Ottawa, Ontario, August 14, 2006
PRESENT: The Honourable Mr. Justice O'Keefe
BETWEEN:
[1]FILM CITY ENTERTAINMENT LTD.,
[2] ABBA MOVIES COMPANY LIMITED,
[3] CENTURY CREATOR COMPANY LIMITED,
[4] CHINA STAR PICTURES LIMITED,
[5] EMPEROR MOTION PICTURE (HK) LIMITED,
[6] EMPEROR MULTIMEDIA GROUP (HK) LTD.,
[7] GREAT ENTERTAINMENT LTD.,
[8] I-ANIMATION LIMITED,
[9] L.S. ENTERTAINMENT GROUP INC.,
[10] MATRIX PRODUCTIONS COMPANY LIMITED,
[11] MEDIA ASIA FILMS (BVI) LTD.,
[12] MEDIA ASIA FILMS LTD.,
[13] MEGA STAR PRODUCTION LIMITED,
[14] MEI AH FILM PRODUCTION COMPANY LTD.,
[15] ONE HUNDRED YEARS OF FILMS COMPANY LIMITED,
[16] S&W ENTERTAINMENT LIMITED,
[17] TEAMWORK MOTION PICTURES LTD.,
and [18] UNIVERSE ENTERTAINMENT LTD.
and
JOHN DOE AND JANE DOE AND ALL PERSONS,
PARTNERSHIPS, AND CORPORATIONS WHO ARE
CARRYING ON BUSINESS FROM THE FOLLOWING UNITS
OF THE PACIFIC MALL, 4300 STEELES AVE. E., MARKHAM, ONTARIO:
UNIT A-58, UNIT B-5, UNIT B-59, UNIT C-12, UNIT D-17, and UNIT D-69
REASONS FOR JUDGMENT AND JUDGMENT
O’KEEFE J.
[1] This is a motion by the defendant, “Unit B-5”, legally known as 1642312 Ontario Ltd. (hereinafter called Unit B-5) for:
1. An order pursuant to paragraph 399(1)(b) of the Federal Court Rules, SOR/98-106 (the Rules) to set aside my order dated May 16, 2005, which reviewed the motion heard pursuant to the order of Mr. Justice Yves de Montigny dated May 2, 2005, as it relates to Unit B-5;
2. An order adjourning the return of the review motion to allow Unit B-5 to prepare and file its responding materials and to conduct cross-examinations and extending the terms of the order of Mr. Justice de Montigny dated May 2, 2005; and
3. An order granting Unit B-5 its costs of this motion, payable forthwith.
[2] Mr. Justice de Montigny issued an Anton Piller order in this matter on May 2, 2005 and that order was reviewed by me on May 16, 2005 without the presence of the defendant, Unit B-5. I issued an order on May 16, 2005 continuing the relief granted in the Anton Piller order until the final determination of the matters in dispute in this action or until otherwise ordered by this Court. I also awarded costs payable by the defendant, Unit B-5, in the amount of $5,000, payable forthwith.
[3] The defendant, Unit B-5, has requested that I set aside my order pursuant to Rule 399(1)(b) as the defendant believed a request had been made by counsel for an adjournment of the review hearing.
[4] In order to have me set aside or vary my order, the defendant, Unit B-5, must show that it failed to appear by mistake and Unit B-5 must disclose a prima facie case why the order should not have been made.
[5] The Anton Piller order was served on the defendant, Unit B-5, on May 6, 2005. On that day, Ms. Chen, the president of Unit B-5 attempted to contact her lawyer. On May 12, 2005, Ms. Chen contacted another lawyer, Mr. Long, who was supposed to request an adjournment of the matter for her so that she could have further time to retain an intellectual property lawyer who could assist with the handling of the review motion. She paid this lawyer a $3,000 retainer. This lawyer wrote a letter to the supervising solicitor for the Anton Piller search, requesting an adjournment of the matter. That lawyer did not receive the request.
[6] Ms. Chen, believing that the adjournment had been arranged, met with Serge Anissimoff, a lawyer who practices in the intellectual property area. Ms. Chen retained his services on May 24, 2005. At that time, Ms. Chen did not know that my order of May 16, 2005 had been granted. Ms. Chen learned of my order on June 3, 2005, after Mr. Anissimoff learned from the Federal Court Registry that my order had issued.
[7] Ms. Chen paid $2,217.58 to Mr. Long for the services rendered.
[8] I am satisfied, based on these facts, that Unit B-5 did not attend the review hearing by accident. This is not a case where the defendant stood by and did nothing.
[9] The defendant, Unit B-5, must also disclose a prima facie case as to why my order should not have been made.
[10] The defendant submitted that there was an absence of requisite intent or knowledge of copyright infringement to support the grant of the Anton Piller order. In Aldrich et. al. v. Struk et. al. (1984), 8 C.P.R. (3d) 369 (B.C.S.C.), the Court stated that there was a strong prima facie case as the plaintiff had a strong claim to copyright and the defendant had full knowledge of the copyright in the works. In the present case, there is a dispute as to the service of the cease and desist letter. Ms. Chen states in her affidavit that the letter was not served on her or on the defendant, Unit B-5. The affidavit of service filed before me on the review hearing was served on Pacific Video, not Pacific Mall. Although the process server, in a subsequent affidavit, stated that Pacific Video should have read Pacific Mall, the Court is still left with Ms. Chen’s affidavit stating that the warning letter was not served on the defendant, Unit B-5. As well, the process server said he served the letter on an employee by the name of Ms. Leung. In her affidavit, Ms. Chen stated the defendant, Unit B-5, had no employee by that name.
[11] The plaintiffs stated that the defendant was an importer of the goods and by virtue of subsection 27(3) of the Copyright Act, R.S.C. 1985, c. C-42, knowledge is irrelevant. The plaintiffs stated that the defendant, Unit B-5, is an importer because of Ms. Chen’s statement in paragraph 5 of her affidavit which reads:
DC amongst other places, sources the DVDs from a wholesaler’s market in China, specifically located in the city of Guang Zhow, in the province of Guang Dong and takes delivery of the same here in Canada. DC offers the DVDs for sale at its premises.
[12] I do not take this statement to show that Unit B-5 imported the DVDs. In fact, it states that Unit B-5 takes delivery of the goods here in Canada. It seems to me that this would indicate that someone other than Unit B-5 actually imported the goods. I am of the view that the evidence does not support the application of subsection 27(3) of the Copyright Act.
[13] Because there is new evidence that the warning letter was not properly served on the defendant (which means the defendant lacked knowledge of infringement), the defendant has made out a prima facie case as to why my order should not have been made.
[14] I am of the view that my order of May 16, 2005 should be set aside and that the matter be adjourned to a date to be fixed to allow the defendant to prepare and file its responding materials and to carry out any cross-examinations. The relief sought by the plaintiffs in paragraphs 2 and 3 of their notice of motion filed May 11, 2005, shall be continued until the motion is dealt with by the Court.
[15] The motion of the defendant, Unit B-5, is allowed as noted above. I will not deal with the defendant’s remaining arguments.
[16] There shall be no order as to costs.
JUDGMENT
[17] IT IS ORDERED that:
1. My order in this matter dated May 16, 2005 is set aside and the matter is adjourned to a date to be fixed to allow the defendant, Unit B-5, to prepare and file responding materials and to allow time for any cross-examinations.
2. The relief sought by the plaintiffs in paragraphs 2 and 3 of their notice of motion filed May 11, 2005, will be continued until the motion is dealt with by the Court.
3. There shall be no order as to costs on this motion.
ANNEX
The relevant provisions of the Federal Court Rules, SOR/98-106 are as follows:
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8. (1) On motion, the Court may extend or abridge a period provided by these Rules or fixed by an order.
(2) A motion for an extension of time may be brought before or after the end of the period sought to be extended.
. . .
189. (1) A defendant who claims to be entitled to relief against a plaintiff may make a counterclaim instead of bringing a separate action.
(2) A counterclaim shall be included in the same document as the statement of defence.
(3) A statement of defence and counterclaim shall contain a second style of cause identifying the plaintiff by counterclaim and the defendants to the counterclaim.
399. (1) On motion, the Court may set aside or vary an order that was made
(a) ex parte; or
(b) in the absence of a party who failed to appear by accident or mistake or by reason of insufficient notice of the proceeding,
if the party against whom the order is made discloses a prima facie case why the order should not have been made.
. . .
(3) Unless the Court orders otherwise, the setting aside or variance of an order under subsection (1) or (2) does not affect the validity or character of anything done or not done before the order was set aside or varied. |
8. (1) La Cour peut, sur requête, proroger ou abréger tout délai prévu par les présentes règles ou fixé par ordonnance.
(2) La requête visant la prorogation d'un délai peut être présentée avant ou après l'expiration du délai.
. . .
189. (1) Le défendeur qui fait valoir contre le demandeur un droit de réparation peut, au lieu d'intenter une action distincte, faire une demande reconventionnelle.
(2) La demande reconventionnelle et la défense sont réunies dans le même document.
(3) La défense et demande reconventionnelle comporte un second intitulé qui donne les noms du demandeur reconventionnel et des défendeurs reconventionnels.
399. (1) La Cour peut, sur requête, annuler ou modifier l'une des ordonnances suivantes, si la partie contre laquelle elle a été rendue présente une preuve prima facie démontrant pourquoi elle n'aurait pas dû être rendue:
a) toute ordonnance rendue sur requête ex parte;
b) toute ordonnance rendue en l'absence d'une partie qui n'a pas comparu par suite d'un événement fortuit ou d'une erreur ou à cause d'un avis insuffisant de l'instance.
. . .
(3) Sauf ordonnance contraire de la Cour, l'annulation ou la modification d'une ordonnance en vertu des paragraphes (1) ou (2) ne porte pas atteinte à la validité ou à la nature des actes ou omissions antérieurs à cette annulation ou modification. |
The plaintiffs rely on section 27 of the Copyright Act, R.S.C. 1985, c. C-42, for their claim of copyright infringement, which sets out the following:
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27. (1) It is an infringement of copyright for any person to do, without the consent of the owner of the copyright, anything that by this Act only the owner of the copyright has the right to do.
(2) It is an infringement of copyright for any person to
(a) sell or rent out,
(b) distribute to such an extent as to affect prejudicially the owner of the copyright,
(c) by way of trade distribute, expose or offer for sale or rental, or exhibit in public,
(d) possess for the purpose of doing anything referred to in paragraphs (a) to (c), or
(e) import into Canada for the purpose of doing anything referred to in paragraphs (a) to (c),
a copy of a work, sound recording or fixation of a performer's performance or of a communication signal that the person knows or should have known infringes copyright or would infringe copyright if it had been made in Canada by the person who made it.
(3) In determining whether there is an infringement under subsection (2) in the case of an activity referred to in any of paragraphs (2)(a) to (d) in relation to a copy that was imported in the circumstances referred to in paragraph (2)(e), it is irrelevant whether the importer knew or should have known that the importation of the copy infringed copyright.
. . . |
27. (1) Constitue une violation du droit d'auteur l'accomplissement, sans le consentement du titulaire de ce droit, d'un acte qu'en vertu de la présente loi seul ce titulaire a la faculté d'accomplir.
(2) Constitue une violation du droit d'auteur l'accomplissement de tout acte ci-après en ce qui a trait à l'exemplaire d'une oeuvre, d'une fixation d'une prestation, d'un enregistrement sonore ou d'une fixation d'un signal de communication alors que la personne qui accomplit l'acte sait ou devrait savoir que la production de l'exemplaire constitue une violation de ce droit, ou en constituerait une si l'exemplaire avait été produit au Canada par la personne qui l'a produit:
a) la vente ou la location;
b) la mise en circulation de façon à porter préjudice au titulaire du droit d'auteur;
c) la mise en circulation, la mise ou l'offre en vente ou en location, ou l'exposition en public, dans un but commercial;
d) la possession en vue de l'un ou l'autre des actes visés aux alinéas a) à c);
e) l'importation au Canada en vue de l'un ou l'autre des actes visés aux alinéas a) à c).
(3) Lorsqu'il s'agit de décider si les actes visés aux alinéas (2)a) à d), dans les cas où ils se rapportent à un exemplaire importé dans les conditions visées à l'alinéa (2)e), constituent des violations du droit d'auteur, le fait que l'importateur savait ou aurait dû savoir que l'importation de l'exemplaire constituait une violation n'est pas pertinent.
. . . |