Date: 19980218
Docket: T-2398-96
BETWEEN:
IRENE McCUTCHEON,
Plaintiff,
- and -
LUTZ HAUFSCHILD,
MELANIE GOLD ARTADVISORY LTD.,
MELANIE GOLD, BOLLUM'S BOOKS LTD.,
STARBUCKS CORPORATION,
THE VANCOUVER ART GALLERY ASSOCIATION,
WIC TELEVISION LTD., (FORMERLY BRITISH COLUMBIA
TELEVISION BROADCASTING SYSTEM LTD.),
BC TELECOM INC., PETER CUNDILL & ASSOCIATES LTD.,
HEMLOCK PRINTERS LTD., CHAPTERS INC.,
W.H. SMITH CANADA INC., THE CANADIAN
CRAFT MUSEUM ASSOCIATION and THE CANADIAN
CRAFT MUSEUM FOUNDATION,
Defendants.
REASONS FOR ORDER
MR. JOHN A. HARGRAVE, PROTHONOTARY
[1] This action is for copyright infringement, the Plaintiff alleging that the Defendant, Lutz Haufschild, copied two of her works, or parts of them, when he produced a number of successful collages. Discoveries took place in February of 1997: since then the Plaintiff has spent much effort in tracking down additional publications of Mr. Haufschild's works, collages largely in the form of stained glass panels and windows, some of which are in the form of a series of panels, which she says infringe on her works. Both sides now bring procedural matters to the Court so they may get on with the litigation.
[2] The Plaintiff wishes to amend her statement of claim and her reply, to obtain additional documents and discovery answers from the Defendant and to have further discovery of Mr. Haufschild.
[3] The Defendant, Mr. Haufschild, wishes further examination for discovery of Ms. McCutcheon in order to deal with new allegations in the statement of claim and with one hundred and three recently produced documents and bundles of documents which supplement the twenty-nine documents produced under cover of the Plaintiff's original affidavit of documents.
[4] There are several difficulties with this litigation. First, it has gone on too long, although this is a mutual fault. Further, without some management, the litigation may fail to come to any speedy conclusion, an unfortunate state of affairs, for the cost of the litigation may well exceed the realistic return to the Plaintiff. Finally, all of this is complicated by the fact that Mr. Haufschild now lives in Germany.
CONSIDERATION
[5] The Plaintiff's works at issue, Sand Scribble #108 and Sand Scribble #109, two of a larger series of works, are fanciful abstract arrangements of crosses, hearts and stripes which were exhibited at the Bau-Xi Gallery in Vancouver in 1985. Now there is no property in hearts and crosses as such, however there may well be property in specific hearts and crosses and their spacial arrangement as an artistic work, to wit Sand Scribble #108 and Sand Scribble #109. The Defendant appears to have obtained good commercial mileage with adaptations of all or of parts of Sand Scribble #108 and Sand Scribble #109. Some of the plagiarism is obvious; in other instances it is less so; and in some instances the Plaintiff may be over-reaching. However it is not my task to compare works by Ms. McCutcheon and Mr. Haufschild and decide which parts of the latter are original. Rather, I must decide on the propriety of copious amendments to the statement of claim and the discovery rights flowing from the amendments.
Amendment of Statement of Claim
[6] Generally a timely and proper amendment ought to be allowed if it assists in determining the real issues and the substance of the dispute, on its merits, between the parties, so long as the result is not an injustice incapable of being compensated in costs. However an amendment which, assuming it to be true, will add nothing relevant, or which is certain to be futile, ought not to be allowed.
[7] Counsel argued a number of factors, supporting and opposing the amendment, including whether the Plaintiff ought to have moved much earlier to amend, perhaps after learning many new facts on discovery of the Defendant Haufschild in February of 1997, or at least before Mr. Haufschild left to live in Germany in November of 1997, whether the amendments were generally too speculative, whether the amendments, which are said to offer no surprises, might delay a trial, whether the rejection of the amendments at this point would result in further parallel proceedings and whether the proposed amendments are so open-ended that the matter will not go to trial in a timely manner. These are all factors to consider. The sought after amendment is also opposed on a more objective basis of whether the amendment is good at law.
[8] The statement of claim, as filed, is a readable narrative of forty paragraphs with four appended schedules illustrating two of the Plaintiff's works and two of the Defendant Haufschild's etched and stained glass panels, all of which illustrates a sound prima facie case. The Plaintiff now wishes to add forty-eight paragraphs to the statement of claim. While the Defendant Haufschild opposes thirty-seven of the proposed additional paragraphs, his main difficulty is with paragraph 79, which is just over two pages in length.
[9] To summarize paragraph 79, the Plaintiff says that Mr. Haufschild "... produced and provided copies of and held himself out to be as the owner of copyright in: ..." some twenty works, some of which consist of a series of designs or of stained glass panels. Paragraph 79 goes on to say that Mr. Haufschild "... accordingly, authorized and caused: ..." the publishing, printing, selling or letting, distribution to the prejudice of the Plaintiff and the promotion and advertising of the infringing works and that Mr. Haufschild "authorized and caused" some thirty publications, displays and installations knowing that all of this infringed the copyright of the Plaintiff.
[10] Counsel for Mr. Haufschild submits paragraph 79 is an improper pleading in that it equates ownership of a work with authorization of publication. The evidence of Mr. Haufschild, set out in the 23 January 1998 affidavit of Brian Lee, evidence to which I give reasonable weight, is that he did authorize some publications and showings, but in many instances he did not give authorization for publication of his work. Indeed, on one occasion, after the present dispute came to light, Mr. Haufschild requested one of his works not be displayed as background in a video. From the material it is clear that Mr. Haufschild was probably unaware of other publications.
[11] Counsel for the Defendant submits that infringement requires an authorization of publication by the Defendant. An authorization is usually an active sanctioning, approving or countenancing as referred to in Apple Computer Inc. v. MacIntosh Computers Ltd. (1986) 10 C.P.R. (3d) 1 at 46 (F.C.T.D.):
| "In so far as copyright infringement is concerned a person infringes by virtue of ss. 17(1) and 3, if they 'authorize' or purport to authorize the doing of any act which is reserved to the owner of the copyright. 'Authorize' has been defined by the jurisprudence as meaning 'sanction, approve, and countenance'." (s. 17.1 is now s. 27 (1) of the current Copyright Act ). |
The concept of sanctioning, approving and countenancing is an active one. In the present instance counsel suggests that there has been no active authorization, for example, when a newspaper has written an article on a work in an exhibit it is not something sanctioned or approved by Mr. Haufschild. However, Madame Justice Reed in Apple Computer, goes on to refer to C.B.S. Inc. v. Ames Records & Tapes Ltd. (1981) 2 W.L.R. 973 at 987 - 988, a decision of the English Court of Chancery, for the proposition that indifference may reach a degree from which authorization or permission may be inferred: in Apple Computer inactivity or indifference was of such a nature that Madame Justice Reed was able to infer authorization or permission to engage in infringement.
[12] Counsel for the Defendant also referred to Muzak Corporation v. Composers, Authors and Publishers Association of Canada Ltd. [1953] 2 S.C. 182 at 193, which adds nothing to Madame Justice Reed's decision in the Apple Computer case except to confirm one should look at authorization in its ordinary dictionary sense of countenancing, sanctioning and approving and to de Tervagne v. Town of Beloeil (1994) 50 C.P.R. (3d) 419 (F.C.T.D.). In the latter case Mr. Justice Joyal looked at the type of conduct from which it might be concluded that a person in fact authorized an infringement. Among the factors to consider is whether a reasonable person would be led to conclude that a defendant sanctioned, approved or countenanced the infringement and whether that defendant should have known that his or her action or inaction would be seen by a reasonable person to be a sanctioning, approving or countenancing (p. 434). Mr. Justice Joyal then also referred to Performing Right Society Ltd. v. Ciryl Theatrical Syndicate Ltd. (1924) 1 K.B. 1 (C.A.), for the proposition that there is no permission from one who cannot control and further that one does not permit the use of a work if she or he does not know the work is being performed (Ciryl Theatrical at pp. 12 and 13).
[13] In Ciryl Theatrical, the managing director and licensee of a theatre hired a band which, in his absence, performed copyright works. The director was held not to have authorized the infringement. However Lord Justice Bankes points out, at page 9, "... that indifference, exhibited by acts of commission or omission, may reach a degree from which authorization or permission may be inferred.". Lord Justice Bankes then went on to point out that the director had no reason to anticipate or suspect that the band would play copyright works. In effect, out of all of the music available, the band chose to play two works which were not in the public domain. It is one thing for a director of a theatre to expect a band, an independent contractor with its own leader, to avoid copyright works. It is very different for an artist to expect that exhibiting and installing works, in high profile circumstances, will not be noticed, commented upon and published by third parties. Indeed, one would suspect that every artist with any ambition enthusiastically hopes for and countenances such publications.
[14] Applying all of this to the present instance, a successful artist must reasonably be taken to know that his or her works, once exhibited, will be reproduced in catalogues and reproduced and commented upon not only in publications devoted to the arts, but also in what I will refer to as trade magazines (in this instance the stained glass trade) and in the popular press. Mr. Haufschild, who makes his living as an artist, did not produce the collages for his own amusement, but rather to exhibit for a commercial purpose. Once so exhibited any reasonable person would expect publication of Mr. Haufschild's work not only in catalogues, but also in magazines devoted to the arts, in trade magazines and in the popular press. All of this is certainly arguable by the Plaintiff. Moreover, there is not only this secondary publication, by third parties, but also direct publication by Mr. Haufschild himself and this leads to another weakness in the argument that paragraph 79 of the proposed amended defence is improper at law.
[15] While it is conceivable that an artist might not be aware of publications of all of his work in various magazines and newspapers, at least half of the publications in the present instance are either installations of works, videotapes, presentations to potential buyers or exhibitions and related catalogues, and in one instance publication as a part of a grant application. All of these would certainly be actively authorized by Mr. Haufschild. As to the balance of the publications, which might well not have been actively authorized, counsel for the Defendant has the task of showing that the amendments, on this analysis, ought not to be allowed because they will be unsuccessful. This is akin to striking out a pleading. There is authority to the effect that serious issues of law, disputed points of law or uncertain points of law ought not to be determined on a summary motion to strike out, but rather should be left for decision at trial when all of the facts are known: see for example Manitoba Fisheries Ltd. v. The Queen [1976] 1 F.C. 8 at 18 (T.D.) and Vulcan Equipment Co. Ltd. v. Coats Co. Inc. (1982) 58 C.P.R. (2d) 47 at 48 (F.C.A.), leave to appeal to the Supreme Court of Canada refused 1982 (63) C.P.R. (2d) 261. In the present instance this is a disputed and uncertain point of law.
[16] Returning to the more conventional assertions, the Defendant submits that paragraph 79 and indeed a number of the other paragraphs are amendments which ought to have been made and probably could have been made a number of months ago. Perhaps most of the amendments could have been made immediately following the February 1997 examination for discovery of Mr. Haufschild even though he was not aware of all the publications of his works. Counsel for the Plaintiff submits that Mr. Haufschild, on an examination for discovery, may have forgotten or overlooked some publications of his work: all things considered, this is not a major point for Ms. McCutcheon's affidavit evidence as to the discovery of additional works, after Mr. Haufschild was questioned as to all of the publications of which he was aware on examination for discovery, is at least somewhat guarded (see paragraph 31 of the McCutcheon affidavit sworn 11 December 1997) and more in the spirit of ambush than of getting the facts out in the open so the Court can come to conclusions and the parties can either settle or progress quickly to trial.
[17] Counsel for the Defendant does make an argument about some of the amendments which I will accept. The infringement amendments refer to a reproduction of "all or a substantial part" of the two Sand Scribble works. Counsel for the Defendant submits the lack of particulars as to what part or parts infringe puts the Defendant at a disadvantage and thus the Plaintiff ought, at some stage, to be more specific. As put by Chief Justice Thurlow writing for the Court of Appeal in Northern Telecom Ltd. v. Reliable Electric Company [1986] 1 F.C. 211 at 213, a plaintiff must, generally, describe with particularity the claim which he alleges that the Defendant has violated:
| "A plaintiff must describe with particularity to the person he sues the right to which he claims to be entitled and which he alleges that the defendant has violated. That principle of pleading applies in a patent infringement action just as it does in an action for violation of any other kind of right." |
Counsel for the Defendant tried to explore this idea of a "substantial part" on examination for discovery, but the Plaintiff refused to answer. Now in some instances the infringement is fairly obvious, but in others it is not. It would save a good deal of time for the Court, if this matter does go to trial, if the parties could narrow down the part or the substantial part of the Defendant's collages which infringes. In this particular instance I am going to assume that there will be further examination for discovery of the Plaintiff, arising out of the massive amendments. The Plaintiff having pleaded an infringement through the use of her works, by a complete reproduction or by reproduction of a substantial portion of her works, that becomes a fair topic for examination for discovery and while the Plaintiff need not give particulars in the amended pleading, the Plaintiff will answer appropriate questions on discovery.
[18] All of the amendments which the Plaintiff wishes to make and to which the Defendant objects, except for one, are dealt with in my consideration of the amendment to add paragraph 79. Paragraph 83 which stands separately is inadvertently numbered 4, at page 18 of the draft amended statement of claim, under the heading "Moral Rights". Paragraph 83 pleads a postponement of limitation under s. 41 (1)(b) of the Copyright Act, the Plaintiff alleging she was not aware of any infringement which occurred more than three years before filing the statement of claim. The issue will therefore be whether the Plaintiff, by exercising reasonable diligence, might have discovered the infringement at an earlier time: see for example Warner Bros.-Seven Arts Inc. v. CESM - TV (1971) 65 C.P.R. 215 at 246. Under the circumstances this is an appropriate amendment.
[19] On balance I have decided to allow the Plaintiff to amend as set out in Schedule A to the Plaintiff's motion brief. Had the amendments been sought at an earlier stage they would be more favourably received . As it is the Plaintiff's approach seems to be that she may search indefinitely, instead of calling a halt to searching for more infringements and getting on with litigation. However, I am also aware that the Defendant may have understated his productivity, publications of his works and his commercial success, on examination for discovery and thus have contributed to the late amendment. As I say, the amendments are allowed, but on terms designed to make allowances to the Defendant for some of the prejudice suffered by tardy amendments which, in the final analysis, will likely delay the proceedings and increase cost.
[20] The Plaintiff also seeks leave to amend her reply. The substantial amendments to the statement of claim will require an amended defence. It would not be productive to file an amended reply at this time.
[21] I now turn to the additional material requested by the Plaintiff. Some of it arises out of oral examination for discovery and some are said to be documents which should have appeared in the Defendant's affidavit of documents.
Production of Tax Returns
[22] The Plaintiff seeks copies of Mr. Haufschild's income tax returns from 1985 to 1997. The Plaintiff submits that production of tax returns, including any foreign tax returns, is appropriate where there is to be an accounting of profits. Counsel for the Defendant has produced to counsel for the Plaintiff, on a confidential basis, tax returns for what he believes to be relevant years. Plaintiff's counsel seems to be saying that Mr. Haufschild's income was enhanced indirectly, the infringing works bringing him fame and thus enhancing his sale and profit from non-infringing works.
[23] Mr. Haufschild has produced works which are clearly non-infringing: see for example Exhibits DD and EE to the 3 December 1997 affidavit of Brian Lee. If the Plaintiff is saying that tax returns ought to be produced in order to establish that Mr. Haufschild did much better in some years because some unknown buyer saw an infringing work produced by Mr. Haufschild and then purchase something else, that approach is so speculative as to be irrelevant. While each instance must be examined on its own circumstances, in this instance tax returns need not be produced.
List of Installations
[24] Next, the Plaintiff seeks a complete list of all installations of Mr. Haufschild's works, including the location of each. Counsel for the Defendant points to letters of 6 November and 1 December 1997, Exhibits R and W to the Lee affidavit of 3 December 1997 and to Exhibit A to Mr. Lee's affidavit of 10 December 1997, which both confirm that counsel for the Plaintiff, or someone on her behalf, has viewed slides of all of Mr. Haufschild's work and also establish where Mr. Haufschild's recollections, as to installations and publications, are set out. Now Mr. Haufschild may not have been completely forthcoming on examination for discovery, in the February of 1997, but he seems to have made a bona fide effort to provide information and material since then. A mere suspicion, on the part of the Plaintiff, that there may be further works, is insufficient grounds upon which to require yet a further list of works and installations.
Production of Grant Applications
[25] The Plaintiff wishes a list of all the grants Mr. Haufschild has applied for or has applied for and received. The Plaintiff submits that she is entitled to know of such in order to then determine if her work was used at any time in order to apply for or gain a commission or grant. This is a reasonable request. The list, going back to the date of the first exhibition of Sand Scribble #108 and Sand Scribble #109, will be provided.
Production of Video Tapes
[26] The Plaintiff seeks a copy of any video showing or explaining Mr. Haufschild's method of producing collages. Mr. Haufschild is aware of one video, but says he does not have a copy of it. That ends the matter, except to the extent that the Plaintiff might well seek, on the further written discovery of Mr. Haufschild, to determine the source of the video and obtain it for herself.
Further Discovery of Mr. Haufschild
[27] The Plaintiff also seeks, as an oral adjunct to her motion, further discovery of Mr. Haufschild. Given the nature of the amendments and the additional material now available, this is a reasonable request.
[28] Further discovery of Mr. Haufschild would have been simple and inexpensive had the Plaintiff sought her major amendment of the statement of claim in a timely manner, shortly after discoveries. In the event of any subsequent discovery of relevant information a further amendment would then have been a minor undertaking. The result of the tardy amendment is that Mr. Haufschild has gone to Germany. The cost of having him return for oral discovery would be out of all proportion to any benefit to be gained from oral discovery as opposed to written discovery under Rule 466.1. Written discovery will be pursuant to a schedule set out in my Order.
Further Discovery of Ms. McCutcheon
[29] The Defendant seeks further discovery by reason of the amendment of the statement of claim and the massive number of documents declared by the Plaintiff following February 1997 discoveries.
[30] It is in the interests of justice that the new pleas and additional documents be fully explored in order to narrow issues, discover the relevance of some documents which counsel for the Plaintiff acknowledges might only be tangentially relevant and to save time at trial. Again, it is important, in order to provide closure to preparation for trial and to move quickly to trial, that there be a schedule.
CONCLUSION
[31] The statement of claim may be amended as sought. The Plaintiff shall file the amended statement of claim within 10 days. The Defendant's defence and the Plaintiff's reply shall follow within the usual time limits, thus closing pleadings.
[32] The Defendant shall provide a list of grant applications and grants received, from the date of publication of Sand Scribble #108 and Sand Scribble #109, within 15 days. Within 30 days of the Defendant providing an amended defence, counsel for the Plaintiff may provide counsel for the Defendant with a list of written discovery questions. The Defendant shall have 10 days within which to challenge any of those questions under Rule 466.1 (3). The Defendant shall provide a written response to the discovery questions within a further 30 days.
[33] The Defendant may have further discovery of Ms. McCutcheon, arising out of amendment to the statement of claim and the documents produced since the earlier discovery. This further
discovery shall take place within 30 days of closing of pleadings.
[34] Hopefully the further discovery will lead to some resolution of the action. If that is not the case counsel should consider a pre-trial settlement conference, for the alternative, a full trial may, in addition to the inherent uncertainties of litigation, result in legal costs out of all proportion to any realistic recovery.
(Sgd.) "John A. Hargrave"
Prothonotary
Vancouver, British Columbia
18 February 1998
FEDERAL COURT TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
HEARING DATED: February 2, 1998
COURT NO.: T-2398-96
STYLE OF CAUSE: IRENE MCCUTCHEON
v.
| LUTZ HAUFSCHILD, MELANIE GOLD ARTADVISORY LIMITED, et al. |
PLACE OF HEARING: Vancouver, BC
REASONS FOR ORDER OF
JOHN A. HARGRAVE, PROTHONOTARY
dated February 18, 1998
APPEARANCES:
Ms. Diane Weinrath for Plaintiff
Mr. Michael Manson for Defendant
SOLICITORS OF RECORD:
Clark, Wilson
Vancouver, BC for Plaintiff
Smart & Biggar
Vancouver, BC for Defendant