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Digest of the Week – Hearsay Evidence Inadmissible at Hearing to Determine Entitlement to and Quantum of Damages

Digest of the Week – Hearsay Evidence Inadmissible at Hearing to Determine Entitlement to and Quantum of Damages

Hearsay evidence is inadmissible at a hearing to determine entitlement to and quantum of damages in a section 8 NOC action

Pfizer Canada Inc. v. Teva Canada Ltd.
2016 CarswellNat 1932
Federal Court of Appeal

Evidence --- Hearsay — Principled approach — Miscellaneous

Plaintiff developed generic version of defendant's drug, alleging that associated patent was invalid — Defendant's prohibition application was dismissed — Plaintiff brought action for damages under s. 8 of Patented Medicines (Notice of Compliance) Regulations — Trial judge issued made various determinations relevant to quantum of damages, including that plaintiff met burden of showing it had capacity to supply market in hypothetical world — Defendant appealed — Appeal allowed — Trial judge wrongly admitted hearsay evidence from plaintiff's former vice-president to meet plaintiff's burden to prove that it could have supplied its version of drug in sufficient quantities in hypothetical world — Vice-president could testify about his direct observations from visit to manufacturer's facility, but he had no first-hand knowledge of operating capacity of facility, manufacturer's actual ability and willingness to add equipment, and how long production took at facility at relevant time — Vice-president was presented with emails and documents that he had not written and was asked to comment on them — Emails were hearsay tendered for purpose of proving what manufacturer could have and would have done in hypothetical world, not just to prove fact that they were made, and there was no "corroborative evidence" exception to hearsay — Emails were not reliable or necessary, as there was no explanation why manufacturer's employees were not called to give direct evidence and such employees presumably had incentive in emails to tell plaintiff, as client, that its needs could be met — All mischief associated with hearsay evidence was present, as all defendant could do was test vice-president's honesty about what he was reading from documents he did not author and what he and his colleagues had heard from manufacturer's personnel — Shielding those who actually knew first-hand about whether manufacturer could supply desired quantities at relevant times in hypothetical world from any testing of their memory or honesty while indirectly admitting their say-so on that issue worked great unfairness to defendant — Trial judge's admission of evidence that should have been excluded was error that might have affected outcome of case.
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