COURT FILE NO.: CV-21-00671230-0000 DATE: 20230725

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

HOSPIRA HEALTHCARE INDIA and PRIVATE LIMITED and HOSPIRA INC. Applicant – and – JACK A. ROTSZTAIN and 1827216 ONTARIO INC. Respondent

Counsel: Randy Sutton, for the Applicant Cynthia Spry and Brendan Monahan, for the Respondents

HEARD: February 2, 2023

a.p. ramsay j.

A. Overview

[1] This is an application by Hospira Healthcare India Private Limited and Hospira Inc. (together, “Hospira”) to enforce Letters Rogatory issued by the Supreme Court of the State of New York (the “Letters Rogatory”). The Letters Rogatory request the assistance of this Court to obtain documentary and oral evidence from the respondents, Jack Rotsztain and 1827216 Ontario Inc. (“182 Ontario”). Neither Mr. Rotsztain nor 182 Ontario are parties to the lawsuit in the U.S. Mr. Rotsztain was an officer of 182 Ontario and also acted as counsel for the corporation.

B. The Parties

[2] Hospira Healthcare India Private Limited (“Hospira India”), is a corporation incorporated under the laws of India.

[3] Hospira Inc. is a corporation incorporated under the laws of the U.S. State of Delaware.

[4] Mr. Rotsztain is a lawyer at Kronis, Rotsztain, Margles, Cappel LLP in Toronto, where he has practiced law since his call to the Ontario bar in 1975. He had been an officer and director of 182 Ontario.

[5] 182 Ontario was a corporation incorporated under the laws of the Province of Ontario in or around 2010. 182 Ontario was dissolved in or around 2020.

C. Background Facts

[6] This application arises out of litigation commenced by Apotex Corp. against Hospira in the Supreme Court of the State of New York, Country of New York bearing the Index No. 653460/2020 (the “U.S. Action”). Apotex Corp v Hospira Healthcare India Private Limited and Hospira, Inc, is a litigation dispute involving a Development, Manufacturing, Supply and Commercialization Agreement (the Agreement). Under the Agreement, the parties to the U.S. Action agreed to develop and commercialize certain generic injectable antibiotics in the United States.

[7] The parties in the U.S. Action are Apotex Corp., a Delaware corporation, as plaintiff, and Hospira Healthcare India Private Limited, an Indian corporation and Hospira Inc., a Delaware corporation, as defendants.

[8] On June 1, 2018, Apotex, the Plaintiff in the U.S. Action, sued Hospira Healthcare India Private Limited, the Defendant (and Applicant herein), in the District Court for the Southern District of New York (the District Court), alleging breach of contract and various tort and quasi-contract claims (the Federal Action). Apotex later added Hospira Inc. to the Federal Action and alleged breach of contract, unfair trade practices, and antitrust claims against both entities.

[9] Apotex alleged that, to mitigate its damages flowing from Hospira’s conduct, it entered into an agreement to obtain the supply of pharmaceutical products from an entity called Qilu Pharmaceuticals Co., Ltd. (“Qilu”).

[10] Hospira brought two motions to dismiss the tort and quasi-contract claims against it and the antitrust claims against both entities. While the motions were pending, Hospira filed a partial answer and counterclaim (the Counterclaim), alleging that Apotex knowingly breached the exclusivity and non-compete provisions of the Agreement by secretly contracting with a different supplier, Qilu, and effected its scheme to switch suppliers by setting up the Respondent shell company, 182 Ontario, to enter into the supply agreement with Qilu on Apotex’s behalf.

[11] The District Court granted the Applicants’ partial motions to dismiss, leaving only state-law contract and unfair trade practices claims in the Federal Action, over which it declined to exercise jurisdiction and dismissed the Federal Action on February 19, 2020.

[12] On August 3, 2020, Apotex re-filed its case in the State Court (i.e., the U.S. State Action), re-asserted the contract and unfair trade practices claims, and added back in tort and quasi-contract claims against the Applicants.

[13] The Applicants successfully moved to dismiss the tort and quasi-contract claims. The Applicants also re-asserted their Counterclaim for breach of contract from the Federal Action in the U.S. State Action.

[14] In its answer and counterclaim in the U.S. Action, Hospira alleges that Apotex Corp. concealed its contractual arrangement with Qilu from Hospira, by having 182 Ontario (rather than Apotex Corp. itself) serve as a nominal contractual counterparty with Qilu, with 182 Ontario later assigning its rights under the agreement to Apotex Corp. Hospira also alleges that Apotex Corp.’s agreement with Qilu breached certain provisions of an agreement between Apotex Corp. and Hospira for the supply of similar products.

[15] On or around August 16, 2021, the Supreme Court of the State of New York, County of New York, signed Letters Rogatory for International Judicial Assistance from the Superior Court of Justice in Ontario, Canada, in the U.S Action.

[16] The Letter Rogatory requests this Court’s assistance in obtaining documentary and oral evidence from Mr. Rotsztain and 182 Ontario for use in the U.S. Action. Mr. Rotsztain is required to attend a deposition for up to seven hours.

[17] The applicants filed their Counterclaim in the U.S. Action on October 12, 2021.

D. Position of the Parties

i. The Applicants

[18] The Applicants argue that the testimony and records sought are relevant and necessary for the just determination of issues that will be before the U.S. Court. The Applicants argue that the Letters Rogatory will not be unduly burdensome on the Respondents, and further submit that enforcement of the Letters Rogatory is not contrary to public policy. The Applicants argue that given the nature of the services provided by Mr. Rotsztain, the Respondents’ claim for solicitor and client privilege has no basis.

ii. The Respondents

[19] The Respondents submit that the requests covered by the Letters Rogatory is unprecedented, as they require Mr. Rotsztain, who is a non-party and a lawyer, to provide broad documentary discovery of his client’s file, and attend a videotaped deposition of up to seven hours. Mr. Rotsztain submits that he did not receive notice of, or an opportunity to participate in, the applicants’ request for the Letters Rogatory. He argues that there is no evidence that the U.S. Court was even made aware that Mr. Rotsztain is a lawyer or advised of the obvious and significant risks of his participation in the U.S. Action. The Respondents further submit that the Letters Rogatory require broad and ongoing disclosure of documents and information that are not relevant to the issues raised in the U.S. Action.

[20] The Respondents argue that Mr. Rotsztain acted for Apotex Inc. (a Canadian entity, not the plaintiff in the U.S. Action) as well as 182 Ontario until the latter dissolved in 2020. The Respondents concede that Mr. Rotsztain had been the sole officer and director of 182 Ontario, but submit that he was never paid by 182 Ontario in the capacity as an officer or director and was never involved in any stage of the business or activities of the corporation as an officer or director. The Respondents further argue that Mr. Rotsztain has voluntarily produced all relevant documents not subject to privilege, has been cross-examined on most, if not all, of the issues which the applicants might cover during the deposition, and most of his answers were that he cannot recall, or does not know, the information sought. The Respondents further maintain that the Applicants are not entitled to the privileged portions of Mr. Rotsztain’s file.

[21] The authority of an Ontario court to enforce letters rogatory is not in dispute. Mr. Rotsztain agrees with the applicants’ statement of the statutory requirements under the Canada Evidence Act, R.S.C., 1985, c. C-5 and the Ontario Evidence Act, R.S.O. 1990, c. E. 23.

E. Disposition

[22] For the reasons below, the application is dismissed.

F. Analysis

[23] This court’s statutory authority to make the order sought stems from s. 60 of the Ontario Evidence Act. The provisions, ss. 46 and 47 of the Canada Evidence Act apply. I need not determine whether the federal statute applies as the provisions are virtually identical and the statutory requirements are the same. The statutory requirements are: (i) a foreign court has authorized the obtaining of evidence; (ii) the witness whose evidence is sought is within Ontario; (iii) the foreign court is a court of competent jurisdiction; and the evidence sought relates to a proceeding pending before the foreign court, in this case, the U.S. action.

[24] The Respondents accept that the four statutory requirements are met in this case.

[25] However, the Respondents argue that none of the discretionary factors are satisfied in this case. I would agree.

[26] The enforcement of foreign letters rogatory is a discretionary judicial remedy that requires this Court to consider the principles of comity, public policy, and any prejudice to the sovereignty or the citizens of Canada: Actava TV, Inc. v. Matvil Corp., 2021 ONCA 105, 457 D.L.R. (4th) 138, at paras. 41-42 and 52.

[27] In R. v. Zingre, [1981] 2 S.C.R. 392, at p. 401, the Supreme Court of Canada articulated the following principle:

It is upon this comity of nations that international legal assistance rests. Thus the courts of one jurisdiction will give effect to the laws and judicial decisions of another jurisdiction, not as a matter of obligation but out of mutual deference and respect. A foreign request is given full force and effect unless it be contrary to the public policy of the jurisdiction to which the request is directed (see Gulf Oil Corporation v. Gulf Canada Ltd. et al., [1980] 2 S.C.R. 39) or otherwise prejudicial to the sovereignty or the citizens of the latter jurisdiction.

[28] In Actava TV, Inc., at para. 42, the Court of Appeal noted: “Thus, three elements were said to animate the enforcement of an LoR: comity, public policy of the jurisdiction to which the request is directed, and absence of prejudice to the sovereignty or the citizens of that jurisdiction.”

[29] Letters rogatory are not simply an enabling mechanism for the requesting party: Actava TV, Inc., at para. 90. The court must scrutinize the request. There must be some balancing and consideration of whether the order is “prejudicial to the sovereignty or the citizens” of the receiving state: Actava TV, Inc., at para. 90; Zingre, at p. 401.

[30] The jurisprudence establishes that the decision to grant or refuse enforcement is a discretionary one and a court may refuse to enforce letters rogatory even if the statutory conditions have been met.

[31] The Ontario Court of Appeal has endorsed six criteria articulated in Re Friction Division Products Inc. v. E. I. Du Pont de Nemours & Co. (No. 2) (1986), 56 O.R. (2d) 722 (C.A.), adopted by Blair J., as he then was, in Fecht v. Deloitte & Touche (1996), 28 O.R. (3d) 188 (Ont. Gen. Div.), at p. 194, aff’d (1997), 32 O.R. (3d) 417 (C.A.), and endorsed by the Court of Appeal in Presbyterian Church of Sudan v. Taylor (2006), 215 O.A.C. 140 (C.A.), at para. 20. Those six criteria are as follows:

1. the evidence sought is relevant;
2. the evidence sought is necessary for trial and will be adduced at trial, if admissible;
3. the evidence is not otherwise obtainable;
4. the order sought is not contrary to public policy;
5. the documents sought are identified with reasonable specificity;
6. the order sought is not unduly burdensome, having in mind what the relevant witnesses would be required to do, and produce, were the action to be tried here.

i. Is the evidence sought relevant?

[32] An affidavit sworn by Ana C. Reyes, a partner of Williams & Connolly LLP, Hospira’s counsel in the U.S. Action, is provided in support of the application. Ms. Reyes describes the purpose for which Mr. Rotsztain’s evidence is purportedly required:

The main legal issue for Hospira—whether Apotex breached the agreement—involves an examination of whether and how Apotex entered into an agreement with Qilu while it was required to source products exclusively from Hospira. The negotiation and execution of Apotex’s agreement with Qilu are consequently relevant and important issues in the U.S. Action.

[33] The parameters of relevance are determined by the U.S. pleadings: Actava TV, Inc., at para. 69.

[34] The evidence sought by letters rogatory should be directly relevant to issues raised in the foreign proceedings: Presbyterian Church, at para. 34. The Court of Appeal explained the relevance requirement, at para. 31, stating:

The importance of these criteria is perhaps obvious. Without some showing of relevance, the court may be sanctioning a fishing expedition and requiring one of its citizens to participate in a process that may be of no assistance to the foreign litigation. The need to establish necessity serves much the same purpose but is also closely related to the requirement that the evidence sought not be otherwise obtainable. Blair J. described the importance of the latter this way in Fecht, supra, at pp. 204-05.

[35] As the Court of Appeal noted in Actava TV, Inc., at para. 55, citing the Sedona authors in the U.S., if there is “any possibility the information sought may be relevant”, the information is discoverable, whereas, in Ontario the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, were amended, and restrict the scope of discovery to evidence that is “relevant to a matter in issue”. The Court noted:

As the Sedona authors state, at p. 6, “[t]he evidence must be relevant to matters actually in issue and does not include evidence that is only sought because it could lead to other matters, or ‘may’ be relevant, or may be relevant to other matters that could be in issue” (emphasis in original). Similarly, as Pamela D. Pengelley wrote in “A Compelling Situation: Enforcing American Letters Rogatory in Ontario” (2006) 85 Can. Bar. Rev. 345, at p. 353, “[c]ourts may be extremely reluctant to enforce letters rogatory that prove only that the evidence is ‘marginally relevant’ or ‘potentially relevant’” (footnotes omitted).

[36] The U.S. Action involves a Development, Manufacturing, Supply and Commercialization Agreement under which the parties to the U.S. Action agreed to develop and commercialize certain generic injectable antibiotics in the United States.

[37] In the U.S. Action, Apotex Corp. alleges that (among other things) Hospira orchestrated a scheme designed to cripple Apotex Corp.’s sterile injectable antibiotic business in the United States. Apotex Corp. seeks damages from Hospira in the hundreds of millions of dollars.

[38] The Counterclaim alleges that on February 19, 2014, Apotex set up 182 Ontario to enter into a supply agreement with Qilu on Apotex’s behalf. It is alleged that 182 Ontario entered into a side agreement around the same time wherein 182 pledged to assign its rights and obligations under its new agreement with Qilu to Apotex.

[39] In the Counterclaim, the Applicants allege that Apotex breached its exclusive supply agreement with the applicants by entering into a similar agreement with Qilu. The Applicants allege that Apotex set up 182 Ontario to enter into a supply agreement with Qilu on Apotex’s behalf, while keeping the agreement a secret from the Applicants. The Applicants further allege that on or around February 19, 2014, 182 Ontario entered into a Distribution and Supply Agreement with Qilu for the same products covered by the Hospira-Apotex Agreement. The Applicants further allege that in a side letter executed on or around the same day, 182 Ontario pledged to assign its rights and obligations under its new agreement with Qilu to Apotex. The Applicants further allege that 182 Ontario was a sham and lacked a separate corporate entity from Apotex and/or was an alter ego of Apotex.

[40] The allegations relating to 182 Ontario (and Mr. Rotsztain) are set out in paragraphs 53-55, 60, 71, 84, 85, 88, 109, 111 and 130 of the Counterclaim. Only a redacted copy of the Counterclaim is annexed as an Exhibit to the affidavit of Ms. Reyes. A portion of the allegations against the Respondents, as set out in paragraphs 53 to 55, are as follows:

53. Knowing that it could not obtain the Products from Qilu without breaching its Agreement with Hospira, Apotex ultimately utilized a shell company named 1827216 Ontario, Inc. (“1827216”) to enter into a supply agreement with Qilu on Apotex’s behalf to keep the true counter party a secret. 1827216 was a sham, and in fact lacked a separate corporate entity from Apotex and/or was an alter ego of Apotex. The nominal president of 1827216 was a partner in the law firm that represented Apotex in connection with the Qilu agreement, which further listed as the address of 1827216 that of the firm’s Ontario, Canada office. Apotex had at least two other agreements with Qilu unrelated to the Products, neither of which involved the use of a shell company. [Emphasis added]

54. Apotex exercised complete domination and control over 1827216 with respect to the agreement with Qilu and all activities associated with and/or arising out of the agreement with Qilu, including due diligence of Qilu, product development, submitting purchase orders, and paying invoices and amounts due to Qilu, (redacted in Application Record).

55. Apotex used its domination and control over 1827216 to commit a wrongful and unjust act against Hospira, namely breaching Apotex’s non-compete obligations as set forth in the Agreement. Apotex further used its domination and control over 1827216 to perpetuate a fraud against Hospira, namely hiding its breach of its non-compete obligations.

[41] The Counterclaim identifies, indirectly, Mr. Rotsztain as representing Apotex in connection with the Qilu agreement. The Applicants indicate in their factum, as follows:

The Letters Rogatory is for the examination of Mr. Rotsztain and the production of certain records in the Respondents’ possession on topics relating to the formation and corporate governance of 1827216, the relationship between 1827216 and Apotex Corp. (Apotex), and the efforts undertaken by 1827216 to enter into a supply agreement with Qilu Pharmaceutical Co., Ltd. (Qilu) on Apotex’s behalf.

[42] In her affidavit in support of the application, Ms. Reyes deposes that:

The Respondents are believed to have unique and necessary information about Apotex’s efforts to enter into an agreement with Qilu, based on Apotex’s documentary productions. Specifically, as President of 1827216 involved in the February 2014 agreements between 1827216 and Qilu, Mr. Rotsztain is believed to have personal knowledge relating to (Emphasis added):

(a) the incorporation and formation of 1827216 and the ownership, officers, directors, and personnel of 1827216;

(b) the corporate recordkeeping practices of 1827216;

(c) financial statements and records of 1827216;

(d) the relationship between 1827216 and Apotex; and

(e) efforts undertaken by 1827216 and Apotex to negotiate and enter into agreement with Qilu.

[43] The Applicants have redacted the Letters Rogatory, but some of the documents to be produced include the following:

1. All corporate records of 182 Ontario, including but not limited to certificates of incorporation, articles of incorporation, corporate charters, and minutes or records.
2. All documents sufficient to show deposits to and withdrawals of funds from 182 Ontario, including documents sufficient to show the source and/or destination of those funds.
3. All documents relating to office space, addresses, and/or telephone numbers used by 182 Ontario at any point in time after the incorporation or formation of 182 Ontario, including any leases and/or mortgages signed by 182 Ontario.
4. All communications between any employee of Apotex and Jack Rotsztain regarding 182 Ontario and/or Qilu.
5. All documents relating to any interactions between 182 Ontario and Qilu.
6. All documents relating to the payment of invoices, directly or indirectly through Apotex, to Qilu by 182 Ontario.
7. All documents sufficient to show the profits and losses of 182 Ontario at all times after the incorporation or formation of 182 Ontario.
8. All documents relating to the payment or guarantee of 182 Ontario’s debts by Apotex.
9. All documents relating to the use of any property leased or owned by 182 Ontario by Apotex or the use of any property leased or owned by Apotex by 182 Ontario.

[44] In my view, the request for documents is so broad that it is, as the Respondents suggest, a fishing expedition. The disclosure would not be compelled in Ontario. In this case, the Applicants claim that the “Respondents are believed to have unique and necessary information” in relation to Mr. Rotsztain’s representation of Apotex in connection with the Qilu agreement. The Letters Rogatory were obtained before the Counterclaim was issued based on information obtained during the course of the prior proceedings. As it happens, Mr. Rotsztain never acted for Apotex Corp., who is the party plaintiff in the U.S. Action.

[45] While I will say more about the public policy requirement below, I note that the Respondents are non-parties. In Ontario, production of documents from non-parties are governed by r. 30.10 of the Rules of Civil Procedure. Pursuant to r. 30.10 (1), production is ordered, with leave of the court, where the document is relevant to a material issue in the action: r. 30.10(1)(a), and it would be unfair to require the moving party to proceed to trial without having discovery of the document: r. 30.10(1)(b). The requirements of these two rules are discussed, extensively, in Actava TV, Inc., at paras. 56 and 57. The Court of Appeal recognized that there will be differences, noting: “the comity of nations upon which international legal assistance rests does not require precise reciprocity” between the laws of Canada and the laws of the requesting state: see also Perlmutter, at para. 63, it is for this very reason that that Court underlined that: “differences in discovery between Canada and the U.S. highlight the need to be attentive to all of the elements in the LoR analysis including sovereignty and the justice of the request”: Actava TV, Inc., at para. 57.

[46] The Court of Appeal noted that the broader scope of discovery in the U.S. is not a bar per se to enforcement, but the court in Ontario must be satisfied that the requirements of Ontario law are met: Actava TV, Inc., at para. 68 and Presbyterian Church, at para. 32.

[47] The case law in Ontario has established "material issue" in the context of rule 30.10 to mean “if determined in favour of a party, would influence the court toward finding in favour of such party in the action”: Ontario (Attorney General) v. Stavro (1995), 26 O.R. (3d) 39 (C.A.). In Ontario, an examining party may not go beyond the pleadings in an effort to find a claim or defence that has not been pleaded. Overbroad or speculative discovery is known colloquially as a “fishing expedition” and it is not permitted. See Cominco Ltd. v. Westinghouse Can. Ltd. (1979), 11 B.C.L.R. 142 (C.A.); Allarco Broadcasting Ltd. v. Duke (1981), 26 C.P.C. 13 (B.C.S.C.).

[48] In this case the Applicants indicate that the evidence is being sought for the purpose of the trial of the U.S. Action and will be adduced to establish the applicants’ defences and to support its Counterclaim for breach of contract. The applicants allege Mr. Rotsztain was involved on behalf of Apotex Corp. (the U.S. corporation) to negotiate an agreement with Qilu relating to the development, manufacture and supply of the subject generic antibiotic injectable drug products. On the evidence, Mr. Rotsztain never acted for Apotex Corp. (the U.S. corporation). Mr. Rotsztain never acted for any of the parties involved in the U.S. Action. Mr. Rotszain acted for Apotex (Canadian subsidiary) as well as 186 Ontario, strangers to the U.S. Action. It is not clear to the court how all corporate records, all documents pertaining to profits and losses, documents evidencing “all” communications between the Respondents and “any” employee, to name a few, would be relevant to a material issue in the U.S. Action. The discovery, both documentary and oral, required to be produced by the requests from the Respondents, non-parties, would span records created between 2010 and 2020 and include records not even incidentally related to or connected to any material issue, or any issue for that matter, in the U.S. Action.

[49] While not a factor in my determination, I note that the information in the Letters Rogatory suggest that it was drafted before the Counterclaim was refiled and outlined the information that the Applicants to obtain from the Respondents.

[50] As for the deposition, which the case law indicates should be considered separately, the proposed areas to be covered are so broad that they suffer the same fate. The questions, set out below, speak for themselves. They are:

1. The incorporation and formation of 1827216 Ontario, Inc., including but not limited to minutes or records of meetings among 1827216 Ontario, Inc.’s board of directors and corporate committees, and any related topics involving the corporate separateness (or lack thereof) between 1827216 Ontario, Inc. and Apotex.
2. The ownership, officers, directors, and personnel of 1827216 Ontario, Inc.
3. The corporate recordkeeping practices of 1827216 Ontario, Inc.
4. The corporate nature of 1827216 Ontario, Inc., including but not limited to the capabilities and needs of 1827216 Ontario, Inc. related to pursuing and entering into a long-term supply and distribution agreement with a pharmaceutical manufacturer related to generic sterile antibiotic injectables.
5. Communications between any employee of Apotex and Mr. Rotsztain regarding 1827216 Ontario, Inc. and/or Qilu. (a) All corporate records of 182 Ontario, including but not limited to certificates of incorporation, articles of incorporation, corporate charters, and minutes or records of meetings among 182 Ontario’s board of directors and corporate committees; (b) All documents sufficient to show the assets and liabilities of 182 Ontario at all times after the incorporation or formation of 182 Ontario; (c) All documents sufficient to show the ownership, officers, directors and personnel of 182 Ontario at all times after the incorporation of 182 Ontario; (d) All documents to show deposits to and withdrawals of funds from 182 Ontario, including documents sufficient to show the source and/or destination of those funds; (e) All documents relating to office space, addresses, and/or telephone numbers used by 182 Ontario at any point in time after the incorporation or formation of 182 Ontario, including any leases and/or mortgages signed by 182 Ontario; (f) All communications between any employee of Apotex and Mr. Rotsztain regarding182 Ontario and/or Qilu; (g) All documents relating to any interactions between 182 Ontario and Qilu; (h) All documents relating to the payment of invoices, directly or indirectly through Apotex, to Qilu by 182 Ontario; (i) All documents sufficient to show the profits and losses of 182 Ontario at all times after the incorporation or formation of 182 Ontario; (j) All documents relating to the payment of guarantee of 182 Ontario’s debts by Apotex; and (k) All documents relating to the use of any property leased or owned by 182 Ontario by Apotex or the use of any property leased or owned by Apotex by 182 Ontario.

[51] On the evidence before the court, the information sought is part of the pre-trial discovery, pursuant to which the court may consider the broader discovery rights available in the U.S.: see, Zingre, at p. 402. In Actava TV, Inc., at para. 68, the Court of Appeal reiterated the Court’s earlier comments made in Presbyterian Church stating: “If the request seeks “evidence in terms so wide that they go well beyond” the issues in the litigation, the relevance requirement will not have been met: Presbyterian Church, at para. 35.” In this case, the scope of documents sought is so broad and the topics to be covered at the deposition is so wide and open-ended that they go beyond the pleadings and amount to a fishing expedition.

[52] I note that Mr. Rotsztain indicates that he has produced relevant documents not subject to privilege and has been cross examination on the same topics to be covered on the deposition.

[53] With respect to the first requirement of the test, the Applicants have not established that the documents sought or the topics to be covered at the deposition are relevant.

ii. Is the evidence sought necessary for trial and will it be adduced at trial, if admissible?

[54] Ms. Keyes deposes that the evidence is being sought for the purpose of the trial of the U.S. Action and will be adduced to establish the applicants’ defences and to support its Counterclaim for breach of contract. Aside from this general and broad statement, there is no evidence before the court to indicate that the evidence sought is in fact necessary for trial and will be adduced at trial. A similar summary appears in the Applicants’ factum including a general statement that “(t)he determination of the issues that will be before the State Court at trial depends on the documents sought in this Application. The information sought is required for trial and will be adduced at trial, if admissible.”

[55] I am not satisfied, on the evidence, that the Applicants meet the second requirement of the test.

iii. Is the evidence not otherwise obtainable?

[56] The Applicants indicate that they have attempted to obtain this evidence from Apotex in a cooperative manner but have failed. I am not satisfied that the evidence cannot be obtained from others. I am mindful that “precise reciprocity” is not required in Ontario. In order to obtain an order against a nonparty for productions or to obtain leave to examine a nonparty, the moving party must establish “that the moving party has been unable to obtain the information from other persons whom the moving party is entitled to examine for discovery, or from the person the party seeks to examine”: see r. 31:10(2)(a), in the case of discovery of a non-party. The jurisprudence further establishes that with respect to documentary productions, that the moving party is not able to obtain the documents from the non-party, in the case of documentary production, despite requests for production.

[57] There are important policy considerations to be balanced in determining whether an order should be made to compel a non-party, who is a stranger to the action, to produce documents. In Actava TV, Inc., the Court of Appeal revisited two of its earlier decisions wherein the Court held that resort to r. 30.10 of the Rules of Civil Procedure should only be resorted to in exceptional circumstances. Non-parties should be immune from the costly, instructive and time-consuming discovery process. The Ontario Court of Appeal balanced the requirements of r. 30.10 and the impact on the non-party (and tangentially Canadian sovereignty) in determining that “In this case, I have no hesitation in concluding that had a comparable request for production been made in a proceeding in Ontario under r. 30.10, the order would not have been granted.” Justice Pepall stated at paras. 95 – 96:

In Morse Shoe (Canada) Ltd. v. Zellers Inc. (1997), 100 O.A.C. 116 (C.A.), at para. 19, this court stated that orders under r. 30.10 should not be made as a matter of course but only in exceptional cases. And in Ontario (Attorney General) v. Ballard Estate (1995), 129 D.L.R. (4th) 52 (Ont. C.A.), at p. 56, this court affirmed that “[s]ave in the circumstances specifically addressed by the rules, non-parties are immune from the potentially intrusive, costly and time-consuming process of discovery and production.” As the court observed, “[b]y its terms, rule 30.10 assumes that requiring a party to go to trial without the forced production of relevant documents in the hands of non-parties is not per se unfair”: Ballard Estate, at p. 56.

[96] In Castel & Walker: Canadian Conflict of Laws, loose-leaf (2020-Rel. 4), 6th ed. (Markham, Ont.: LexisNexis Canada, 2004), Professor Walker writes, at para. 6.2(c): “Particularly in the case of non-parties, the court will be guided by the principle of proportionality, and will be disinclined to permit an order that does not reflect the local standards for examining non-parties” (footnote omitted)…[Emphasis added.]

[58] The evidence before the court is that the Respondents have complied with the request for information, except for privileged information and documents. In contrast, aside from the attempts to obtain the information from Apotex, Ms. Keyes does not address any attempts made to obtain the information from Qilu or, for that matter, Alex Glasenberg who is alleged to have had control over the operations of 182 Ontario. Paragraph 71 of the Counterclaim pleads as follows:

71. Alex Glasenberg’s control over the operations of 1827216 illustrates that the scheme to switch to Qilu while keeping Hospira in the dark involved the highest levels of Apotex’s management. Mr. Glasenberg worked (and continues to work) as a financial executive at Apotex and its affiliated companies. He is closely connected to Apotex’s founder, Barry Sherman. After Sherman’s death in December 2017, Mr. Glasenberg became a trustee of the Sherman estate, and Mr. Glasenberg is the Chief Financial Officer of the Sherman family holding company “Sherfam,” thereby managing the family’s investments.

[59] In any event, on the evidence before me. Mr. Rotsztain has produced non-privileged documents from his file and indicates that he does not have any further information that he can provide. He has been cross examined on this affidavit filed in response to the application and his undertakings and refusals stemming from the cross-examination.

[60] I am therefore not satisfied, on the evidence before me, that the evidence is not otherwise obtainable.

iv. Is the order sought contrary to public policy?

[61] The Letters Rogatory suggests that Mr. Rotsztain may be deposed on all matter of evidence, but he will not be required to testify on privileged matters, which I deduce to be at trial. The relevant portion of the document reads:

Mr. Rotsztain’s and 1827216’s documents and testimony will be available as evidence and for all purposes allowable by law in this matter, including evidence at the trial in this case. Hospira intends to introduce evidence obtained from Mr. Rotsztain and 1827216 at trial to establish its defenses and its claim for breach of contract. Mr. Rotsztain and 1827216 shall not be required to testify on matters that are privileged under Canadian law.

[62] In my view, the deposition of Mr. Rotsztain would violate public policy and Canadian sovereignty. The Counterclaim itself pleads that Mr. Rotsztain represented Apotex in connection with the Qilu agreement, the very agreement that is the subject matter of the U.S. Action. The Applicants nonetheless wish to examine him and obtain documents from him on the basis that had also been the nominal President of 182 Ontario.

[63] The Respondents contend that the scope of the documents and information sought by the Letters Rogatory would result in Mr. Rotsztain disclosing solicitor-client documents and information. The Respondents point to a sample of questions asked during Mr. Rotsztain’s cross-examination, which they contend appeared designed to elicit solicitor-client privileged information, including the following:

(a) Who retained him as the lawyer for 182 Ontario, whether there is a written retainer agreement, and the scope of his retainer. (b) If he was “consulted” by Apotex Corp. in relation to written interrogatories in the U.S. Action. (c) If he was involved in “preparing” or “reviewing” written correspondence sent by Apotex Corp’s U.S. counsel (Foley & Lardner LLP) to Hospira’s counsel in the U.S. Action; and (d) If he discussed the decision to dissolve 182 Ontario with anyone at Apotex Corp.

[64] The Court of Appeal has described the factors, except the public policy criteria, as “useful guideposts: Actava TV, Inc., at para. 50, Lantheus Medical Imaging Inc. v. Atomic Energy of Canada Ltd., 2013 ONCA 264, 115 O.R. (3d) 161, at para. 61, and most recently in Glegg v. Glass, 2020 ONCA 833, 155 O.R. (3d) 41, at para. 51.

[65] In Actava TV, Inc., at para. 48, the Court of Appeal, enumerated three instances pulled from the cases where Canadian sovereignty has conflicted with comity, and where the Canadian courts have refused to order testimony for use in foreign proceedings in a number of situations. They include:

i) a request for production of documents which was vague and general; ii) discovery was sought against a non-party to the litigation, in violation of local laws of civil procedure; and iii) the main purpose of the examination was to serve as a “fishing expedition”, a procedure which was not allowed in Canadian courts.

In my view, the three examples cited by the Court of Appeal are present in the facts before me.

[66] The Supreme Court of Canada held in R v. Lavallee, Rackel & Heintz v. Canada; White, Ottenheimer & Baker v. Canada (Attorney General), 2002 SCC 61, [2002] 3 S.C.R. 209 and R. v. Fink, 149 O.A.C. 394 (note) (S.C.C.), that solicitor-client “is a principle of fundamental justice and a civil right of supreme importance in Canadian law” and “must remain as close to absolute as possible to retain its relevance”.

[67] The applicants argue that Mr. Rotsztain has admitted on cross-examination that he did not act as a lawyer for the Apotex (U.S.) and also admitted that he was unable to separate his role as a lawyer for 182 Ontario from his role as the President, secretary, and sole director for 182. In my view, this is immaterial. The evidence is undisputed that Mr. Rotsztain was also counsel to 182 Ontario.

[68] In Ontario, Mr. Rotsztain, as a lawyer, is governed by the Law Society of Ontario’s Rules of Professional Conduct and is duty bound to protect the client’s confidential and privileged information. In Lavallee, Arbour J., writing for the Court underlined that the privilege belongs to the client, not the lawyer. She explained, as follows, at para. 24:

It is critical to emphasize here that all information protected by the solicitor-client privilege is out of reach for the state. It cannot be forcibly discovered or disclosed, and it is inadmissible in court. It is the privilege of the client and the lawyer acts as a gatekeeper, ethically bound to protect the privileged information that belongs to his or her client. Therefore, any privileged information acquired by the state without the consent of the privilege holder is information that the state is not entitled to as a rule of fundamental justice.

[69] There is a presumption that the court will enforce the request from the foreign court unless it would be contrary to Canadian public policy: Zingre; Treat America Limited v. Nestlé Canada Inc., 2011 ONCA 560, 282 O.A.C. 311, at para. 12; Presbyterian Church, at para. 23.

[70] The applicants rely on the 1989 decision of R v. Harris, [1989] O.J. No. 3129 (Dist. Ct.) for the proposition that in some circumstances, the roles of corporate solicitor and corporate officer can be “so closely connected as to render the solicitor and client privilege meaningless” —particularly where the lawyer himself is confused as to when he was wearing his solicitor or officer hat. I agree with the Respondents that Harris is distinguishable. That case involved the admissibility of documents seized, pursuant to a search warrant, from the defendant’s former lawyer during a criminal trial for fraud.

[71] Given the allegation of a “side letter” or side agreement, I would point out that neither side has addressed the fiduciary duty owed by an officer and direction to the corporation (see: Business Corporations Act (Ontario), R.S.O. 1990, c. B.16, s. 134(1)(a)) and the impact, if any, on the requests before me. Accordingly, I have not taken this potential issue into consideration.

[72] In Lavallee, Arbour J. noted “the need for the full protection of the privilege is activated” in the context of a criminal investigation: para. 23.

[73] In Actava TV, Inc., Pepall J.A. referred to the following passage by Hoy J.A. in Lantheus, at para. 59, quoting Doherty J.A. in France (Republic) v. De Havilland Aircraft of Canada Ltd. (1991), 3 O.R. (3d) 705 (C.A.), at para. 37, stating:

The test requires that the court, consider whether the request imposes any limitation or infringement on Canadian sovereignty, and whether justice requires an order for the taking of commission evidence. The considerations encompassed by the phrase “Canadian sovereignty”… include a[n] assessment of whether the request would give extra-territorial authority to foreign laws which violate relevant Canadian or provincial laws…; whether granting the request would infringe on recognized Canadian moral or legal principles…; and whether the request would impose an undue burden on, or do prejudice to, the individual whose evidence is requested.

[74] The Court of Appeal has described Canadian sovereignty as including the following considerations in a series of cases (see: Actava TV, Inc., at para. 51 and Glegg, at para. 49; France (Republic), at para. 37), as follows:

(i) whether the Letter Rogatory violates relevant Canadian or provincial law; (ii) whether granting the request would infringe on recognized Canadian moral or legal principles; (iii) whether the order would impose an undue burden on the entity of whom the request is made; or (iv) whether the order would do prejudice to that entity. In addition, the justice of the enforcement request must be weighed in the balance.

[75] It is reasonable to also consider r. 30.10 requirements in addressing the impact of the requested order on Canadian sovereignty: Actava TV, Inc., at para. 93; Fecht, at p. 420. The Court of Appeal has indicated that r. 30.10 can provide guidance on whether the term “Canadian sovereignty” has been met: Actava TV, Inc., at para. 93.

[76] On a review of the materials before me, questions have already been asked of Mr. Rotsztain that are subject to solicitor-client privilege. Schedule A and B to the Letters Rogatory are so broad that they intruded into solicitor-client territory including the request for “(a)ll communications between any employee of Apotex and Jack Rotsztain regarding 1827216 Ontario, Inc. and/or Qilu”; “(a)ll documents relating to any interactions between 1827216 Ontario, Inc. and Qilu”’; “(a)ll documents relating to office space, addresses, and/or telephone numbers used by 1827216 Ontario, Inc. at any point in time after the incorporation or formation of 1827216 Ontario, Inc., including any leases and/or mortgages signed by 1827216 Ontario, Inc.”, to name a few.

[77] The fact that Mr. Rotsztain had been an officer, does not remove the protection of confidentiality and solicitor-client privilege attached to documents and information. Mr. Rotsztain confirmed that he acts as counsel for Apotex Inc. (the Canadian, as opposed to the U.S. entity), and that he acted as counsel for 182 Ontario until it was dissolved in 2020.

[78] In my view, given the broad requests and areas to be canvassed at the deposition, both the documents and information are identified in the Letters Rogatory are presumptively protected, by solicitor-client privilege: Glegg at para. 62; Descôteaux v. Mierzwinkski, [1982] 1 S.C.R. 860, at pp. 892-93 S.C.R.; Maranda v. Richer, 2003 SCC 67, [2003] 3 S.C.R. 193, at paras. 30-33; Sopinka, Lederman & Bryant, The Law of Evidence in Canada, 5th ed. (Toronto: LexisNexis Canada, 2018), at §14.76-14.88.

[79] In balancing the justice of enforcement, I take into consideration the following considerations which weigh in favour of the respondents:

i. Mr. Rotsztain was counsel to 182 Ontario. Regardless of his role as an officer of 182 Ontario, he owes the client, 182 Ontario a duty of confidentiality and is professionally obligated, in Ontario, not to disclose privileged and confidential information. ii. The Applicants contend that solicitor and client privilege is meaningless in the circumstances. iii. The information sought in the Letters Rogatory would be onerous, encompassing, as it does, records and documents over a 10-year period for a now dissolved corporation. In addition, if enforced, the Respondents would not be relieved from unduly burdensome production and discovery which would presumptively include solicitor-client documents and information, as well as irrelevant documents and information with no linkage to the issues in dispute between the parties in the U.S. Action. iv. Both the breadth of the request for production and the scope of the topics to be addressed and the deposition are wide and well beyond the scope of what would be permitted under r. 30.10 of the Rules of Civil Procedure or contemplated by r. 30.11 of the Rules, had the request been made in Ontario. The requests essentially amount to a fishing expedition. v. A seven hour discovery of a non-party, by Ontario standards is, in my view, onerous – though this is a neutral factor. Rule 31.05.1 of the Rules of Civil Procedure provides that “[n]o party shall, in conducting oral examinations for discovery, exceed a total of seven hours of examination, regardless of the number of parties or other persons to be examined, except with the consent of the parties or with leave of the court.” And given that a party is only granted leave to examine a non-party if the party can show that they are unable to obtain the information parties that they are otherwise entitled to examine, a seven-hour deposition of a non-party is, in my view, onerous.

[80] The Applicants have not exhausted other routes of obtaining the information sought on the requests. Regardless, in balancing the justice of the enforcement request with the interests of Canadian nationals who are not parties to the US Action, I am satisfied that the breadth of the documentary request would impose an undue burden on the Respondents. Given the suggestion permeating the Applicant’s argument of tortious activities and potential fraud, enforcing the orders may well result in prejudice to the Respondents, especially considering Mr. Rotsztain’s dual role as officer of 182 Ontario and counsel to the corporation. Granting the order would infringe on recognized Canadian legal principles of respect to the sanctity of solicitor-client confidentiality and privilege and, in the result, would amount to an infringement on Canadian sovereignty to enforce these Letters Rogatory from the U.S. Court which would require a lawyer to produce solicitor-client documents and information under oath. Moreover, just as in Actava TV, Inc., I am satisfied that, though not determinative of the issue, if similar requests were made in Ontario for documentary production from a non-party under r. 30.10 of the Rules, or for leave to examine the non-parties under r. 31.10 of the Rules, the orders would not be granted.

v. The documents sought are identified with reasonable specificity

[81] The Applicants submit the Letters Rogatory lists 11 categories of documents which are clearly described in the Schedules. I disagree.

[82] The Respondents submit that the scope of the requests is virtually unlimited and apply to almost every conceivable type of document that may be in the corporation’s (and/or Mr. Rotsztain’s) possession. Mr. Rotsztain deposed that he was willing to produce documents in his possession that are responsive to appropriate requests identified in the Letters Rogatory and that are not privileged, and counsel for the Respondents indicate that he has done so. The Respondents argue that the Applicants are seeking “all” corporate and governance records and documents pertaining to 182 Ontario effectively over a 10-year period, from the date of its incorporation in 2010, until it was dissolved in 2020, and impose an ongoing and continuing disclosure obligation to provide any new documents that come into his possession under any of the enumerated categories. This observation is reasonable as there is no date limitation in the Letters Rogatory.

[83] The Respondents are non-parties. The scope and breadth of the requests go beyond the allegations in the Counterclaim that Mr. Rotsztain was involved on behalf of Apotex in negotiating an agreement with Qilu relating to the development, manufacture, and supply of certain generic antibiotic injectable drug products. The Applicants have not established the relevance of the productions sought and the connection to the material issues in the U.S. Action.

[84] Given the breadth of the documents to be produced, the repeated use of the word “all” preceding each request, it cannot be said that the documents requested are identified with any reasonable specificity.

vi. Is the order sought unduly burdensome?

[85] The Applicants submit that any solicitor-client privilege has been rendered meaningless and should not apply in this case. They are of the view that lawyers are not exempt from being called as witnesses in Ontario and, they submit that in any event, they seek to examine Mr. Rotsztain in his capacity as President, officer and director of 182 Ontario and not as counsel. They point to the fact that he is obliged to keep records for five years post-dissolution under Ontario’s Business Corporations Act, R.S.O. 1990, c. B. 16.

[86] Given the expansive nature of the requests identified under the first pre-condition, above, in my view, enforcement of the Letters Rogatory which essentially entails production of corporate, governance, financial and other information of 182 from the time it was incorporated to the time it was dissolved in 2020 would be unduly burdensome to the Respondents, especially having regard to the requirement for production and to submit to discovery imposed by the law of Ontario on non-parties.

G. Costs

[87] The parties are encouraged to resolve the issue of costs. If the parties are unable to do so, the Respondents shall deliver their Costs Submissions within 15 days of the date of this decision, and the Applicants, a further 15 days thereafter.

A.P. Ramsay J.

Released: July 25, 2023

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

HOSPIRA HEALTHCARE INDIA and PRIVATE LIMITED and HOSPIRA INC. Applicant – and – JACK A. ROTSZTAIN and 1827216 ONTARIO INC. Respondent

REASONS FOR JUDGMENT A.P. Ramsay J.

Released: July 25, 2023