Date: 20070606
Docket: T-700-07
Citation: 2007 FC 604
[ENGLISH TRANSLATION]
Montréal, Quebec, June 7, 2007
PRESENT: Richard Morneau, Esq., Prothonotary
BETWEEN:
SOCIETY
FOR REPRODUCTION OF RIGHTS OF AUTHORS, COMPOSERS AND PUBLISHERS IN CANADA INC.
and
SODRAC 2003 INC.
Applicants
and
HÔTEL DES ENCANS DE MONTRÉAL INC.
Respondent
and
SOCIÉTÉ DES
AUTEURS DANS LES ARTS GRAPHIQUES
ET PLASTIQUES (ADAGP)
and
ARTISTS RIGHTS SOCIETY (ARS)
and
BILD-KUNST
and
RAO
and
SOCIÉTÉ BELGE
DES AUTEURS-COMPOSITEURS ET
ÉDITEURS (SABAM)
and
VEGAP
Respondents
REASONS FOR ORDER AND ORDER
[1]
This a motion by the respondent under subsection 34(6) of
the Copyright Act, R.S.C. (1985), c. C-42 (the Act) to have the
application for judicial review (the application) brought by the applicants
(hereinafter the SODRAC, collectively) under paragraph 34(4)(a) of the Act
heard as if it were an action.
Background
[2]
The respondent, the Hôtel des encans de Montréal Inc., is
an auction house in Montréal, founded in 1983, that specializes in the public
auction of art and antiques.
[3]
As part of the respondent’s activities, certain works
entrusted to it by third parties to be auctioned appear in its catalogues and
on its website, www.iegor.net.
[4]
According to SODRAC, under the Act, the respondent cannot
reproduce or communicate artistic works included in the repertoire managed by
SODRAC to the public by telecommunication without obtaining prior authorization
from the owners of the copyright of these works or their representative.
[5]
By its application, SODRAC considers that the Act is
contravened and is thus seeking that the respondent be convicted and pay $81,584.16
(plus taxes) as royalties and penalties allegedly payable for the reproduction
and broadcast of the artistic works mentioned above.
[6]
SODRAC’s application was brought by the combined operation
of Rules 300 et seq. of the Federal Courts Rules (the Rules) and
paragraph 34(4)(a) of the Act, which stipulates that a civil remedy for
copyright infringement may be brought either by action or by application (requête
in the French version of the Act).
[7]
Section 34 of the Act states the following:
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34. (1) Where
copyright has been infringed, the owner of the copyright is, subject to this
Act, entitled to all remedies by way of injunction, damages, accounts,
delivery up and otherwise that are or may be conferred by law for the
infringement of a right.
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34. (1) En
cas de violation d’un droit d’auteur, le titulaire du droit est admis, sous
réserve des autres dispositions de la présente loi, à exercer tous les
recours -- en vue notamment d’une injonction, de dommages-intérêts, d’une
reddition de compte ou d’une remise – que la loi accorde ou peut accorder
pour la violation d’un droit.
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(2) In
any proceedings for an infringement of a moral right of an author, the court
may grant to the author or to the person who holds the moral rights by virtue
of subsection 14.2(2) or (3), as the case may be, all remedies by way of
injunction, damages, accounts, delivery up and otherwise that are or may be
conferred by law for the infringement of a right.
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(2) Le
tribunal, saisi d’un recours en violation des droits moraux, peut accorder à
l’auteur ou au titulaire des droits moraux visé au paragraphe 14.2(2) ou (3),
selon le cas, les réparations qu’il pourrait accorder, par voie d’injonction,
de dommages-intérêts, de reddition de compte, de remise ou autrement, et que
la loi prévoit ou peut prévoir pour la violation d’un droit.
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(3) The
costs of all parties in any proceedings in respect of the infringement of a
right conferred by this Act shall be in the discretion of the court.
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(3) Les
frais de toutes les parties à des procédures relatives à la violation d’un
droit prévu par la présente loi sont à la discrétion du tribunal.
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(4) The
following proceedings may be commenced or proceeded with by way of
application or action and shall, in the case of an application, be heard
and determined without delay and in a summary way:
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(4) Les
procédures suivantes peuvent être engagées ou continuées par une requête
ou une action :
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(a) proceedings
for infringement of copyright or moral rights;
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a) les
procédures pour violation du droit d’auteur ou des droits moraux;
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(b) proceedings
taken under section 44.1, 44.2 or 44.4; and
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b) les
procédures visées aux articles 44.1, 44.2 ou 44.4;
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(c) proceedings
taken in respect of
(i) a
tariff certified by the Board under Part VII or VIII, or
(ii) agreements
referred to in section 70.12.
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c) les
procédures relatives aux tarifs homologués par la Commission en vertu des
parties VII et VIII ou aux ententes visées à l’article 70.12.
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Le tribunal
statue sur les requêtes sans délai et suivant une procédure sommaire.
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(5) The
rules of practice and procedure, in civil matters, of the court in which
proceedings are commenced by way of application apply to those proceedings,
but where those rules do not provide for the proceedings to be heard and
determined without delay and in a summary way, the court may give such
directions as it considers necessary in order to so provide.
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(5) Les
requêtes visées au para-graphe (4) sont, en matière civile, régies par
les règles de procédure et de pratique du tribunal saisi des requêtes si ces
règles ne prévoient pas que les requêtes doivent être jugées sans délai et
suivant une procédure sommaire. Le tribunal peut, dans chaque cas, donner
les instructions qu’il estime indiquées à cet effet.
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(6) The
court in which proceedings are instituted by way of application may, where
it considers it appropriate, direct that the proceeding be proceeded with
as an action.
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(6) Le
tribunal devant lequel les procédures sont engagées par requête peut, s’il
l’estime indiqué, ordonner que la requête soit instruite comme s’il
s’agissait d’une action.
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(7) In
this section, “application” means a proceeding that is commenced other than
by way of a writ or statement of claim.
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(7) Au
présent article, « requête » s’entend d’une procédure engagée
autrement que par un bref ou une déclaration.
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(We underline) (nos
soulignements)
[8]
In support of the motion under review, the respondent
submitted an affidavit from its vice-president and auctioneer, Iégor de St-Hippolyte
(the respondent’s affidavit).
[9]
In this affidavit, the respondent lists the following
substantive defences that it intends to assert, among other defences, on the
merit of SODRAC’s application:
-
That there has been no substantial reproduction of works;
-
That there was authorization from the assigns, i.e. third
parties who entrust the works to be sold;
-
That SODRAC does not have the rights that it claims;
-
That the respondent’s actions are justified by the fair
dealing exceptions provided for in the Act;
-
That without admission with respect to the rights claimed
by SODRAC, the respondent also intends to challenge the amount of royalties and
penalties sought by SODRAC; and
-
That the application proposed by SODRAC of the Act is
likely to undermine the freedom of commercial expression of the respondent, its
clients and its principals, a fundamental freedom recognized by the Canadian
Charter of Rights and Freedo ms and the Charter of Human Rights and
Freedoms R.S.Q. c. C‑12.
[10]
In its affidavit, the respondent also emphasized the
importance of this case, since this would be the first time that the right of
reproduction and communication of works of art to the public would be invoked
against an auctioneer responsible for selling such works. Thus, these
proceedings would be a first in Canada and would be a precedent. The issues
raised by SODRAC’s application would therefore be significant and likely to
affect Canada’s entire art industry.
[11]
With respect to the evidence that the respondent intends to
adduce on merit, paragraph 8 of its affidavit states that it will include,
notably, expert evidence (regarding the value, nature of use, etc.), as well as
testimony from its representatives and representatives from similar companies.
[12]
In written submissions—not in its affidavit—the respondent
adds on this point that affidavit evidence will not make it possible to obtain
testimony from these third parties, testimony that is required for its defence.
In particular, the respondent intends to summon representatives of various
Canadian auction houses and owners of art galleries to testify on the effect of
SODRAC’s remedy on their companies. However, such testimony, according to the
respondent’s written submissions, cannot be obtained by affidavit because the
respondent does not control these witnesses.
[13]
Finally, at paragraphs 10 and 11 of its affidavit, the
respondent sets out the following general allegations:
[translation]
[10] Affidavit evidence as provided for in Rules 306
and 307 will not provide a full statement of the facts and issues and may
prejudice [the respondent]. It is far more appropriate for this case to proceed
by action, thereby allowing the hearing of witnesses and experts before the
Court.
[11] It would be highly prejudicial to [the respondent]
for this case to proceed under the procedure set out in Rule 300 et seq.
Specifically, it would then be impossible for the respondent to establish a
case and put forward whatever defence it has against SODRAC's action, as stated
above.
Analysis
[14]
As the respondent points out, few decisions by this Court
or the Federal Court of Appeal address the possibility contemplated by
subsection 34(6) of the Act.
[15]
In Kraft Canada Inc. v. Euro Excellence
Inc., 2003 FCT 46 (Kraft), the Court found that the burden of proof
under subsection 34(6) of the Act fell, as in this case, to the respondent and
that the case law developed under subsection 18.4(2) of the Federal Courts
Act, R.S.C. 1985, c. F-7, was relevant. At paragraphs 10 to 13 of that
case, the Court stated the following in its analysis that led it to dismiss the
application for conversion of the then respondent:
[10] Section 34(4)(a) of the Act clearly provides for
the right to initiate a proceeding under the Act by application. It was up to
the defendant to persuade the Court to exercise its discretion under s. 34(6)
of the Act to have the application tried as an action. In this regard I feel,
like the plaintiffs, that use of the case law developed under a section with
similar wording, namely s. 18.4(2) of the Federal Court Act, R.S.C.
1985, c. F-7, is relevant.
[11] The leading case in this regard appears to be Macinnis
v. Canada (Attorney General) (C.A.), 1994 CanLII 3467 (FCA), [1994]
2 F.C. 464.
[12] I do not consider that the defendant has
submitted by affidavit such evidence as would permit the Court to conclude that
the requirements indicated in Macinnis have been met.
[13] I do not consider that, apart from theoretical
arguments, the defendant has presented evidence that the essential procedural
requirements in the case at bar would be prejudicially beyond its scope if the
plaintiffs' instant application goes forward. Further, I do not see how the
fact of the plaintiffs' proceeding going forward under the Act as an
application, not an action, limits the legitimate arguments or grounds for
defence which the defendant might have..
[16]
Although in a decision made on November 17, 2005, in Canadian
Private Copying Collective v. Fuzion Technology Corp., 2005 FC 1557
(Fuzion), this Court stated that subsection 18.4(2) of the Federal
Courts Act did not apply to proceedings initiated under subsection 34(4) of
the Act, Fuzion does not expressly exclude the Federal Court of Appeal’s
analysis framework found in Macinnis, above.
[17]
Therefore, it would not be entirely inappropriate to keep
in mind the teachings of Macinnis and Kraft.
[18]
In this situation, I do not consider that the respondent’s
affidavit establishes a dynamic that should lead me to consider that it is
appropriate, under subsection 34(6) of the Act, that SODRAC’s application now
be considered as if it were an action.
[19]
The respondent’s allegations that this case is a complex
one of first instance and may create a precedent are not likely to satisfy me.
The same is true that the Canadian and Quebec charters can be debated, and that
expert testimony will be presented. Similar arguments were considered then
dismissed in Macinnis.
[20]
The fact that the testimony of third parties not under the
control of the respondent can be sought shall not lead us here to change our
finding. There may be reason to believe that the third parties sought by the
respondent would have a version that would support the respondent’s intended
defence arguments. Furthermore, in this application, the evidence has not
established that any third parties were approached or refused to provide an
affidavit. The respondent’s affidavit does not comment on this matter.
[21]
I believe, in the circumstances, that the general scheme of
the administration of evidence provided under rules governing the perfecting,
and the hearing on the merits, of an application for judicial review before
this Court is more than sufficient to allow the respondent here to properly
assert, without actual prejudice, its substantive grounds against SODRAC
without there being any need to deploy the whole apparatus involved in an
action.
[22]
In this regard, I cannot agree with the approach suggested
by the respondent and consider that, despite the neutral and apparently
egalitarian wording of subsection 34(4) of the Act, it must be held that an action
scheme is the general scheme to be followed when the Act is contravened and
that an application for judicial review (i.e. affidavit evidence) is the
exception. In that spirit, and in the respondent’s view, when a party uses an
application for judicial review, an opposing party that submits a motion to
convert under subsection 34(6) of the Act should benefit from a certain
relaxation of the tests developed in Macinnis. In that case, one of the
key tests is the following:
[…] The key test is whether the judge can see that
affidavit evidence will be inadequate, not that trial evidence might be
superior. (See page 472)
[23]
For these reasons, I dismiss with costs the respondent’s
application under subsection 34(6) of the Act.
ORDER
The respondent’s
application under subsection 34(6) of the Copyright Act is dismissed
with costs.
“Richard Morneau”
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