Macdonald and M. Paskell-Mede, “Annual Survey of Canadian Law: Administrative Law” (1981), 13 Ottawa L. Rev. 671, at page 720. Merck argues that the Minister’s discretion under subsection C.08.002(1) of the FDA Regulations (“no person shall sell ... a new drug unless ... [the drug has] a content satisfactory to the Minister”) is, as a matter of statutory construction, sufficiently broad to embrace considerations other than those dealing with safety and efficacy. In my view, there is no merit in the submission. The law on this issue was carefully and extensively reviewed by the learned Trial Judge and three other judges of the Trial Division; see Glaxo Canada Inc. v. Canada (Minister of National Health and Welfare), supra; C.E. Jamieson & Co. (Dominion) v. Canada (Attorney-General), supra; and Apotex Inc. v. Canada (Attorney-General) et al., supra.

I am in agreement with the Trial Judge that the FDA Regulations restrict the factors to be considered by the Minister in the proper exercise of his discretion to those concerning a drug’s safety and efficacy. In reaching this conclusion, I am mindful of the two authorities cited by Merck. In Glaxo Canada Inc., supra, Rouleau J. stated that the “Minister’s determination is one made in contemplation of public health and represents the implementation of social and economic policy” (at page 439). This Court made similar observations in Pfizer Canada Inc. v. Minister of National Health & Welfare et al., supra, where MacGuigan J.A. stated that “the Minister’s determination was a decision made in contemplation of public health, and so amounted to an implementation of ‘social and economic policy in a broad sense,’ rather than application of `substantive rules’ to an individual case” (at page 440).

The above statements do not suggest that the Court was willing to overlook rudimentary canons of statutory construction. The matter to be resolved in Pfizer and on the Glaxo Canada appeal was the standing of the respective applicants.[9] In both cases, the drug in question had fulfilled the safety and efficacy requirements under the FDA Regulations. In both cases, the Court held that the NOC could issue. Viewed in this context, these cases do not detract from the reasoning of Dubé J. that the FDA Regulations neither expressly nor implicitly contemplate the broad scope of ministerial discretion advocated by Merck.

Apotex submits that the narrow scope of the Minister’s discretion necessarily implies that its right to the NOC crystallized as of February 4, 1993, or in any event, prior to March 12, 1993, when the Patented Medicines Regulations came into force. Merck contends that irrespective of how the discretion is construed, the Minister is residually entitled as a matter of law to have regard to considerations other than those touching on the safety and efficacy of Apo-Enalapril. Merck has identified the need to obtain legal advice and the pending changes to the Patent Act found within Bill C-91 (“pending legislative policy”) to be considerations relevant to the exercise of even a narrowly circumscribed discretion.

(b)       Legal Advice

Merck has essentially asked this Court to find that the time needed to enable a decision-maker to seek and obtain legal advice in any decision-making process is of itself a basis for denying mandamus. It also implies that confessed ignorance of a law upon which divergent judicial legal opinions have been expressed affects the public’s right to performance of a statutory duty. In my opinion, both submissions must be denied.

Merck’s only support for its argument is the House of Lords’ decision in Engineers’ and Managers’ Association v. Advisory, Conciliation and Arbitration Service, [1980] 1 W.L.R. 302 (H.L.). In that case, the House of Lords determined that a labour relations board had the power to suspend, for a period of over two years, its process relating to conflicting accreditation applications. The Board felt compelled to await the outcome of indirectly related court proceedings before reaching a decision. Merck would apply this decision to maintain that as the Minister was entitled to seek legal advice, he was under no obligation to issue the NOC prior to March 12, 1993. I do not agree.

First, the relevant statute in Engineers’ conferred upon the tribunal a significantly broader discretion than that accorded the Minister under the Patented Medicines Regulations. Second, the proceedings in that case were at a preliminary stage rather than at the final stage reached with Apotex’s NDS (both reasons were offered by Dubé J.: at page 180). Finally, unlike the case before us, in Engineers’ the delay caused by the need for legal clarification did not and could not automatically divest the parties of rights established under the relevant legislation.

The right of a decision-maker to obtain legal advice with respect to the legality of the performance of a duty is not in issue. Indeed, in light of the overwhelming opinion evidence with respect to the “legality” of issuing Apotex’s NOC, the Minister’s failure to seek departmental or outside opinions could have been perceived as an abdication of responsibility. But that self-imposed obligation cannot of itself deprive Apotex of its right to mandamus. In the absence of intervening legislation, the “legal advice” issue would not have arisen. It cannot now be invoked to argue that the Patented Medicines Regulations governed the ongoing decision-making process the moment they became law.

I am in agreement with Dubé J. that the legal advice justification is potentially endless and would almost necessarily result in allegations of abuse of discretion or unreasonable delay. Furthermore, the legal advice sought in this case had no bearing on the exercise of the Minister’s narrowly circumscribed discretion. Its relevance transcends the principal question to be answered by the Minister: Is Apo-Enalapril a safe drug? This is not to suggest that once that question was answered the Minister can be said to have acted unlawfully by seeking legal advice. But the inevitable delay arising from the solicitation of legal advice (as opposed to unreasonable delay) cannot prejudice the right to performance of a statutory duty. The guiding principle is well known—equity deems to be done what should have been done. Moreover, to deny mandamus because of legal concerns generated by a party adverse in interest (Merck) is to judicially condone what might be regarded as a tactical manoeuvre intended to obfuscate and delay the decision-making process.

In light of the foregoing, it is unnecessary to deal with the learned Trial Judge’s conclusion that [at page 181], “the Minister’s delay in issuing the Apotex NOC was not warranted.” Whether or not the delay was reasonable is not an issue upon which we can adjudicate as the necessary facts are not before us. Unless the Minister can establish another basis upon which to justify the decision to withhold performance of a duty otherwise owed, Merck’s argument must fail.

(c)        Pending Legislative Policy—Relevant or Irrelevant Consideration

In support of its submission that pending legislative policy is a consideration relevant to the exercise of the Minister’s discretion, counsel for Merck has referred us to three cases. In my opinion, none support the proposition stated. Nonetheless, I shall deal with each case and then turn to the more general question: As a matter of law, should the Minister be entitled to refrain from issuing the NOC on the basis of pending legislative policy?

The first of the decisions is Distribution Canada Inc. v. M.N.R., supra. In that case, the applicant sought mandamus to compel the Minister of National Revenue to enforce strictly the collection of duties on non-exempt groceries being purchased in the United States. At that time it was departmental policy not to collect duties of less than $1 or even higher amounts if other factors such as traffic volumes dictated. The Trial Judge drew a distinction between a total abdication of responsibility and conflicting views regarding how the law should be enforced and found that mandamus is only available in respect of the former. On appeal, this Court held that the Minister must take all reasonable measures to enforce the customs legislation; “[t]he reasonableness of [which] requires the assessment of policy considerations which are outside the domain of the courts since they deal with the manner in which the law ought to be enforced” (at page 40).

In Distribution Canada, the exercise of a ministerial discretion by reference to government policy did not have as its principal objective the divestiture of acquired rights. The Court simply concluded that the Minister enjoyed a discretion with which the law would not interfere. In any event, the precedential value of this decision has been misplaced. Its relevance arises in the context of the “balance of convenience” issue and accordingly will be addressed below.

The second case is Wimpey Western Ltd. and W-W-W Developments Ltd. v. Director of Standards and Approvals of the Department of the Environment, Minister of the Environment and Province of Alberta (1983), 49 A.R. 360 (C.A.).[10] Here, the Alberta Court of Appeal was required to determine whether a Minister’s policy views were relevant to the exercise of a discretion. The relevant subsection of the Clean Water Act, R.S.A. 1980, c. C-13, provides:

3 ...

(4) The Director of Standards and Approvals may issue or refuse to issue a permit or may require a change in location of the water facility or a change in the plans and specifications as a condition precedent to giving a permit under this section.

In Wimpey Western, the respondent denied the appellant a permit to construct its own waste water treatment facility on an industrial development site because it was felt that the erection of such treatment facilities should be deferred until a regional sewage plant was operational. That justification was in accord with the policy of the Minister of the Environment. The Court of Appeal held that the respondent’s discretion was not limited to considerations of technical matters. The panel was unanimous in its analysis of the basis on which ministerial policy was deemed a relevant consideration (at pages 368-369):

The purpose of the permit granting process in s. 3 is to give the Department power to control or limit potential sources of water contaminants before they are constructed. In my view, it is consistent with this purpose and with the wording of the section to allow the Director to consider a policy of his Minister aimed at limiting the number of points of discharge of contaminants into a waterway. It would seriously hamper the permit-granting system if the director could only look at applicants individually, but could not consider water quality objectives for the total river system.

The rather expansive view of relevant considerations advocated in Wimpey Western must be read in light of the broad discretionary power granted to the decision-maker. As well, the environmental aspects in Wimpey Western suggest a judicial predisposition, framed in terms of statutory construction, to recognize the promotion of public health concerns over a developer’s self-interest. The Minister’s discretion is carefully circumscribed in the case before us and specifically addresses health and efficacy concerns.

The last of the three cases cited, in my view, severely undermines Merck’s position. In Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. (1965), 113 C.L.R. 177 (Aust. H.C.), the applicant sought an order of mandamus directing the respondent to allow it to import an aircraft and to issue the licence necessary for it to carry freight between cities. The legislation provided (at page 177):

Regulation 199 of the Regulations provides:—“... (2) Where the proposed service is an interstate service, the Director-General shall issue an aerial work, charter or airline licence, as the case requires, unless the applicant has not complied with, or has not established that he is capable of complying during the currency of the licence with, the provisions of these Regulations, or of any direction or order given or made under these Regulations, relating to the safety of the operations.”[Emphasis added.]

The respondent had refused both requests on the grounds of governmental policy against increasing the number of companies engaged in inter-State airfreight services.

On the issue of whether the charter licence should issue, a majority of the High Court of Australia held that mandamus was available as the respondent did not possess an unfettered discretion when deciding to issue a charter licence. The Court’s rejection of government policy as a relevant consideration is antithetical to Merck’s submission. At pages 187-188, the High Court stated:

The evidence, and particularly the Director-General’s own statements, make it clear that his refusal of the charter licence had nothing whatever to do with any question of safety, and that in truth the prosecutor has established to the satisfaction of the Director-General that it is capable of complying with any and all provisions relating to the safety of the proposed operations. I read the Director-General’s letter refusing the charter licence as acknowledging, even if unintentionally, that it was in spite of, and not because of, the concluding words of reg. 199(2) that the charter licence was being refused. I think the truth of the matter should be faced: the refusal of the licence was based upon nothing whatever but a policy against allowing anyone to participate in the relevant form of inter-State trade other than those already engaged in it. However wise and well-grounded in reason that policy may be, if the Regulations on their true construction authorize a refusal so based I should find great difficulty in avoiding the conclusion that reg. 197, in so far as it requires a charter licence for charter operations in inter-State air navigation, is invalid as being in conflict with s. 92 of the Constitution. In my opinion, however, such a refusal is contrary to the direct command of reg. 199(2).

I regard this as a clear case for a writ of mandamus; and since on the view I take of the facts the Director-General is now under an absolute duty to issue a charter licence, a duty which is unqualified by any discretionary judgment still remaining to be exercised, I am of opinion that the tenor of the writ should be to command that that duty be performed. [Emphasis added.]

With respect to the application to import aircraft, the majority held that mandamus should not issue. Two of the three Judges held that this matter was within the ambit of the respondent’s discretion. In a concurring judgment, the third Judge opined that the respondent was under an obligation to consider and act upon government policy (at pages 204-206). I should point out that the reasoning of the minority with respect to the first issue was premised on the reality that an order directing the respondent to issue a charter licence would be a practical nullity in light of the applicant’s inability to obtain aircraft.

Anderson stands for the proposition that decision-makers vested with an unfettered discretion may have regard to existing government policy. What constitutes government policy (versus ministerial policy) is another matter. As the Minister’s discretion in the instant case was narrowly circumscribed, it is evident that this case advances Apotex’s position rather than Merck’s.

Ultimately, the question before this Court is whether pending legislative policy can be a relevant consideration notwithstanding the narrow scope of the Minister’s discretion. As a matter of first impression, I am of the view that the law should not preclude the possibility of recognizing the Minister’s right to refuse to perform a public duty on the basis of policy rationales underscoring impending legislation. Assuming that the Minister’s discretion does not embrace health and safety criteria, it is conceivable that mandamus would not or should not issue where, for example, a person is entitled to a permit authorizing importation and sale of a product which the Minister, acting in good faith, believes poses an unacceptable health risk to Canadians. In this situation, a court may well adjourn a mandamus hearing if it could be shown that amending legislation is about to be brought into effect. In so doing, it would be effectively acknowledging and applying the “balance of convenience” test as a ground for refusing mandamus. It is thus not a question of whether the Minister has the power to refuse to perform a duty on the basis of pending changes to the legislation but whether the Court is willing to exercise its discretion to grant mandamus in light of the potential consequences.

Returning to the facts before us, in my view it cannot be said that in the exercise of his statutory power under the FDA Regulations the Minister was entitled to have regard to the provisions of Bill C-91 after they were enacted but before they were proclaimed in effect. In the circumstances of this case, pending legislative policy is not a relevant consideration which can be unilaterally invoked by the Minister.

(d)       De Facto—Decision Never Made

Merck argues that the reason that the NOC did not issue before March 12, 1993, was because the Minister never considered Apotex’s application. Since the Minister did not exercise his discretion, the learned Trial Judge erred in purporting to dictate the outcome of the Minister’s deliberations. In the absence of a finding of bad faith on the part of the Minister Merck argues that Apotex could not have acquired a vested right to the NOC. Both parties support their arguments on this issue with reference to court decisions generated by the tightening of gun control measures in the late 1970s.

In 1977, Parliament introduced various amendments to the Criminal Code [R.S.C. 1970, c. C-34] (Criminal Law Amendment Act, 1977, S.C. 1976-77, c. 53) with a view to further restricting the use and sale of firearms in Canada. The legislation came into effect on January 1, 1978 and as a result, orders of mandamus were sought in a number of reported instances.[11] In each case the applicant had applied for a permit and had fulfilled all conditions precedent prior to January 1.

In Martinoff v. Gossen, [1979] 1 F.C. 327 (T.D.), the Trial Judge found that the applicant did not have an accrued right as of January 1 to a restricted weapons business permit. The Judge based his decision upon the fact that the respondent’s authority to issue the permit had been revoked and that therefore there was no one who could issue the permit. Interestingly, he does not appear to have been influenced by the fact that the application was still being processed at the time the law came into effect.

In Lemyre v. Trudel, [1978] 2 F.C. 453 (T.D.); affd on other grounds, [1979] 2 F.C. 362 (C.A.), the applicant sought mandamus ordering the respondent to issue a registration certificate with respect to a fully automatic Walther MPL 9mm. At the time of the application the gun was classified as a restricted weapon which was required to be registered with the Commissioner of the RCMP. The amended Criminal Code prohibited possession of such a weapon unless [at page 363] “on the day on which this paragraph comes into force, [it] was registered as a restricted weapon.” The applicant’s registration was not approved by January 1. At trial, the Judge held that the applicant had no “acquired right to possess his weapon, since without the permit and certificate such possession was quite simply prohibited” (at page 457). In brief oral reasons, the Court of Appeal concluded that the only basis on which the appellant could succeed was by establishing that: “his weapon fell within this exception, namely that it was registered (not that it might or should have been) on January 1, 1978.” (at page 364).

Lemyre contrasts sharply with the decision of the Saskatchewan Court of Appeal in Abell v. Commissioner of Royal Canadian Mounted Police (1979), 49 C.C.C. (2d) 193 (Sask. C.A.). In Abell, the applicant was successful in obtaining a registration permit for a “F.A. Mark II (1944) Sten gun”. After canvassing the decisions in Ho Po Sang and Merck& Co. Inc. v. Sherman & Ulster Ltd., Attorney-General of Canada, Intervenant, supra., the Saskatchewan Court of Appeal concluded that the applicant had complied with the requisite Criminal Code provisions as fully as possible prior to January 1, 1978 and therefore had acquired a right to have the weapon registered.

One commentator has noted that the decisions of this Court are “hard to reconcile” with Abell; see P.-A. Côté, supra, at pages 149-150. Yet it is not a question of choosing between Lemyre and Abell. Stare decisis dictates that the reasoning in Merck& Co. Inc. v. Sherman & Ulster Ltd., Attorney-General of Canada, Intervenant, supra prevails. This is not to suggest that Lemyre or Martinoff would be decided any differently today; certainly, it is arguable that the “balance of convenience” would favour the same result.

In the end, I must conclude that Apotex had a vested right to the NOC notwithstanding the Minister’s failure to render a decision by March 12, 1993.

(5)       Balance of Convenience

If Apotex were found to be entitled to mandamus, Merck submits that this Court ought to exercise its discretion to refuse the order sought. It argues that mandamus should be denied where the effect would be to frustrate legislative change. Merck maintains that the principle established in Ottawa, City of v. Boyd Builders Ltd., supra, is persuasive authority for the proposition that this Court should not enforce the old legislation as Bill C-91 and the Patented Medicines Regulations were in place at the time of the hearing.

It is true that in Boyd Builders the Supreme Court acknowledged the relevance of pending legislative change when deciding whether to grant an order of mandamus. Unlike the Trial Judge, and with respect, I do not believe the argument can be side-stepped. Merck has touched upon what has been described as a “controversial ground” upon which some courts have been prepared to deny mandamus. The decision in Boyd Builders has been cited as but one case in which courts have employed what has been labelled the “balance of convenience” test by weighing competing interests in determining the proper exercise of discretionary power: see J. M. Evans et al., Administrative Law: Cases, Text, and Materials, 3rd ed. (Toronto: Emond Montgomery, 1989), at page 1083.

Despite the way in which the issue was originally framed, three separate questions must be raised: (1) does the Court have the discretion to invoke the “balance of convenience” test as a ground for refusing mandamus? (2) if so, what are the criteria for its exercise? and (3) is this a case in which mandamus should be refused? I shall deal with each of the questions as required.

(a)       The Ambit of the Court’s Discretion—Balance of Convenience

The case law governing mandamus reveals a number of legal techniques by which courts have, on occasion, balanced competing interests. For example, when determining the relevancy or irrelevancy of considerations influencing the decision-maker, a Court may construe either broadly or narrowly the statutory discretion imposed by apparently clearly worded legislation. The same is true of provisions which seek to encroach upon vested rights. Indeed, a discussion of vested rights can be found to be underscored by policy considerations implicit in the formal reasons for judgment. Professor Côté offers a penetrating analysis of this process in The Interpretation of Legislation in Canada, supra, at page 143:

It seems that judges, in ruling on the recognition of vested rights, silently weigh individual and social consequences. The greater the prejudice suffered by the individual, the greater are the chances that vested rights will be recognized. If the individual prejudice is relatively limited (for example, when the law simply determines a “procedure”), the court is more likely to apply the new law immediately. If the judge perceives the social consequences of delays in the application of the new statute to be significant (for example, if the health or safety of the public is endangered), there will be considerable hesitation to recognize vested rights. Where survival of the earlier statute is not viewed as a threat to the interests of society, the courts find it easier to admit the existence of vested rights.

The Court’s discretion must be exercised discriminantly. One commentator cautions that as the scope of the Court’s discretion can intrude upon the rule of law, it must be exercised with the greatest of care: see Sir W. Wade, Administrative Law, 6th ed. (Oxford: Clarendon, 1988), at page 709. Another has observed that the Court has no discretion to refuse mandamus when it is the only means of securing performance of a ministerial duty, while assuming at the same time that it is not available as of right: see S. A. de Smith, Judicial Review of Administrative Action, 4th ed. by J. M. Evans (London: Stevens, 1980), at page 558.

Merck has asked this Court to decline to interfere with the Minister’s discretion even though his failure to perform a statutory duty has been found to be unjustified, in effect rendering lawful that which has been deemed unlawful. It is perhaps with these concerns in mind that Dubé J. implied that the decision in Boyd Builders prohibited the Court from exercising its discretion to deny mandamus (at page 181). Certainly, the introduction of the “balance of convenience” variable into the mandamus equation ultimately leads to the question of whether there are any limits to the considerations upon which a Court may exercise its discretion.

Despite obvious concerns, the law reports yield a thread of cases which may collectively lead one to conclude that the courts have all but formally recognized another guiding principle in law of mandamus.[12] In Distribution Canada Inc. v. M.N.R., supra, discussed earlier, it could be argued that the Court effectively balanced the benefits of strict enforcement of a duty against the interests of the enforcers and the general public. Arguably, a similar balancing technique was adopted in the gun control decisions.

By contrast, the “balance of convenience” test was effectively recognized in Re Central Canada Potash Co. Ltd. et al. and Minister of Mineral Resources for Saskatchewan (1972), 30 D.L.R. (3d) 480 (Sask. Q.B.); affd (1973), 32 D.L.R. (3d) 107 (Sask C.A.); appeal to Supreme Court dismissed (1973), 38 D.L.R. (3d) 317. The Minister’s discretion in that case was unfettered and mandamus could have been denied on that ground alone. However, both the trial and appeal Courts supported an alternative ground for refusing mandamus: such an order “would lead to confusion and disorder in the potash industry.” At the Court of Appeal, Chief Justice Culliton stated (at page 115):

The learned Chambers Judge also held that even if mandamus lay he would not, in the exercise of his discretion, grant it in any event. There can be no doubt that mandamus is above all a discretionary remedy. While it would be difficult to state, with certainty, all of the grounds upon which a Judge would be justified in refusing the writ in the exercise of his discretionary right, such grounds are indeed broad and extensive. No doubt the learned Chambers Judge felt that to grant mandamus in this case would lead to confusion and disorder in the potash industry. That this conclusion is sound is evident from the fact that all other potash producers opposed the application for mandamus. In my opinion, such a reason would be a valid one for the exercise of the learned Chambers Judge’s discretion.

Other courts have presumed that the Court retains an inherent discretion to refuse mandatory relief in certain circumstances. In Fitzgerald v. Muldoon, [1976] 2 N.Z.L.R. 615 (S.C.) the then recently elected Prime Minister of New Zealand announced the abolition of a superannuation scheme as promised during the election campaign. After the announcement, the Board stopped enforcing payment under the superannuation legislation on the assurance of the Prime Minister that repealing legislation would be forthcoming. Although the Court granted a declaration that the actions of the Prime Minister were illegal, it refused to grant a mandatory injunction compelling the Board to collect the required contributions. Instead it adjourned the proceedings for six months with a view to seeing whether the Government fulfilled its promise to repeal the superannuation scheme.

On the one hand, Fitzgerald ostensively supports the principle that the executive branch of government has no power to suspend the operation of a law. To quote Marceau J.A. in Carrier-Sekani Tribal Council v. Canada (Minister of the Environment), [1992] 3 F.C. 316 (C.A.), at page 347: “It is obvious that the will of Parliament is paramount and no administrative or executive authority is entitled to contravene it, whether directly or indirectly.” However, by adjourning the mandamus hearing, the Court effectively suspended the operation of the law in any case.

In Fitzgerald, the Trial Judge was clearly motivated by the practical consequences of granting the order. Even if the superannuation scheme were reinstated immediately, it would have taken six weeks before its operation became effective while the recovery of contributions in arrears would take considerably longer. The Trial Judge concluded (at page 623):

[I]t would be an altogether unwarranted step to require the machinery of the New Zealand Superannuation Act 1974 now to be set in motion again, when the high probabilities are that all would have to be undone again within a few months.

It should be noted that the evidence before the Trial Judge supported the belief that Parliament was in a position to pass such legislation within the time frame envisaged by the adjournment.

Having regard to the above jurisprudence, I conclude that this Court possesses the discretion to refuse mandamus on the ground of “balance of convenience”. The more difficult task is to identify the criteria to be applied in determining whether to exercise this discretionary power.

(b)       Criteria for the Exercise of the Discretion

The jurisprudence reveals three factual patterns in which the balance of convenience test has been implicitly acknowledged. First, there are those cases where the administrative cost or chaos that would follow upon the order’s issue is obvious and unacceptable; see Distribution Canada Inc. v. M.N.R., supra; Re Central Canada Potash Co. Ltd. et al. and Minister of Mineral Resources for Saskatchewan, supra; and Fitzgerald v. Muldoon, supra. It is noteworthy that in most of these cases the duty in question was owed to the public at large rather than the individual applicant. In this sense, the law of mandamus and the law of standing may be said to intersect. This relationship was implicitly acknowledged by Desjardins J.A. in Distribution Canada v. M.N.R., supra, at page 39:

I am, for my part, inclined to think that with the addition of the Finlay case, the jurisprudence does not clearly exclude the possibility of extending standing to a proceeding in mandamus where there is public interest to be expressed and there is no other reasonable way for it to be brought to court.

Whether the “balance of convenience” test may be employed as an ostensive vehicle by which standing requirements may be further relaxed I leave for another day.

The second, if more speculative, ground for denying mandamus appears to arise in instances where potential health and safety risks to the public are perceived to outweigh an individual’s right to pursue personal or economic interests; see Martinoff v. Gossen, supra; Lemyre v. Trudel, supra; and Wimpey Western Ltd. and W-W-W Developments Ltd. v. Director of Standards and Approvals of the Department of the Environment Minister of the Environment and Province of Alberta, supra.

In this case, there is no issue that an order of mandamus would precipitate administrative chaos. It is true that such an order may well have the effect of encouraging other generic drug manufacturers who submitted NDSs before Bill C-91 and the Patented Medicines Regulations came into effect to file for mandamus. However, as only those manufacturers who meet the traditional mandamus requirements will be successful, this is not a case in which arguments in favour of administrative efficiency are particularly persuasive. Further, as Apo-Enalapril has met the safety and efficacy requirements under the FDA Regulations, no issue with respect to public health and safety arises. This leaves us with the line of authority as represented by Boyd Builders.

(c)        Boyd Builders

Merck argues that the Boyd Builders principle enables this Court to exercise its discretion to deny mandamus since in that case the Court adjourned a mandamus hearing to allow a new regulatory regime to be implemented. In my view, this principle is misconceived. Indeed, even the interpretation forwarded by Merck does not advance its case.

Boyd Builders applied for a building permit at a time when the extant zoning by-law would have allowed for the proposed development. News of the proposed development generated adverse public reaction in response to which the city initiated the passage of a by-law amendment to thwart the developer’s project. Prior to Boyd Builders, an application for a building permit could be defeated by the passage of a by-law amendment by the Municipal Council any time up to the issuing of the permit; see Toronto Corporation v. Roman Catholic Separate Schools Trustees, [1926] A.C. 81 (P.C.). On application for mandamus the city of Ottawa sought an adjournment until such time as the Ontario Municipal Board had the opportunity to approve or reject the by-law amendment. The Supreme Court set out a tri-partite test in determining whether to grant the adjournment: (1) the municipality must establish a pre-existing intent to rezone the property prior to the application for a permit; (2) the municipality must have acted in good faith; and (3) the municipality must have acted with dispatch in seeking passage and approval of the amending by-law.

It is now well established that the prima facie right of a property owner to utilize his or her property in accordance with existing zoning regulations is not to be disturbed unless an intent to rezone is shown to exist prior to the application for the permit. Of course, strict application of the Boyd Builders principle does not advance Merck’s case. Apotex’s application for a NOC preceded Parliament’s intent to introduce amending legislation by a period exceeding two years. Leaving that aside, it is my opinion that the Supreme Court was not inviting courts to become embroiled in the daily political skirmishes surrounding land use planning decisions by balancing the so-called “equities”: it merely sought to establish a principle by which it could be determined whether a property owner had acquired a vested right to a building permit pending approval of a by-law amendment.

The current state of municipal law is that if a prior intent to rezone cannot be established, then the property owner can make claim to a vested right to a building permit. This principle cannot be invoked to support the exercise of the Court’s discretion in issuing mandamus by balancing competing interests. Admittedly, there are those who argue that the judiciary should play a greater role in “balancing the equities”, even in planning law (see Makuch, Canadian Municipal and Planning Law, (Toronto: Carswell, 1983), at pages 251-261), and undoubtedly cases in which courts have been willing to become embroiled in the politics of land use can be found in the reports; e.g., Re Hall and City of Toronto et al. (1979), 23 O.R. (2d) 86 (C.A.). But that, in my view, does not undermine the proper application of Boyd Builders.

In effect, the balance of convenience test authorizes the Court to use its discretion to displace the law of relevant considerations and the doctrine of vested rights. It should therefore be used only in the clearest of circumstances and not be perceived as a panacea for bridging legislative gaps. Unless courts are prepared to be drawn into the forum reserved for those elected to office, any inclination to engage in a balancing of interests must be measured strictly against the rule of law.

The argument that social or economic costs outweigh the rights of Apotex obfuscates what is essentially a private law issue. In the end, I conclude that the principle set out in Boyd Builders is of no relevance to the case before us, nor to the issue of the Court’s discretion to refuse mandamus in this case on the ground of “balance of convenience.” Accordingly, there is no legal basis upon which the “balance of convenience” test can be applied to deny Apotex the order which it seeks. I turn now to consider whether Apotex’s vested right to the NOC was divested by BilI C-91 and the Patented Medicines Regulations.

(6)       Retroactive or Retrospective

Merck argued that if Apotex acquired a vested right prior to March 12, 1993, such right was divested by subsections 5(1) and (2) of the Patented Medicines Regulations:

5. (1) Where a person files or, before the coming into force of these Regulations, has filed a submission for a notice of compliance in respect of a drug and wishes to compare that drug with, or make reference to, a drug that has been marketed in Canada pursuant to a notice of compliance issued to a first person in respect of which a patent list has been submitted, the person shall, in the submission, with respect to each patent on the patent list,

...

(2) Where, after a second person files a submission for a notice of compliance, but before the notice of compliance is issued, a patent list is submitted or amended in respect of a patent pursuant to subsection 4(5), the second person shall amend the submission to include, in respect of that patent, the statement or allegation that is required by subsection (1). [Emphasis added.]

Leaving aside the question of the impact of the “balance of convenience” arguments on retrospective legislation, Merck proffers three distinct submissions.

Merck’s first submission is policy-based. It asserts that Apotex created a “window of opportunity” for itself by obtaining a NOC notwithstanding the current legislation. Merck also maintains that Apotex is in effect seeking the assistance of this Court to facilitate patent infringement. (Illegality was not raised as an equitable bar to granting relief.) The relevant paragraphs from Merck’s Memorandum state (appellants’ memorandum of fact and law, paragraphs 87-89):

87. The Courts were not oblivious to patent rights when dealing with NOCs even under the former law. NOCs and patent rights have never occupied unrelated juristic solitudes. Under the former law, the Courts constantly emphasized that it was the compulsory license that affected the patent owners rights, and that the NOC merely enabled the generic drug company to exercise its rights under the compulsory license. The Court is now clearly confronted with a situation where Parliament has linked NOCs to protection of patent rights and the Court’s assistance is being invoked to facilitate patent infringement.

...

88. Neither the Minister (nor the Court) should turn a blind eye to the fact that from and after February 4, 1993 the “compulsory license” provisions had been repealed, and the “property interests” of patent owners such as Merck were directly and expressly referenced in Bill C-91 and the Patented Medicines (Notice of Compliance) Regulations. Parliament could hardly make clearer the mischief it intended to address in these enactments.

89. Apotex seeks to create a “window of opportunity” for itself between the former statutory regime (where patent rights were dealt with under the compulsory licence provisions) and the present statutory regime (where issuance of an NOC is tied to patent protection). The President, CEO and COO of Apotex, Bernard Sherman, has repeatedly testified in these proceedings that he intends to market enalapril across Canada as soon as possible, notwithstanding the fact that the Merck patent does not expire until October 16, 2007.

While NOCs and patent rights are linked, they have never been mutually dependent. One of the purposes of the compulsory licensing scheme was to avoid costly and protracted litigation surrounding possible patent infringement provided that the generic was willing to pay royalties. This reality, however, does not lead inevitably to the conclusion that all generic products infringe patents. In my view all that can be said is that Apo-Enalapril is a “safe” drug. To refuse mandamus on the basis of Merck’s argument would be to essentially prejudge the patent issue.

Practically speaking, Merck is seeking an interlocutory injunction against Apotex with respect to possible patent infringement without having to satisfy the conditions precedent imposed at law to the granting of such relief. (How section 6 of the Patented Medicines Regulations will be interpreted is another matter.) In the circumstances, an order in the nature of mandamus cannot reasonably be viewed as an instrument which “facilitates” patent infringement. This Court should not close the window of opportunity by ignoring the fact that Parliament had at its disposal an effective legislative tool for divesting Apotex of what the law holds to be an acquired right. Nor can this Court turn a blind eye to the availability of conventional legal procedures to thwart patent infringement.

Merck’s second submission is premised on the Patented Medicines Regulations being “procedural” in nature. Unquestionably, if those regulations are so characterized then it is clear that Apotex’s NDS would be subject to the new statutory regime; see Howard Smith Paper Mills Ltd. et al. v. The Queen, [1957] S.C.R. 403, per Cartwright J., at pages 419-420, quoting with approval Lord Blackburn in Gardner v. Lucas (1878), 3 App. Cas. 582 (H.L.), at page 603. However, the question we must address “is not simply whether the enactment is one affecting procedure but whether it affects procedure only and does not affect substantial rights of the parties”: DeRoussy v. Nesbitt (1920), 53 D.L.R. 514 (Alta. C.A.), at page 516, per Harvey C.J., cited with approval in Angus v. Sun Alliance Insurance Co., [1988] 2 S.C.R. 256, at page 265, per La Forest J.

In the instant case, we are not dealing with procedural regulations per se. The imposition of a criterion that a NOC cannot issue with respect to a patent-linked NDS is clearly a substantive change in the law and hence subject to the rules of statutory construction applicable to legislation purporting to affect vested rights.

Merck’s third submission is that the intended scope of subsection 5(1) is unambiguous. If that premise is valid then it necessarily follows that there is no room to invoke the canons of statutory construction designed to assist in the interpretation of ambiguous enactments. Merck seeks to avoid the application of the presumption against retroactive operation of statutes and the presumption of non-interference with vested rights, which: “only appl[y] where the legislation is in some way ambiguous and reasonably susceptible of two constructions”; Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271, at page 282, per Dickson J. (as he then was). In my view, subsections 5(1) and (2) do not manifestly seek to divest persons of acquired rights. They are at best ambiguous.

At this juncture the issue can be tackled in one of two ways. The first invokes an extensive analysis of the law dealing with retroactivity and retrospectivity. Critical to that analysis is the need to distinguish between the principle of non-retroactivity of statutes and the principle of non-interference with vested rights. Today, it is well recognized that a statutory enactment which is forward looking but which also impairs or affects vested rights is not necessarily retroactive. The distinctions are addressed in three Supreme Court decisions:[13] Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, supra; Attorney General of Quebec v. Expropriation Tribunal et al., [1986] 1 S.C.R. 732; and Venne v. Quebec (Commission de protection du territoire agricole), [1989] 1 S.C.R. 880 (see also Lorac Transport Ltd. v. Atra (The), [1987] 1 F.C. 108 (C.A.), per Hugessen J.A., at page 117). The second approach is much simpler and reinforces my opinion that in the circumstances of this case both interpretative presumptions are applicable and that Parliament had not intended subsections 5(1) and (2) of the Patented Medicines Regulations to intrude upon vested rights.

For the sake of argument, assume that subsection 5(1) expressly applies to all NOCs “in the pipeline”, including those to which applicants have a vested right. No one can question the fact that Parliament has the authority to pass retroactive legislation, thereby divesting persons of an acquired right. It is equally clear, however, that vested rights cannot be divested by the Patented Medicines Regulations unless the enabling legislation, that is the Patent Act or Bill C-91, implicitly or explicitly authorize such encroachments; see generally Côté, supra, at page 152. The Supreme Court endorsed this approach to regulatory interpretation in A.G. for British Columbia et al. v. Parklane Private Hospital Ltd., [1975] 2 S.C.R. 47, at page 60, per Dickson J. (as he then was):

If intra vires, Order in Council 4400 would serve to extinguish retrospectively the entire claim of Parklane, but in my view it fails to have that effect. The Lieutenant Governor in Council is empowered to enact regulations for the purposes of carrying into effect the provisions of the Act, but nothing expressly or by necessary implication contained in the Act authorizes the retrospective impairment by regulation of existing rights and obligations. [Emphasis added.]

It is one thing for a provision of an Act of Parliament to attempt to affect vested rights and quite another for a subsection of a regulation to do the same. With one exception, I could find no provision in the Bill C-91 specifically authorizing regulations to interfere with existing or vested rights. Certainly, subsection 55.2(4) of the Patent Act, the regulation-making provision, does not expressly or implicitly authorize regulations of a retroactive nature. This explains why the legislative draftsperson did not craft subsection 5(1) of the Patented Medicines Regulations so as to embrace all NDSs “in the pipeline” by referring specifically to those in which the applicant had acquired a vested right. In my estimation, the draftsperson knew that such formulation would be ultra vires the Governor in Council.

By contrast, subsection 12(1) of Bill C-91 expressly extinguishes all compulsory licences granted after December 20, 1991. Like the learned Trial Judge, I am driven to the conclusion that Parliament could have done the same for NOCs “in the pipeline”. A purposive interpretation of subsection 5(1) of the Patented Medicines Regulations and an appreciation of the ejusdem generis canon of statutory interpretation reveal that it only applies to NDSs which had not reached the point where the Minister’s discretion was spent as of March 12, 1993.

(7)       Jurisdiction of the Court

The final issue is whether the jurisdiction of this Court to grant judicial review has been “ousted” by the paramountcy provision in Bill C-91. Subsection 55.2(5) [of the Patent Act] reads:

55.2 ...

(5) In the event of any inconsistency or conflict between

(a) this section or any regulations made under this section, and

(b) any Act of Parliament or any regulations made thereunder,

this section or the regulations made under this section shall prevail to the extent of the inconsistency or conflict. [Emphasis added.]

Merck’s novel argument is succinctly outlined in its memorandum (at paragraphs 91-95 inclusive):

91. As previously discussed, the Patented Medicines (Notice of Compliance) Regulations on their face expressly apply to NOC applications pending before the Minister on March 12, 1993.

92. As of March 12, 1993 accordingly, Parliament had put in place a new procedure to govern disputes about the issuance or non-issuance of NOCs. The new procedure is set out in Sections 6 and 8 of the Patented Medicines (Notice of Compliance) Regulations.

93. The constitutional basis for the Federal Court Act is s. 101 of the Constitution Act 1867 which is directed to “the better Administration of the Laws of Canada”.

94. The prohibition against issuance of an NOC in s. 7 of the Regulations until the procedure set out in ss. 6 and 8 of the Regulations has been complied with is as much “a law of Canada” as is s. 18 of the Federal Court Act. Indeed, and more importantly, Parliament has declared in s. 55.2(5) of the Regulations that the prohibition in the Regulations is paramount to s. 18 of the Federal Court Act and every other federal statute.

95. Accordingly, when this matter came on for a hearing on June 21, 1993, the Court had no more jurisdiction to issue mandamus to the Minister to issue an NOC than the Minister had jurisdiction on his own behalf to issue an NOC in the face of the prohibition in s. 7 of the Regulations.

I fail to see how subsection 55.2(5) or any other regulation thereunder can be said to be paramount to section 18 of the Federal Court Act [R.S.C., 1985, c. F-7 (as am. by S.C. 1990, c. 8, s. 4)]: see generally Friends of the Oldman River Society v. Canada (Minister of Transport), supra, per La Forest J., at pages 38-39. Am I to assume that as the Supreme Court of Canada is a statutory Court, it too lacks jurisdiction in this matter? The answer to this submission is self-evident. There is no paramountcy issue. We have been asked to determine whether the Patented Medicines Regulations are applicable. Subsection 55.2(5) cannot be construed as a privative clause insulating the Minister and the relevant legislation from judicial review. This submission is without merit.

CONCLUSION

The appeal and cross-appeal should be dismissed with costs.

Mahoney J.A.: I agree.

McDonald J.A.: I agree.

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