Society of Composers, Authors and Music Publishers of Canada v. Landmark Cinemas of Canada Ltd., 2003 FCT 425

Date: 20030410

Docket: T-633-92

Neutral citation: 2003 FCT 425

EDMONTON, ALBERTA, THURSDAY, THE 10^TH DAY OF APRIL, 2003.

Present:           THE HONOURABLE MADAM JUSTICE HENEGHAN

BETWEEN:

SOCIETY OF COMPOSERS, AUTHORS AND

MUSIC PUBLISHERS OF CANADA

                                                                                                                                                          Plaintiff

- and -

LANDMARK CINEMAS OF CANADA LTD.,

BRIAN MCINTOSH, TOWN CINEMA THEATRES

(1975) LTD., ROKEMAY THEATRES LTD.,

COSMOPOLITAN CINEMAS LTD.

- and-

TOWNE CINEMA THEATRES (1975) LTD., CEECO

INVESTMENTS INC., AND PLACID DEVELOPMENTS

LIMITED, CARRYING ON BUSINESS AS THE

BANFF CINEMA PARTNERSHIP

                                                                                                                                                    Defendants

                                               REASONS FOR ORDER AND ORDER

[1]                 This motion is an appeal against the order of Prothonotary Aronovitch made on July 11, 2002, upon the motion of the Society of Composers, Authors and Music Publishers of Canada ("SOCAN") to amend its statement of claim and add additional defendants. In her order, Prothonotary Aronovitch granted the motion and joined Brian McIntosh in his personal capacity, Rokemay Theatres Limited, Towne Cinema Theatres (1975) Limited, Cosmopolitan Cinemas Ltd. (CEECO Investments Inc.) and Placid Developments Limited carrying out business as Banff Cinema Partnership (the "new defendants"). The new defendants now appeal that order.

FACTS

[2]                 SOCAN commenced this action by statement of claim issued on March 18, 1992. In that statement of claim, it alleged that Landmark Cinemas of Canada Ltd. ("Landmark") infringed its copyright through Landmark's role in allowing unauthorized performances of musical works forming part of motion pictures shown at theatres operated by Landmark.

[3]                 On April 7, 1994, a representative of Landmark, Mr. McIntosh, was questioned in a discovery examination. The plaintiff says that at that time he confirmed that Landmark operated theatres and exhibited motion pictures.

[4]                 The plaintiff subsequently claimed that by July 23, 1999, Landmark took a different position on the issue of operating theatres. The plaintiff says that in 1999 Landmark asserted that it neither operated motion picture theatres nor exhibited motion pictures, at that time, or at any time in the past.

[5]                 Further discovery examination was conducted of Mr. McIntosh. The plaintiff says that Landmark's reversal of position in 1999 involved a claim that the infringing activities were actually carried out by the new defendants. The plaintiff here relies on answers given by Mr. McIntosh in a discovery examination conducted on May 16 and 17, 2001.

[6]                 On June 26, 2001, the plaintiff served a notice of motion seeking the addition of parties as new defendants and amendments to its statement of claim. On July 23, 2001, the Prothonotary issued an order setting out time limits for filing and serving materials relative to the plaintiff's motion and a hearing date was scheduled for October 17, 2001. Pursuant to the order of July 23, 2001, the responding parties were to file and serve their motion records no later than October 1, 2001.

[7]                 The defendant and the proposed new defendants failed to serve and file their materials by October 1, 2001, and on October 10, 2001, the Prothonotary issued a direction, noting the absence of materials from the responding parties and directing that any party wishing to be heard on October 17, 2001, was required to serve and file its motion record by the end of the day October 15, 2001. Materials were filed on behalf of the defendant and proposed new defendants on October 12, 2001.

[8]                 The matter came on for hearing on October 17, 2001. The Prothonotary offered the parties an adjournment but neither party wished to avail of that, and the matter proceeded. After hearing submissions, the Prothonotary issued an order adjourning the motion. Her order also included a direction to the plaintiff concerning the sufficiency of its evidence in support of its motion. The order stated, in part, as follows:

ENDORSEMENT

Not being satisfied with the sufficiency of the evidence tendered and submissions made by the plaintiff and the corresponding submissions of the responding parties. I shall adjourn the plaintiff"s motion under paragraph 3 above [in relation to the joinder of the Defendants], to allow the plaintiff to file further and better affidavit evidence with supplementary submissions and an opportunity to the responding parties to reply.

The draft amended statement of claim does not constitute evidence. The plaintiff will accordingly provide further and better evidence of the facts relied on in support of the proposed amendments to the statement of claim and the submissions of the plaintiff in that regard.

The plaintiff is to distinguish the proposed amendments to add defendants and amendments consequential thereon from other amendments sought to be made. These are to be addressed separately in the plaintiff's submissions. The plaintiff is also to make submissions at law in respect of the scope and application of the Rules relied upon by the plaintiff and the grounds for the plaintiff's application to add Mr. McIntosh as defendant, in his personal capacity.

[9]                 The defendant sought reconsideration of this order by notice of motion filed with the Court on October 26, 2001. By order dated March 22, 2002, the Prothonotary denied the defendant's motion for reconsideration.

[10]            By order dated July 11, 2002, the Prothonotary granted the plaintiff's motion for joinder of the new defendants and amendment of its statement of claim. That order provided, in part, as follows:

ENDORSEMENT

I concur with and adopt the submissions of the plaintiff and accordingly will allow the addition of the proposed defendants as parties to this action, as well as the consequential and other proposed amendments to the claim.

In particular, I am satisfied that the proposed defendants are necessary to ensure that all matters in dispute in this claim may be completely determined and that they ought to be bound by the Court's determination, in this proceeding. I include in this category the addition of Brian McIntosh in his personal capacity. If, as the test requires in the circumstances, the material facts alleged in respect of Mr. McIntosh's activities are accepted as proven, they are sufficient to found a cause of action.

[11]            The new defendants now appeal the order of July 11, 2002.

SUBMISSIONS OF THE MOVING PARTIES

[12]            The new defendants argue that the order of July 11, 2002, is wrong and the result of an unfair procedure followed by the Prothonotary upon the initial hearing of the motion on October 17, 2001. They argue that the Prothonotary unfairly and improperly entered the arena by adjourning the hearing on October 17, 2001, on her own motion, and issuing directions to the plaintiff as to filing further materials to overcome the deficiencies in the materials originally provided to support its motion.

[13]            The new defendants say that was unfair and prejudicial to them. They argue that if the evidence and submissions made by the plaintiff were insufficient on October 17, 2001, the motion should have been dismissed without further recourse to the Court.

[14]            The new defendants submit that the Prothonotary erred in principle by allowing the plaintiff to make amendments to its statement of claim, which amendments were substantive in nature and subject to Rule 75 of the Federal Court Rules, 1998. The new defendants submit that the Prothonotary erred in treating these amendments as consequential amendments subject to Rule 104(2). They say that the effect of the amendments is to overcome a limitation period which was granted by section 41 of the Copyright Act, R.S.C. 1985, c. C-42 (the "Act").

SUBMISSIONS OF THE RESPONDING PARTIES

[15]            The plaintiff argues that the Prothonotary did not err in law nor fail to properly exercise her discretion in granting the motion to join the new defendants. It submits that she properly dealt with the matter pursuant to Rule 104 and that it was unnecessary to consider the general rules relating to amendments of pleadings pursuant to Rule 75.

[16]            Furthermore, the plaintiff argues that neither the defendant nor the new defendants appealed the order of October 17, 2001 and that by filing their defences the new defendants have attorned to the jurisdiction of the Court.

[17]            The plaintiff argues that the Prothonotary did not act unfairly in adjourning the hearing on October 17, 2001, and in issuing directions to the plaintiff in the matter of filing further evidence. The plaintiff also notes that pursuant to that order of October 17, 2001, the new defendants filed further submissions.

[18]            The plaintiff argues that the context of the order under appeal is critical. It is an order made by the Prothonotary as part of case management. Relying on the decision of Justice Gibson in Microfibres Inc. v. Annabel Canada Inc. (2001), 214 F.T.R. 256, the plaintiff submits that considerable deference is to be accorded to the discretionary orders of a case management judge or prothonotary.

[19]            The plaintiff submits that the question of joinder is essentially the domain of a case management judge. Here, the plaintiff appropriately sought to add the new defendants pursuant to Rule 104. New parties should be added when such addition is necessary to ensure that all matters in dispute can be completely determined and that the new parties ought to be bound by the Court's decision. The Court need only be satisfied that the additions are not completely spurious and that any inconvenience caused is justified. In this regard the plaintiff relies on Eastman Kodak Co. v. Hoyle Twines Ltd. (1985), 5 C.P.R. (3d) 264 (F.C.T.D.). Furthermore, the plaintiff argues that a delay in bringing a motion to join a party is not a bar to joinder and here relies on Canastrand Industries Ltd. v. "Lara S" (The) (1991), 48 F.T.R. 188.

[20]            The plaintiff argues that its claim is based on a continuing infringement of copyright by the defendants which is an ongoing cause of action. Consequently, the plaintiff says that the argument concerning loss of a limitation period or the availability of a limitation period is a matter for trial and should be raised as a defence at that time. The Respondent relies on Eastman Kodak, supra, in this regard.

ANALYSIS

[21]            The standard of review applicable to an appeal from a decision of a Prothonotary is addressed in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (C.A.). Such an order ought not to be disturbed on appeal unless it is clearly wrong in the sense that the exercise of discretion was based upon a wrong principle or misapprehension of the facts, or where the order raises a question vital to the final issue in the case, then the reviewing judge ought to exercise her discretion de novo.

[22]            The matter of joinder of parties and amendment of pleadings here does not raise a question vital to the final disposition of the case. Accordingly, this Court cannot exercise the Prothonotary's discretion de novo. Accordingly, the question is whether the Prothonotary's order of July 11, 2002, was "clearly wrong".

[23]            The motion before the Prothonotary sought the joinder of parties pursuant to Rule 104.

Rule 104(1)(b) is relevant and provides as follows:

[24]            The prevailing consideration in this Rule is that all parties necessary for the complete and effective determination of an action should be before the Court, and be subject to the decision.

[25]            An order for joinder of parties involves the exercise of discretion and in the present case, the Prothonotary was vested with that discretion. It appears from her endorsement on the order of July 11, 2002, that she applied the proper principles to the motion before her.

[26]            Rule 104(2) provides as follows:

[27]            Insofar as the Prothonotary granted leave to the plaintiff to amend its statement of claim, following the joinder of the new defendants, it appears she had authority to make that order having regard to Rule 104(2). The addition of the new defendants as parties to this action does not deprive them of their limitation defence. Time and again the Courts have said that the applicability of a limitation defence depends upon the evidence adduced. I refer to Canastrand Industries Ltd., supra, at paragraph 8, Watt v. Canada (Transport Canada), [1998] F.C.J. No. 49 (C.A.)(QL), leave to appeal to SCC refused, [1998] S.C.C.A. No. 118 and Kibale v. The Queen (1990), 123 N.R. 153 (F.C.A.).

[28]            In the present case, the new defendants are not deprived of reliance on a limitation defence. However, that defence is a matter properly to be considered in the context of the whole action and following the testing of evidence at trial.

[29]            The new defendants argue that the Prothonotary erred in the manner in which she exercised her discretion in granting the plaintiff's motion. I have earlier stated the general test applicable to review of a discretionary decision of the Prothonotary. However, a further word is merited having regard to the fact that the decision here under appeal was made by the Prothonotary, in the context of case management.

[30]            In Sawridge Band v. Canada, [2002] 2 F.C. 346 (C.A.), Mr. Justice Rothstein, for the Federal Court of Appeal, spoke about the level of deference due to decisions made by case management judges. At paragraph 11 he said as follows:

We would take this opportunity to state the position of this Court on appeals from orders of case management judges. Case management judges must be given latitude to manage cases. This Court will interfere only in the clearest case of a misuse of judicial discretion. This approach was well stated by the Alberta Court of Appeal in Korte v. Deloitte, Haskins and Sells (1995), 36 Alta. L.R. (3d) 56, paragraph 3, and is applicable in these appeals. We adopt these words as our own.   

[31]            In the later decision of Microfibres Inc., supra, Justice Gibson adopted this reasoning and found that this high degree of deference should apply equally to decisions made by Prothonotaries in the course of case management. He made the following statements at paragraphs 11 and 12:

I conclude that Mr. Justice Rothstein's comments should apply by analogy to discretionary decisions of prothonotaries made in the course of case management in complex matters such as this. Case management prothonotaries must be given latitude to manage cases in the same manner in which case management judges are entitled to such latitude. In the words of the Alberta Court of Appeal quoted by Mr. Justice Rothstein:

... case management judges [and in this in the context of this Court I include case management prothonotaries] in ... complex matters must be given some "elbow room" to resolve endless interlocutory matters and to move these cases on to trial.

Case Management prothonotaries, like case management judges, are familiar with the proceedings that they are managing to a degree that a trial judge, sitting on appeal from a Prothonotary's discretionary decision in such a context, usually cannot be.

In short then, I regard the wisdom reflected in Mr. Justice Rothstein's comments on behalf of the Court of Appeal, by analogy, to represent a gloss on the standard of review of discretionary orders of prothonotaries reflected in the Aqua-Gem decision, supra.

[32]            In the result, and having regard to the submissions made by counsel for the moving parties, I am not persuaded that the Prothonotary's decision was based upon a wrong principle or upon a misapprehension of the facts or in any other way, amounted to a misuse of judicial discretion.

[33]            The appeal is dismissed, costs in the cause.

                                                  ORDER

THIS COURT ORDERS that the appeal is dismissed, costs in the cause.

        "E. Heneghan"           

J.F.C.C.

                          FEDERAL COURT OF CANADA

                                       TRIAL DIVISION

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                   T-633-92

STYLE OF CAUSE: SOC. OF COMPOSERS ET AL v. LANDMARK CINEMAS OF CANADA ET AL

PLACE OF HEARING:                                   EDMONTON, AB

DATE OF HEARING:                                     APRIL 8, 2003

REASONS FOR ORDER

AND ORDER OF:    HENEGHAN, J

DATED:                      APRIL 10, 2003

APPEARANCES:

Charles E. Beall                                                    FOR PLAINTIFF

George H. Akers                                                  FOR DEFENDANT

(Brian MacIntosh)

Howard J. Sniderman                                           FOR DEFENDANTS

(Placid Developments, Ceeco Investments)

Allan J. Sattin                                                        FOR DEFENDANTS

(Towne Cinema Theatres)

Mark Lindskoog                                                   FOR DEFENDANTS

(Landmark Cinemas, acting as Agent for Mr. W. Patrick, solicitor for Cosmopolitan Cinemas)

Michael Jamison                                                   FOR DEFENDANTS

(Rokemay Theatres)

SOLICITORS OF RECORD:

Gowling Lafleur Henderson LLP                         FOR PLAINTIFF

Barristers & Solicitors

Toronto, ON

                                                       - 2 -

Nicholl & Akers                                                   FOR DEFENDANTS

Barristers & Solicitors                                           (Brian MacIntosh and Landmark

Edmonton, AB                                                     Cinemas)

Witten LLP                                                           FOR DEFENDANTS

Barristers & Solicitors                                           (Placid Developments, Ceeco

Edmonton, AB                                                     Investments)

Spier Harben                                                         FOR DEFENDANT

Barristers & Solicitors                                           (Towne Cinema Theatres)

Calgary, AB

Patrick & Patrick                                                  FOR DEFENDANT

Barristers & Solicitors                                           (Cosmopolitan Cinemas)

Edmonton, AB

Michael Jamison                                                   FOR DEFENDANT

Barrister & Solicitor                                              (Rokemay Theatres)

Edmonton, AB