Apotex Inc. v Kalinka, 2016 CanLII 81983 (ON SC)

Apotex Inc. v. Kalinka, 2016 ONSC 7290

COURT FILE NO.: CV-14-499221

DATE: 20161123

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

APOTEX INC.

Plaintiff

– and –

PETER KALINKA and TIBURON BIO CONSULTING

Defendants

Mark Dunn for the Plaintiff

Travis G. Walker for the Defendants

HEARD: In writing

PERELL, J.

REASONS FOR DECISION

1The Plaintiff, Apotex Inc., sued Peter Kalinka and Tiburon Bio Consulting for bribery, breach of employment contract, and breach of fiduciary duty. On a summary judgment motion, I granted Apotex judgment and I ordered Dr. Kalinka and Tiburon to disgorge everything paid to them after April 1, 2012. See Apotex Inc. v. Kalinka, 2016 ONSC 5527.

2I summarize my reasons in paragraphs 5 and 6 of the decision as follows:

5. By way of a summary of my reasons, discussed below, in my opinion, from June 1, 2007, which was the date of the first Consultancy Agreement, to April 1, 2012, when Dr. Kalinka became an Apotex employee, Dr. Kalinka and Accelsiors were entitled to do genuine business one with another. Although during this period, Dr. Kalinka was an agent of Apotex and although he had fiduciary duties to Apotex, the doing of genuine business between Dr. Kalinka and Accelsiors was not the receipt of a secret commission or a breach of fiduciary duty because Apotex knew Dr. Kalinka had a prior business relationship with Accelsiors and even if it was deceived to think that the relationship had ended, there was nothing in the Consultancy Agreement that precluded Dr. Kalinka from doing or resuming doing genuine business with Accelsiors during the currency of the Consultancy Agreement. Apotex knew that Dr. Kalinka would provide consulting services to others. Fiduciary duties are contextual and can be waived, and Apotex knew that Dr. Kalinka had done business with Accelsiors in the past and could do so in the future. Apotex did not contract for absolute loyalty and the avoidance of conflicts of interest from its consultant. Rather, Dr. Kalinka had contracted for a right to pursue his self-interest, provided, of course, that he committed no frauds against Apotex. He would not be entitled to perpetrate a fraud by sham transactions with Accelsiors, but on the balance of probabilities, I find that the business done between June 1, 2007 and April 1, 2012 was genuine business and not a fraud.

6. The legal situation, however, changed after April 1, 2012, when Dr. Kalinka became a full-time employee of Apotex. From that juncture forward, it was all of bribery, breach of fiduciary duty, and breach of contract to do business with Accelsiors. The remedy for this misconduct is for the Defendants to disgorge what was paid to them after April 1, 2012; i.e., €299,100 converted into Canadian dollars plus pre- and post-judgment interest. I believe that Dr. Kalinka was foolish and culpable, but he was not dishonest and he has been adequately punished by having to disgorge €299,100. On the balance of probabilities, Apotex did not prove that there was more contracting beyond the €299,100, and, therefore, no purpose would be served by ordering an accounting or a reference to determine damages or profits. As for the counterclaim, Dr. Kalinka breached his employment contract, and there is no merit to his claim for a bonus under his employment contract. He forfeited any bonus by breaching the employment contract.

3Relying on the invoices in the evidentiary record, in quantifying the amount of the disgorgement to be made by the Defendants, I found that the amount received from Accelsiors after April 1, 2012 to be €299,100.

4The invoices were on the record but during his cross-examination, Dr. Kalinka refused to provide evidence about what amounts he had actually received from Accelsiors. I drew the inference from his refusal that the Defendants had been paid €299,100. I concluded that an accounting was not necessary.

5After the motion was argued, but before the judgment was issued and entered, I was advised by Apotex that in calculating the award, I had omitted invoices issued in April and May 2012 that were included in the evidentiary record. Therefore, Apotex submitted that the award should have been €350,100 converted into Canadian dollars, and it requested that I correct the judgment so that it could now be issued and entered.

6Dr. Kalinka and Tiburon oppose the relief sought by Apotex. They submitted that the proper quantum of the award ought not be €299,100 nor €350,100 but be the lesser sum of €279,100 converted into Canadian dollars. They too bring a motion to have the judgment award amended.

7The rationale for the the Defendants’ request to reduce the amount of the judgment is that of the €51,000 that Apotex seeks to have added, although the invoices were issued after April 1, 2012, Dr. Kalinka’s evidence on the motion was that €26,000 was for work performed before April 1, 2012. And he says that additional evidence from him and his accountant will prove that he never was paid for the invoice dated May 10, 2013, which was for €45,000. The result is that the judgment should be €279,100 (€299,100 + €51,000 - €26,000 - €45,000).

8Until an order is formally entered in the court record, the court has a broad discretion to vary or withdraw it, if it is in the interests of justice to do so: Montague v. Bank of Nova Scotia (2004), 2004 27211 (ON CA), 69 O.R. (3d) 87 (C.A.), leave to appeal refused [2004] S.C.C.A. No. 79 (S.C.C.); 1711811 Ontario Ltd. v. Buckley Insurance Brokers Ltd., 2014 ONCA 125; Smith Bus Lines Ltd. v. Bank of Montreal (1987), 1987 4190 (ON SC), 61 O.R. (2d) 688 (H.C.J.); Metropolitan Toronto Condominium Corp. 626 v. Bloor/Avenue Road Investment Inc., [2009] O.J. No. 1205 (S.C.J.); Re Nortel Networks Corporation, 2015 ONSC 4170.

9In Holmes Foundry Ltd. v. Point Edward (Village), 1963 197 (ON CA), [1963] 2 O.R. 404 (C.A.) at p. 407, Justice Laidlaw stated: “It is well settled in law that an order can always be withdrawn, altered or modified by a judge either on his own initiative or on the application of a party until such time as the order has been drawn up, passed and entered.” However, the circumstances in which a court may vary an order are limited. Generally speaking, a court may only vary an order where: (a) there are new facts arising or discovered after the order was made that might probably have altered the judgment and could not with reasonable diligence have been discovered sooner; or (b) there has been an error in expressing the manifest intention of the court: Millard v. North George Capital Management Ltd., [1999] O.J. No. 3957 (S.C.J.); Re Wright, [1949] O.J. No. 3 (H.C.J.).

10The power to reconsider a decision will be exercised sparingly and only where it is clearly in the interests of justice: Mujagic v. Kamps, 2015 ONCA 360; Schmuck v. Reynolds-Schmuck (2000), 2000 22323 (ON SC), 46 O.R. (3d) 702 (S.C.J.).

11A motion for reconsideration is not the venue for new arguments or new evidence that could have been made and/or led at the initial hearing: Mujagic v. Kamps, supra at para. 13; Sykes v. Sykes, [1995] B.C.J. No. 821 (B.C.C.A.) at paras. 6, 12.

12In the immediate case, I am satisfied that I erred in omitting two invoices from my calculation of the judgment award and that if I had I not made the error I would had added the sum of the two invoices to the award less the €26,000 for work performed before April 1, 2012. The result is that the judgment award ought to have been €324,100, converted into Canadian dollars.

13No further adjustment is called for in the circumstances of this case. I made no error in inferring from the evidence on the motion that all the invoices had been paid. Having purposely refused to provide evidence of what amount Accelsiors actually paid to them, it is now too late for the Defendants to do so.

14Order and judgment accordingly.

Perell, J.