Date: 20061129
Docket: T-1655-04
Citation: 2006 FC 1448
OTTAWA, ONTARIO, November 29, 2006
PRESENT: The Honourable Mr. Justice von Finckenstein
BETWEEN:
CANADIAN
PRIVATE COPYING COLLECTIVE (CPCC)
Applicant
and
FUZION TECHNOLOGY CORP.
and
1565385 ONTARIO INC.
and
MICKEY YEUNG
Respondents
REASONS FOR ORDER AND ORDER
[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.
ORDER
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].
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS
OF RECORD
DOCKET: T-1655-04
STYLE OF CAUSE: Canadian
Private Copying Collective (CPCC)
v. Fuzion Technology Corp. et
al
MOTION DEALT WITH IN WRITING WITHOUT THE
APPEARANCE OF PARTIES
REASONS FOR ORDER
AND ORDER: von Finckenstein J.
DATED: November
29, 2006
WRITTEN REPRESENTATIONS BY:
DAVID R. COLLIER FOR
THE APPLICANT
IGOR ELLYN, Q.C. FOR
THE RESPONDENTS
ORIE H. NIEDZVIECKI 1565385
ONTARIO INC.
AND
MICKEY YEUNG
SOLICITORS OF RECORD:
OGILVY RENAULT LLP FOR
THE APPLICANT
MONTRÉAL
ELLYN-BARRISTERS FOR
THE RESPONDENTS
TORONTO 1565385
ONTARIO INC.
AND
MICKEY YEUNG
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