Docket:
A-126-13
Citation:
2013 FCA 288
CORAM: EVANS J.A.
STRATAS
J.A.
WEBB
J.A.
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BETWEEN:
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WALDEMAR BABIS, CARRYING ON BUSINESS AS DOMENIC PUB
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Appellant
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and
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PREMIUM SPORTS BROADCASTING INC.
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Respondent
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REASONS FOR JUDGMENT OF THE COURT
(Delivered from the
Bench at Toronto, Ontario, on December 5, 2013).
EVANS J.A.
[1]
This is an appeal by Waldemar Babis carrying on
business as Domenic Pub from a decision of the Federal Court in which Justice
Gagné (Judge) dismissed his motion under rule 399(1) of the Federal Courts
Rules, SOR/98-106 (Rules). The decision is reported at 2013 FC 235.
[2]
Mr Babis’ motion was to set aside a default
judgment, dated August 26, 2011 (Court File No. T-1938-10). The judgment was
issued by Justice Mandamin in favour of Premium Sports Broadcasting Inc.
(Premium), the respondent in the present appeal, on the failure of Mr Babis to
file a Statement of Defence or to respond to its action for copyright
infringement.
[3]
Justice Mandamin found that Mr Babis had
knowingly infringed Premium’s copyright in Ultimate Fighting Championship (UFC)
pay-per-view matches and events by broadcasting them at the Domenic Pub without
Premium’s authorization.
[4]
The default judgment permanently enjoined Mr
Babis, the Domenic Pub and their employees from further infringements of
Premium’s copyright in UFC events, and ordered him to pay $20,000 in damages
and costs of $1,500. Since then, Premium has taken steps to collect the
judgment debt.
[5]
The Judge whose decision is the subject of the
present appeal stated that, in order to succeed on his motion to set aside the
default judgment, Mr Babis had to satisfy each part of a three-part test by
showing that:
(i)
he has a reasonable explanation of his failure to file a Statement of Defence;
(ii)
he has a prima facie defence on the merits of Premium’s claim; and
(iii)
he has moved promptly or within a reasonable time to set aside the default
judgment.
[6]
This is the correct legal test. Therefore, this
Court can only intervene if the Judge exercised her discretion under rule 399
of the Rules on the basis of an error of principle or a serious misapprehension
of the facts, or in an otherwise unreasonable manner.
[7]
On the first part of the test the Judge found
that Mr Babis had been served with a copy of Premium’s Amended Statement of
Claim on December 5, 2010. The material was left with an employee at Mr Babis’
place of business who apparently had control or management of it. Mr Babis was
thus duly served in accordance with rules 128(1)(c) and 131.1(b).
[8]
Mr Babis alleged that he only learned of the
Amended Statement of Claim nearly two years later, in September 2012. He argued
that he had not been properly served earlier because documents were left with
part-time staff, who had failed to bring them to his attention.
[9]
After carefully reviewing the evidence regarding
the service of the Amended Statement of Claim, as well as Mr Babis’ failures to
respond to documents served on him after December 5, 2010 in related
proceedings, the Judge held that he had been served in accordance with the
Rules, and was responsible for instructing his employees to hand over to him
any legal documents addressed to him that they received. Accordingly, Mr Babis
had not provided a reasonable explanation of his failure to file a Statement of
Defence.
[10]
Recognizing that this was sufficient to dismiss
Mr Babis’ motion, the Judge nonetheless briefly considered the other two parts
of the test.
[11]
She held that he had not adduced evidence of a prima
facie defence to Premium’s claim for copyright infringement. Affidavits
sworn by employees and friends were silent on whether a UFC event was shown in
the Domenic Pub on one of the nights in question, or whether, to their
knowledge, UFC events were ever shown there.
[12]
Finally, the Judge held that Mr Babis had not
moved promptly after September 2012 when he said that he first learned of
Premium’s Amended Statement of Claim. He did not retain counsel until November
1, 2012, and the motion to set aside the default judgment was not filed until
January.
[13]
In our view the Judge’s reasons are clear and
comprehensive, and reveal no error warranting our intervention in the exercise
of her discretion. In particular, there was ample evidence that enabled the
Judge to find that the Amended Statement of Claim had been served in accordance
with the Rules.
[14]
The appeal will therefore be dismissed with
costs fixed in the lump sum amount of $3,000, inclusive of disbursements and
any applicable taxes.
"John M. Evans"
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