Standard of Review

In an appeal from a prothonotary decision relating to inventor examinations, a five-member panel of the Federal Court of Appeal held that the court “should abandon the Aqua-Gem standard and adopt the one set out in Housen” for appeals from discretionary decisions of prothonotaries.

The decision, Hospira Healthcare Corporation v The Kennedy Institute of Rheumatology, 2016 FCA 215 (PDF), was released today in a proceeding relating to infliximab/Remicade.  A 17-day impeachment trial is scheduled to start on September 12, 2016 before Justice Phelan.

The Federal Court of Appeal decision is an appeal of a decision of Justice Boswell (2016 FC 436) in which he dismissed an appeal from the case management prothonotary (not published). The underlying decision related to the length of a follow up examination of two inventors. A day of inventor examinations had already been completed for each inventor. The prothonotary had granted one-half day of additional time to be conducted by telephone. Hospira appealed. The judge dismissed the appeal finding the decision was not vital to final issue and was not clearly wrong.

The issue for the Federal Court of Appeal was identified:

At issue is the question of whether this Court should revisit the standard of review applicable to discretionary orders made by prothonotaries enunciated in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, 149 N.R. 273 [Aqua-Gem]. The Respondents invite us to abandon the standard of review set out in Aqua-Gem and to replace it by the standard enunciated by the Supreme Court of Canada in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 [Housen]. For the reasons that follow, it is my view that we should abandon the Aqua-Gem standard and adopt the one set out in Housen.

Aqua-Gem has been the leading case on the standard of review from discretionary orders of prothonotaries (and the last time a 5 member panel of the Federal Court of Appeal heard an appeal). The respondents argued that Housen is the Supreme Court’s definitive word on the standard of review and should be followed.

While noting that since the underlying order is not vital to the final outcome, “whether or not the standard of review should be revisited is in no way determinative of this case” and the standards under Aqua-Gem and Housen are substantially the same in such case, the Court said:

[28] Notwithstanding, I have no doubt that the question of the standard of review applicable to discretionary decisions of prothonotaries is one that needs to be revisited. It is my opinion that we should now adopt the Housen standard with regard to discretionary decisions made by prothonotaries as we have done in respect of similar decisions made by judges of first instance (in Imperial Manufacturing Group Inc. v. Decor Grates Incorporated, 2015 FCA 100, [2016] 1 F.C.R. 246 [Imperial Manufacturing], to which I will return later). Needless to say, the issue of the standard of review applicable to orders of both judges and prothonotaries has been one of the most contentious issues before our Court and before all courts of appeal, including before the Supreme Court of Canada, in the last 10 to 15 years. It is my respectful view that it is not in the interests of justice to continue with a plurality of standards when one standard, i.e. the Housen standard, is sufficient to deal with the review of first instance decisions.

The court also commented on the different lines of jurisprudence on what was to be considered ‘vital’ and that the uncertainty and confusion that has “crept in the process and detracted from the effective review of discretionary orders made by prothonotaries.” as well as the direction taken by the Ontario Court in Zeitoun. The Court noted that, “prothonotaries are no longer, if they ever were, viewed by the legal community as inferior or second class judicial officers. Other than in regard to the type of matters assigned to them by Parliament, they are, for all intents and purposes, performing the same task as Federal Court Judges.”

The Court concluded that whether “a motion is determined by a prothonotary or a motions judge is, in my view, irrelevant. The same standard should apply to the review of all discretionary orders.” and therefore considered, “whether the Motions Judge erred in law or made a palpable and overriding error in refusing to interfere with the Prothonotary’s decision.” The Court considered the underlying facts and parameters for examinations and held that there was no basis to conclude that the motion judge ought to have interfered with the prothonotary’s decision.

This decision will likely be heavily cited for its guidance on appeals from  prothonotary decisions, which may be made as a matter of right under Rule 51 to a judge of the Federal Court. Cases on standard of review have been the most cited decisions in previous analysis I have done (see previous post). The decision will likely make it more difficult to successfully appeal decisions of prothonotaries vital to the final issue in proceedings. Prothonotaries are heavily involved in the procedural aspects of most intellectual property proceedings, typically through case management.