• Court of Appeal Grants Appeal as it Relates to Duty to Mitigate
  • May 3, 2017 | Authors: Jillian Brenner; Adrian J. Howard; Beverley Moore; Chantal Saunders
  • Law Firm: Borden Ladner Gervais LLP - Ottawa Office
  • In this decision, the Court of Appeal was considering an appeal by Apotex of various findings of the Court relating to its action seeking damages from Her Majesty the Queen, as representative of the Minister of Health (see 2014 FC 1087, our summary here). Apotex asserted, among other allegations, that the Health Protection Branch committed misfeasance in a public office and acted negligently, as well as breach of a settlement agreement. The Court found that Health Canada was liable on the basis of the tort of misfeasance in a public office and negligence. The Court lowered Apotex's damages on the basis that Apotex failed to mitigate its damages. The allegation of breach of the agreement was dismissed. Apotex appealed on several grounds and Health Canada cross-appealed.

    The Court of Appeal reversed only in respect of the Court's finding that Apotex's damages should be reduced for failure to mitigate.

    The Court of Appeal provided a lengthy summary of the Court's decision. With respect to the duty to mitigate, the Court of Appeal noted that Apotex made a number of arguments in this regard. However, the Court of Appeal considered only whether the Court erred by "requiring Apotex to accede to the use of a Canadian reference product in order to mitigate its loss." The Court of Appeal indicated that it was necessary for the Court to consider whether Apotex acted reasonably in its course of action, and not determine that there is only one reasonable course of action, which was not followed by Apotex. Upon reviewing Apotex's actual course of conduct, the Court of Appeal found that Apotex took a number of steps, including repeated interactions with Health Canada, to address the issue. Further, the Court of Appeal noted that the Court failed to recognize that Apotex's position related to its strategic and economic interests beyond a single drug submission.

    The Court of Appeal varied the judgment to remove the finding that Apotex failed to mitigate its loss. As the case was bifurcated, the damages portion was to proceed on this basis. The Court of Appeal found that each party should bear its own costs.