CITATION: Schenk v. Valeant Pharmaceuticals International, Inc., 2017 ONSC 5101

COURT FILE NO.: CV-15-10842-00CL

DATE: 20170825

ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

B E T W E E N:

REINER SCHEN K

Plaintiff

-and -

VA LEANT PHARMACEUTICALS INTERNATIONAL, INC., VALEANT INTERNATIONA L (BARBA DOS) SRL, EUGENE MELNYK, TRIMEL PHARMACEUTICALS CORPORATION, TRIMEL B I OPHARMA INC., TRJMEL BIOPHARMA HOLDINGS INC. and TRJMEL BIOPHARMA SRL

Defendants

-and -

EUGENE MELN YK, TRIMEL PHARMACEUTICALS CORPORATION, TRIMEL BIOPHARMA HOLDINGS INC., TRJMEL BIOPHARMA SRL, PAUL MAES and MAES PHARMCONSULT SPRL

Third Parties

BEFORE: F.L. Myers J.

COUNSEL:

Adam Stephens, for the plaintiff

Monique Jilesen, Ian MacLeod, and Laurel Hogg, for the defendants Valeant Pharmaceuticals International, Inc. and Valeant International Bermuda, formerly, Valeant International (Barbados) Srl Douglas Deeth and David Bowden for the third parties

HEARD: August 24, 2017

CASE CONFERENCE ENDORSEMENT

Background

[1] The plaintiff sues the two Valeant defendants for commission of $10 million under a 2006 agreement under which the plaintiff was to assist Valeant or its predecessor to buy product rights from a foreign vendor. The defendants deny that they owe commission to the plaintiff as they never bought the product rights from the foreign vendor. The rights were bought by a corporation affiliated with the third party Melnyk (who used to be a major shareholder, director, and officer of the predecessor to the Valeant defendants). Alternatively, the plaintiff sues the Valeant defendants for breach of confidence in providing information to the third parties or their agents that let Mr. Melnyk’s company enter into a transaction with the foreign vendor that may have circumvented the plaintiff’s entitlement to commission under the 2006 agreement. Mr. Melnyk and his companies say that they bought the product rights from the foreign vendor completely apart from any contact between the plaintiff and the defendants.

[2] Examinations for discovery have been held of all parties other than Mr. Melnyk who resides in Barbados most of the year. By consent order of Newbould J. Mr. Melnyk was to be examined for discovery before the end of June, 2017. Dates were not agreed among counsel so no examination has been held. The order of the court remains in force and must be implemented.

[3] Undertakings are overdue from the Valeant defendants. They have had difficulties finding a person with relevant information. Ms. Jilesen advises that they now have someone who can provide them with relevant information and she asks for 60 days to complete undertakings.

[4] The plaintiff would like to proceed to mediation. The Valeant defendants are not interested in doing so at this time. The plaintiff complains that time was wasted discussing possible mediation issues only to have the defendants back out at the last minute. I am not ordering mediation among commercial parties who do not want to mediate. In this case it would just waste time and money. The matter should be readied for trial. The parties are sophisticated and can engage in settlement discussions any time they choose to do so. I or another judge will be happy to assist if the parties wish. But trial preparation should not wait.

General Case Management Directions:

[5] The purpose of this case management process is to resolve the lawsuit as efficiently, affordably, and proportionately as the interests of justice allow. The proceeding will be managed to move forward efficiently but not urgently. There should always be at least one process step scheduled and being actively pursued. Parallel scheduling of multiple steps should be expected.

[6] Parties and counsel are required to cooperate on procedural and scheduling matters so as to ensure there is a fair process for all. (See the Commentary under Rule 5-1.1 of the Rules of Professional Conduct “[t]he lawyer must discharge this duty …in a way that promotes the parties' right to a fair hearing in which justice can be done”) and also Bosworth v. Coleman, 2014 ONSC 6135).

[7] The court will make liberal use of Rule 50.13 to resolve matters informally at case conferences where possible. At every case conference, all foreseeable next steps are on the agenda and are to be presumed to be available for summary resolution. Counsel should not expect notice to be given before resolution of minor procedural squabbles or for obvious next steps procedurally. There is no particular form of notice required under Rule 50.13 (6). In the event that some notice is required in specific circumstances, counsel should expect notice to be informal and brief.

[8] Junior counsel are invited to argue motions or pieces of motions that they have helped prepare and to question witnesses with whom they have worked without fear of cost consequences related to over-staffing concerns.

[9] All motions in this proceeding will be heard by me upon a schedule to be set at a case conference by telephone or in person as the case may be. No motions may be brought in this proceeding before being considered at a case conference.

[10] I may be contacted by email to schedule a hearing or case conference. Counsel should have communicated in advance to discuss dates and procedural issues to accommodate the hearing being requested regardless of whether their clients oppose the matter on the merits. Requests should include a proposed timetable and a minimal description of the matter in issue or relief sought without argument. Email communication should follow Rule 1.09 and should generally be treated formally as if the content were being filed with the court.

[1] All documents to be delivered in this matter should be sent to the court as attachments to emails or on memory keys/sticks and should be in searchable pdf format. Reference to case law should be by hyperlinks to another online source if necessary. If counsel need assistance with format, resort may be had to http://www.ontariocourts.ca/scj/practice/practice-directions/edelivery-scj/

[2] If counsel wish to deliver hard copies of documents or computer media for case conferences, the material should not be filed with the registrar, but should be delivered to my attention in care of Judges’ Administration, Room 170, 361 University Avenue.

[3] Subject to any specific exceptions that may be granted, undertakings given at all examinations in this proceeding are to be answered within 30 days of being given.

[4] Rule 34.12 applies at all examinations in this action. That is, all questions to which objection is taken (including those which are taken under advisement) shall be answered subject to a ruling to be obtained later. The only exceptions are for questions objected to by reason of lawyer and client privilege or for questions that amount to a clear abuse of process (which should never occur in any event).

[5] The court will be available by email in real time to assist if issues arise which threaten the completion of any examinations that are scheduled. Moreover any issues concerning refusals and undertakings will be resolved summarily by the court.

Case Specific Directions

[11] Within one week, counsel are to agree upon a format and timing of the examination for discovery of Mr. Melnyk for two consecutive days in the next thirty days failing which the court will set the time and place of the examination.

[12] The Valeant defendants shall deliver complete answers to undertakings with full backup documentation by October 20, 2017.

[13] The next case conference will be held by telephone on September 27. 2017 at 8:30 a.m. My Assistant will circulate a call-in number.

F.L. Myers J.

Date: August 25, 2017