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Date: 20061129

Docket: T-1655-04

Citation: 2006 FC 1448

OTTAWA, ONTARIO, November 29, 2006

PRESENT:     The Honourable Mr. Justice von Finckenstein









1565385 ONTARIO INC.








[1]               The Moving Party (Respondents in the style of cause) has brought a motion under Rule 397(1) of the Federal Courts Rule, 1998, SOR/98-106, asking that I reconsider my decision in this case dated October 25, 2006, reported at 2006 FC 1284.




[2]               In particular, the Moving Party requests that I reconsider three points:

a.                   Amend paragraph 1 of my order as it allegedly does not accord with the reasons given. In the Moving Party’s view it should be restricted ‘to the blank CD-R’s which were transferred by Fuzion to FTC on consignment on April 1, 2003;


b.                  Amend paragraph 2 of the order as it implies that FTC and Yeung are required to make payment of any levy that may be found to be due.


c.                   Amend paragraph 5 dealing with costs as the court did not find that the transfer from Fuzion to FTC was done in order to defraud creditors.



[3]               The Responding party (the Applicant in the style of cause) opposes this motion arguing a) there is no authority in Rule 397(1) to make changes of the sort requested. In its view, this is not a motion for reconsideration but a disguised appeal. Secondly, it maintains that the order reflects the reasons and there is no necessity for changing the original order.


[4]               The jurisprudence in this area is quite clear. Motions under Rule 397(1) are meant to deal with inadvertent mistakes or omissions. (See Halford v. Seed Hawk Inc., 2004 FC 455 at paras. 9-11; Khroud v. Canada (Minister of Citizenship and Immigration), [2002] FCT 1157 at para. 10 (F.C.T.D.); Pharmascience Inc. v. Canada (Minister of Health), 2003 FCA 333 at para. 12.)


[5]               The points that the Moving Party puts forward do not involve slip-ups or omissions but constitute a deliberate re-interpretation of the original order so as to align it to an outcome the Moving Party finds more acceptable.


[6]               The Court does not have the authority to accede to the Moving Party’s request. In any event, it is not prepared to change the original order as it corresponds with its written reasons. The Court accedes to the points advanced in the Responding Party’s factum at paragraphs 11, 12, 13, 19 and 24. The court hereby adopts the rationale of those paragraphs and makes it its own . For ease of reference, these paragraphs are set out in the attached Annex 1.


[7]               Accordingly, this motion is dismissed. As the Responding Party did not ask for any costs, none will be awarded.





THIS COURT ORDERS that this motion be dismissed.



“Konrad W. von Finckenstein”



Annex 1


[Re point (a) of paragraph 2]


11.       The Respondents’ argument is plainly wrong.  Paragraph 1 of the Order is supported by paragraph 29 of the Court’s reasons, which allows the Applicant to audit the records of FTC without limitation to determine if private copying levies are owed by that company.


[29] I am prepared to pierce the corporate veil to the extent of allowing CPCC to audit the books of FTC to ascertain whether any of the blank disks sold by FTC are subject to the levy under Part VIII of the Copyright Act.


12.       Moreover, it is evidence from the reasons that the consignment sale from Fuzion to FTC was not the only factor leading the Court to order an audit of FTC’s records.  At paragraph 31 the Court referred to the consignment sale as “another reason why the audit should be ordered”. (our emphasis)


13.       The Court pierced the corporate veil and ordered an audit of FTC’s books because Yeung’s transfer of Fuzion’s business to FTC frustrated CPCC’s audit and was done for an improper purpose.  At paragraph 27 the Court concluded that:


…one cannot help but come to the conclusion that the effect of the actions of FTC and Yeung is to defeat the legitimate statutorily authorized aims of CPCC to audit the books of a vendor of blank disc who may be subject to levies.  It thus, amounts to an “improper purpose” in the sense enunciated by Davidson, J. in Lockharts, supra.


[Re point (b) of paragraph 2]


19.       Once again there is no inadvertent mistake in the Order justifying its reconsideration.  Paragraph 2 does not order payment by FTC or Yeung, it grants the Applicant the right to return before this Court in the event no payment is made or “no suitable arrangement is arrived at between the parties”.  This is clear from paragraphs 40 and 42 of the reasons:


[40] With respect to the Applicant’s request for an order regarding payment of levies, the cost of the levy and interest on levies outstanding, I am of the view that such an order would be premature.




[42] The Applicant will obtain its order mandating the audit. Once the audit is complete and if payment of levies is found to be due and no payment is made or no suitable arrangement is arrived at between the parties, the Applicant is free to come back to this court to ask for such an order.  Such application may be supported by evidence obtained as a result of the audit evidencing the outstanding levy debt, interest thereon and the cost of the audit.  I shall remain seized of this matter and such application, if required, will be heard at the earliest possible date.

[our emphasis]



[Re point (c) of paragraph 2]


24.       In any event, the Court’s reasons are in accord with the costs order.  The Court found that:


a.                   “CPCC’s auditors attended at Fuzion’s premises […] but were refused access to some of the company’s records” [paragraph 9];


b.                  “a request by CPCC to FTC to be allowed to complete the audit of Fuzion by auditing the books of FTC was turned down” [paragraph 18];


c.                   “The evidence shows that FTC, directed by Yeung, took over the business of Fuzion […] the effect of the actions of FTC and Yeung is to defeat the legitimate statutorily authorized aims of CPCC to audit the books of a vendor of blank disc who may be subject to levies […] it thus, amounts to an improper purpose”. [paragraph 27];


d.                  “an order must also be directed at Yeung […] he had possession of or access to pertinent records of Fuzion, and as a director and officer of FTC, he has access to FTC’s records as well” [paragraph 30].









DOCKET:                                          T-1655-04


STYLE OF CAUSE:                          Canadian Private Copying Collective (CPCC)

                                                            v. Fuzion Technology Corp. et al







AND ORDER:                                   von Finckenstein J.


DATED:                                             November 29, 2006    






DAVID R. COLLIER                                                              FOR THE APPLICANT


IGOR ELLYN, Q.C.                                                               FOR THE RESPONDENTS

ORIE H. NIEDZVIECKI                                                         1565385 ONTARIO INC.

                                                                                                AND MICKEY YEUNG     





OGILVY RENAULT LLP                                                       FOR THE APPLICANT



ELLYN-BARRISTERS                                                           FOR THE RESPONDENTS

TORONTO                                                                             1565385 ONTARIO INC.

                                                                                                AND MICKEY YEUNG

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