Federal Court of Appeal deals with infringement matters relating to patented medicines
This week, Canada’s highest court dealt with bankruptcy and insolvency cases involving the doctrine of corporate attribution, attempts to recover funds lost to a Ponzi scheme and other fraudulent means, and administrative penalties imposed by a securities regulator.
Supreme Court of Canada
On Tuesday, the court heard John Aquino, et al. v. Ernst & Young Inc., in its capacity as Court-Appointed Monitor of Bondfield Construction Company Limited, et al., 40166. This case arose from a false invoicing scheme of John Aquino and other appellants.
The scheme sought to siphon off tens of millions of dollars from Bondfield Construction Company Limited and 1033803 Ontario Inc. The respondents challenged this scheme and tried to recover money under s. 96 of the Bankruptcy and Insolvency Act, 1985 and s. 36.1 of the Companies’ Creditors Arrangement Act, 1985.
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The appellants argued that the principles of the common law doctrine of corporate attribution did not allow for the imputation of Aquino’s intention to either of the two debtor companies. The application judge disagreed and imputed Aquino’s fraudulent intention to the corporate debtors. The Ontario Court of Appeal dismissed the appeals.
Also on Tuesday, the court heard Lorne Scott, et al. v. Doyle Salewski Inc. in its capacity as trustee in Bankruptcy of Golden Oaks Entreprises Inc., et al., 40399. This case arose from a Ponzi scheme called Golden Oaks Enterprises Inc., which collapsed in 2013. Golden Oaks and its founder went into receivership and made assignments in bankruptcy.
In 2015, the appointed trustee in bankruptcy filed against the creditors more than 80 legal actions. Seventeen of these were against individuals and companies who, in 2012 and 2013, received from Golden Oaks payments such as commission payments and interest on promissory notes.
The trial judge granted a claim against Lorne Scott for repayment of $72,575 in preferences and dismissed the other claims against him. As for the other investor appellants, the judge granted claims for repayment of interest in amounts ranging from $4,000 and $67,500. The Ontario Court of Appeal dismissed the appeal and partly allowed the cross-appeal.
On Wednesday, the court heard Thalbinder Singh Poonian, et al. v. British Columbia Securities Commission, 40396. The British Columbia Securities Commission imposed a disgorgement order and an administrative penalty against the appellants. It found them in breach of B.C.’s Securities Act, 1996 by engaging in conduct resulting in the misleading appearance of trading activity in or an artificial price for a corporation’s shares.
The B.C. Supreme Court granted the commission an order declaring that the amounts owing to it were debts that a discharge order under the Bankruptcy and Insolvency Act would not release.
They fell within two exemptions to the discharge of debts pursuant to s. 178(1) of the Bankruptcy and Insolvency Act, the court said. Specifically, the debts amounted to fines, penalties, or restitution orders imposed by a court under s. 178(1)(a) and resulted from obtaining property or services by false pretenses or fraudulent misrepresentation under s. 178(1)(e), the court explained.
The B.C. Court of Appeal dismissed the appeal. While it disagreed that a court had imposed the sanctions, it found that these sanctions indeed fell within the exemption under s. 178(1)(e).
On Thursday, the court heard Attorney General of Canada v. Joseph Power, 40241. In the 1990s, the respondent was convicted of two criminal offences, for which he served an imprisonment term. He applied for a record suspension in 2013.
Two enactments amending the Criminal Records Act, 1985 — the Limiting Pardons for Serious Crimes Act, 2010 and the Safe Streets and Communities Act, 2012 — and their transitional provisions, which gave them retrospective application to offences committed before enactment, had the combined effect of making the respondent permanently ineligible for a record suspension. These transitional provisions were later declared unconstitutional.
The respondent, who had lost his job, sued the Crown for damages under s. 24(1) of the Canadian Charter of Rights and Freedoms. He alleged that the adoption and application of the transitional provisions amounted to conduct that was clearly wrong, undertaken in bad faith, and abusive of government power.
Canada’s attorney general asked for a determination of the legal question of whether the Crown could be liable for damages relating to the enactment of legislation later found unconstitutional. The New Brunswick Court of Appeal dismissed the attorney general’s appeal.
On Friday, the court heard B.E.M. v. His Majesty the King, 40221. A jury convicted the appellant of historical sexual assault and sexual interference offences against his stepdaughter. In the closing submissions, Crown counsel provided the jury with a lengthy address, including a personal anecdote.
On appeal, the appellant alleged that the trial judge erred in the jury charge by failing to instruct the jury to ignore the Crown’s improper submissions on matters not in evidence.
A majority of the Alberta Court of Appeal dismissed the appeal. The appellate court found no risk that the Crown’s reference to the personal anecdote would lead to a miscarriage of justice.
Federal Court of Appeal
On Tuesday, the court heard the appeals in Apotex Inc. v. Janssen Inc. et al, A-36-22; Pharmascience Inc. v. Janssen Inc. et al, A-69-22; and Pharmascience Inc. v. Janssen Inc. et al, A-205-22. It also dealt with the case of Janssen Inc. et al. v. Apotex Inc., A-229-23 on Thursday.
These appeals arose from patent infringement claims under the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133 in relation to Janssen Pharmaceutica N.V.’s Canadian Patent No. 2,655,335 titled “Prolonged-Release Injectable Suspensions of Paliperidone Palmitate and Dosage Forms and Delivery Systems Incorporating Same.”
Also on Tuesday, the court heard Binal Patel et al v. Dermaspark Products Inc. et al, A-108-23. This matter related to the respondents’ trademark over the OxyGeneo machine, along with products used to operate with the machine.
On Wednesday, the court heard Tweak-D Inc. v. Attorney General of Canada, A-119-23. The appellant challenged an order dismissing an application to appeal under s. 56 of the Trademarks Act, 1985. This case related to the registrar’s decision refusing a trademark application for TRIBAL CHOCOLATE.
On Thursday, the court heard Kevin Haynes v. Attorney General of Canada, A-55-22. The appellant, who was self-represented with disabilities, invoked the Accessible Canada Act, 2019 and alleged that the court failed to ensure that it removed barriers and instead created a barrier by dismissing costs based on a lack of evidence.