Date: 20101221
Docket: T-746-09
Citation: 2010
FC 1315
Ottawa, Ontario, December 21, 2010
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
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CONCEPT DEVELOPMENTS LTD.
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Plaintiff
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and
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CHARLES WEBB and
LORNA WEBB
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Defendants
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and
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HIGH GRADE HOMES INC.
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Third Party
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REASONS FOR ORDER AND ORDER
I. INTRODUCTION
[1]
The
Plaintiff has brought a motion for summary judgment against the Defendants, Mr.
and Mrs. Webb (Webbs), pursuant to Rule 213. The other Defendant, High Grade
Homes Inc. (High Grade), has been released from the litigation for a payment of
$25,000.
II. BACKGROUND
[2]
The
Plaintiff is the creator of home building designs and the builders of the homes
it designs. It has registered copyright in the plans for a bi-level home called
the “Stratford Plan” and a building design for the same home called the “Stratford Building”.
[3]
The basic
premise of the Plaintiff’s claim is that the Defendants Webb authorized High
Grade to build a home which is substantially similar to the Stratford Building (with some minor
modifications) and that High Grade built such a home. The Plaintiff claims $124,000
for direct loss, which is essentially loss from not building the home – it
being a requirement to use the Stratford Plan that Concept build the home – as
well as an amount of $40,000 for intangible loss. The Plaintiff also seeks
exemplary/punitive damages.
[4]
While not all
the facts have been established, what can be accepted for purposes of this
motion is that the Webbs saw a model Stratford
home, disliked Concept’s quoted price to build the home and subsequently took
their business to High Grade, another home building company. The Webbs showed
High Grade the Stratford Plan and informed High Grade that they wanted
something similar to what was in the plan, albeit with some modifications. The
Webbs drew up what they wanted and gave that drawing to High Grade. Whether
High Grade gave any assurance to the Webbs that their design would not infringe
the Plaintiff’s copyright is less clear.
[5]
There is
little doubt that at this time, there is significant dispute as to who did what
in relation to ensuring non-infringement. Therefore, there is also significant
dispute as to who may be liable and for what. The history of the plans, the ebb
and flow of ideas between the parties, and the ultimate amalgam of ideas are
important facts to be determined prior to any conclusions being reached as to who
actually committed any act of infringement.
[6]
There is a
threshold issue of whether the Webbs’ plans and the house which was actually built
infringed copyright. A key aspect of that issue is whether any differences
between the Webbs’ plan and the Stratford Plan are significant.
[7]
The other
critical issue is whether the Webbs authorized infringement. The Plaintiff
claims that knowledge of the infringement is immaterial so long as there is
infringement. Even if the Plaintiff was correct that fore knowledge is
irrelevant, the degree and nature of such knowledge is an important factor in assessing
the remedies available.
[8]
The
Plaintiff acknowledged in argument that its proposition, that a builder whose
copyright is infringed becomes entitled to loss of profits, is a novel one. The
Plaintiff extends the line of authority called the “architects cases” to
include designer/builders.
III. ANALYSIS
[9]
The legal
issue on this motion is whether the Defendants’ case is so flawed that it does
not deserve consideration by a court. The onus on the Plaintiff to establish
such a condition is high.
[10]
In Society
of Composers, Authors and Music Publishers of Canada v. Maple Leaf Sports & Entertainment, 2010 FC 731, the Court
summarized the applicable principles on this type of motion at paragraphs
14-16:
14 The
summary judgment, and now summary trial, procedures are important tools for a
court to control its case load. Particularly with respect to summary judgments,
the Supreme Court of Canada has confirmed its importance in the administration
of justice.
... The summary judgment rule serves an
important purpose in the civil litigation system. It prevents claims or
defences that have no chance of success from proceeding to trial. Trying
unmeritorious claims imposes a heavy price in terms of time and cost on the
parties to the litigation and on the justice system. It is essential to the
proper operation of the justice system and beneficial to the parties that
claims that have no chance of success be weeded out at an early stage.
Conversely, it is essential to justice that claims disclosing real issues that
may be successful proceed to trial.
Canada (Attorney General) v.
Lameman, 2008 SCC 14, para. 10
15 However,
these summary procedures have their limits. Trials are the ways by which true
disputes are resolved. People have a right to their day in court to deal with
legitimate claims. Courts must be mindful that the effect of a summary judgment
motion can deprive a party of that right.
16 In
Granville Shipping Co. v. Pegasus Lines Ltd. (T.D.), [1996] 2 F.C. 853,
this Court outlined the general principles applicable to summary judgments.
8 have considered all of the case law
pertaining to summary judgment and I summarize the general principles
accordingly:
1. the purpose of the provisions is to
allow the Court to summarily dispense with cases which ought not proceed to
trial because there is no genuine issue to be tried (Old Fish Market
Restaurants Ltd. v. 1000357 Ontario Inc. et al, [1994] F.C.J. No. 1631);
2. there is no determinative
test (Feoso Oil Ltd. v. Sarla (The), [1995] F.C.J. No. 866) but Stone
J.A. seems to have adopted the reasons of Henry J. in Pizza Pizza Ltd. v.
Gillespie, [1990] O.J. No. 2011. It is not whether a party cannot possibly
succeed at trial, it is whether the case is so doubtful that it does not
deserve consideration by the trier of fact at a future trial;
3. each case should be interpreted in
reference to its own contextual framework (Blyth, [1994] F.C.J. No. 560,
and Feoso);
4. provincial practice rules (especially
Rule 20 of the Ontario Rules of Civil Procedure, [R.R.O. 1990, Reg. 194]) can
aid in interpretation (Feoso and Collie, [1996] F.C.J. No. 193);
5. this Court may determine questions of
fact and law on the motion for summary judgment if this can be done on the
material before the Court (this is broader than Rule 20 of the Ontario Rules of
Civil Procedure) (Patrick, [1994] F.C.J. NO. 1216);
6. on the whole of the
evidence, summary judgment cannot be granted if the necessary facts cannot be
found or if it would be unjust to do so (Pallman, [1995] F.C.J. NO. 898,
and Sears, [1996] F.C.J. No. 51);
7. in the case of a serious
issue with respect to credibility, the case should go to trial because the
parties should be cross-examined before the trial judge (Forde, [1995]
F.C.J. No. 48, and Sears). The mere existence of apparent conflict in the
evidence does not preclude summary judgment; the court should take a "hard
look" at the merits and decide if there are issues of credibility to be
resolved (Stokes, [1995] F.C.J. No. 1547).
[Emphasis
added]
[11]
The
Plaintiff’s motion must fail for a number of reasons:
(a) the
necessary facts cannot be found at this stage. The question of actual
infringement and that of how substantial the Webbs’ changes to the Stratford
Plan were cannot be determined on the evidence. The issue of substantial change
or whether the Webbs’ plan was substantially similar to the Stratford Plan is
one of fact and degree best left to a trial judge in this case.
(b) there
are serious issues of credibility including the Webbs’ explanation, the role of
High Grade, whether any assurances of non-infringement were made and exactly
who actually infringed.
(c) the
question of “authorization” is both legally and factually complex. It is best
described in CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1
S.C.R. 339 at paragraph 38:
38 "Authorize"
means to "sanction, approve and countenance": Muzak
Corp. v. Composers, Authors and Publishers Association of Canada, Ltd.,
[1953] 2 S.C.R. 182, at p. 193; De Tervagne v. Beloeil (Town), [1993] 3 F.C. 227 (T.D.).
Countenance in the context of authorizing copyright infringement must be
understood in its strongest dictionary meaning, namely, "[g]ive approval
to; sanction, permit; favour, encourage": see The New
Shorter Oxford English Dictionary (1993), vol. 1, at p. 526.
Authorization is a question of fact that depends on the circumstances of each
particular case and can be inferred from acts that are less than direct and
positive, including a sufficient degree of indifference: …
These are determinations best
left to a trial judge to weigh in the context of all of the evidence.
(d) the
measure of damages is not established. The invocation of a novel proposition
for damages is but one factor which indicates that this issue is deserving of a
trial. Any exemplary damages require a complete factual matrix; a separate
trial of the damages issue would not be an efficient use of court resources as
it would entail much of the liability evidence.
[12]
Therefore,
this motion will be denied with costs to the Defendants Webb at the usual
scale.
ORDER
THIS COURT ORDERS that the motion is denied with
costs to the Defendants Webb at the usual scale.
“Michael
L. Phelan”
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