Date: 20050204
Docket: A-15-04
Citation: 2005 FCA 45
CORAM: ROTHSTEIN J.A.
PELLETIER J.A.
MALONE J.A.
BETWEEN:
1287592 ONTARIO LTD. c.o.b. as "Sports Centre Café", SHIP TO SHORE RESTAURANT LTD. c.o.b. as "Hennessey's Restaurant", INVESTEAM INC. c.o.b. as "The Sports Centre Café", BOY ON A DOLPHIN LTD. c.o.b. as "Tommy Cook's", KLAX CORP. c.o.b. as 'The Westend", McG. RESTAURANTS (WONDERLAND) INC. c.o.b. as "McGinnis Landing/The Oar House", 1158970 ONTARIO LIMITED c.o.b. as "Cheap Charli's III Bar & Grill", and c.o.b. as "Mr. Charlie's Bar & Grill", 1336592 ONTARIO INC. c.o.b. as "Crabby Joe's Tap and Grill", 1111808 ONTARIO LIMITED c.o.b. as "Charlie's West Tap & Grill" and c.o.b. as "Mister Charlies", PLACEMENTS SERGAKIS INC./SERGAKIS HOLDINGS INC. c.o.b. as "Bar Les Amazones" and c.o.b. as "Cabaret Les Amazones", PLACEMENTS SERGAKIS/SERGAKIS HOLDINGS INC. c.o.b. as "Pub PJ", 171761 CANADA INC., c.o.b. "Skratch Billard Bar Restaurant", 3008029 CANADA INC., c.o.b. "Skratch Billard Bar Restaurant", PLACEMENTS SERGKIS INC./SERGAKIS HOLDINGS INC. c.o.b. as "Black Jack", 3158225 CANADA INC. c.o.b. as "Bar Skratch Billard", 3296008 CANADA INC. c.o.b. as "Le Skratch Billard Bar Restaurant", BRACHES INC. c.o.b. as "Shoeless Joe's", BREWARDS LIMITED c.o.b. as "The Toad Pub", 1352936 ONTARIO INC. c.o.b. as "Shoeless Joe's", THE KING'S HEAD PUB LTD. c.o.b. as "King's Head Restaurant & Pub", 666090 ALBERTA LTD" c.o.b. as "Stavros Pizza and Sports Lounge", 749759 ALBERTA LTD. c.o.b. as "Stavros Steak House and Lounge #4", HANEY HOSPITALITY LTD. c.o.b. as "Haney Motor Hotel", FIESTA PUB LTD. c.o.b. as "Pub Med", J. WALTON HOUSE TAPS & GRILL, and 3088-2070 QUEBEC INC. c.o.b. as "Club de Billard Snooker"
Appellants
and
WORLD WRESTLING FEDERATION ENTERTAINMENT, INC., and WORLD WRESTLING FEDERATION ENTERTAINMENT CANADA INC.
Respondents
Heard at Toronto, Ontario, on January 17, 2005.
Judgment delivered at Ottawa, Ontario, February 4, 2005.
REASONS FOR JUDGMENT BY: PELLETIER J.A.
CONCURRED IN BY: ROTHSTEIN J.A.
MALONE J.A.
Date: 20050204
Docket: A-15-04
Citation: 2005 FCA 45
CORAM: ROTHSTEIN J.A.
PELLETIER J.A.
MALONE J.A.
BETWEEN:
1287592 ONTARIO LTD. c.o.b. as "Sports Centre Café", SHIP TO SHORE RESTAURANT LTD. c.o.b. as "Hennessey's Restaurant", INVESTEAM INC. c.o.b. as "The Sports Centre Café", BOY ON A DOLPHIN LTD. c.o.b. as "Tommy Cook's", KLAX CORP. c.o.b. as 'The Westend", McG. RESTAURANTS (WONDERLAND) INC. c.o.b. as "McGinnis Landing/The Oar House", 1158970 ONTARIO LIMITED c.o.b. as "Cheap Charli's III Bar & Grill", and c.o.b. as "Mr. Charlie's Bar & Grill", 1336592 ONTARIO INC. c.o.b. as "Crabby Joe's Tap and Grill", 1111808 ONTARIO LIMITED c.o.b. as "Charlie's West Tap & Grill" and c.o.b. as "Mister Charlies", PLACEMENTS SERGAKIS INC./SERGAKIS HOLDINGS INC. c.o.b. as "Bar Les Amazones" and c.o.b. as "Cabaret Les Amazones", PLACEMENTS SERGAKIS/SERGAKIS HOLDINGS INC. c.o.b. as "Pub PJ", 171761 CANADA INC., c.o.b. "Skratch Billard Bar Restaurant", 3008029 CANADA INC., c.o.b. "Skratch Billard Bar Restaurant", PLACEMENTS SERGKIS INC./SERGAKIS HOLDINGS INC. c.o.b. as "Black Jack", 3158225 CANADA INC. c.o.b. as "Bar Skratch Billard", 3296008 CANADA INC. c.o.b. as "Le Skratch Billard Bar Restaurant", BRACHES INC. c.o.b. as "Shoeless Joe's", BREWARDS LIMITED c.o.b. as "The Toad Pub", 1352936 ONTARIO INC. c.o.b. as "Shoeless Joe's", THE KING'S HEAD PUB LTD. c.o.b. as "King's Head Restaurant & Pub", 666090 ALBERTA LTD" c.o.b. as "Stavros Pizza and Sports Lounge", 749759 ALBERTA LTD. c.o.b. as "Stavros Steak House and Lounge #4", HANEY HOSPITALITY LTD. c.o.b. as "Haney Motor Hotel", FIESTA PUB LTD. c.o.b. as "Pub Med", J. WALTON HOUSE TAPS & GRILL, and 3088-2070 QUEBEC INC. c.o.b. as "Club de Billard Snooker"
Appellants
and
WORLD WRESTLING FEDERATION ENTERTAINMENT, INC., and WORLD WRESTLING FEDERATION ENTERTAINMENT CANADA INC.
Respondents
REASONS FOR JUDGMENT
PELLETIER J.A.
[1] This is an appeal from two orders of a Federal Court judge. The first order, rendered orally on January 6, 2004, dismissed the appellants' motion for dismissal or adjournment of the respondents' motion for summary judgement as a result of the failure of Ira Berg, the respondents' deponent, to comply with undertakings given at his cross-examination on his affidavit. The second order, also made orally on January 6, 2004, was reduced to writing on March 5, 2004, and was amended on March 25, 2004. That order granted the respondents' motion for summary judgment and entered judgement against a series of defendants, including the appellants.
[2] On October 21, 2003, on the strength of three certificates of non-attendance, the Chief Justice of the Federal Court, ordered Mr. Berg to attend for cross-examination on November 12, 2003, and to complete, on or before November 28, 2003, any undertakings given in the course of his cross-examination. During his cross-examination, Mr. Berg either undertook to provide the answers to certain questions, or took under advisement requests for such undertakings, in relation to 17 different matters, including financial data and licensing and distribution agreements. By letter dated November 27, 2003, (A.B., Vol. 3, p. 536) counsel for the respondents, Mr. McKenzie, purported to comply with the undertakings which were given and to address those questions which were taken under advisement.
[3] The appellants believed that the respondents had not complied with their undertakings. They brought a motion returnable December 8, 2003, seeking the dismissal of the motion for summary judgement or an adjournment of the hearing of that motion (which had previously been fixed for January 6, 2004) until Mr. Berg provided further and better answers in response to his undertakings. The presiding judge adjourned the appellants' motion to January 6, 2004, at the time the motion for summary judgment was to be heard.
[4] At the conclusion of the hearing, without reasons, the motions judge dismissed the appellants' motion and granted the motion for summary judgment though, as noted above, the written order did not issue until some time later.
[5] The appellants appealed both orders. I will first deal with the appeal from the order dismissing the appellants' motion for dismissal or adjournment of the respondents' motion for summary judgment.
[6] It is important to note that the appellants did not bring a motion to compel answers to those questions which Mr. Berg refused to answer. Furthermore, counsel was content to allow counsel for the respondents to simply take certain matters under advisement. Consequently, I am not called upon to decide if the refusals were well founded. The only issue before me is whether the answers provided were responsive to the undertakings given.
[7] Before this Court, Mr. Mackenzie argued that Mr. Berg had provided the answers to the undertakings which were given, undertakings which were very narrowly framed. It is true that Mr. Mackenzie was very precise as to what information he was prepared to undertake, on his client's behalf, to provide. The list of undertakings prepared by appellants' counsel did not always accurately reflect the exchanges recorded in the transcript. On the other hand, pursuant to the order of the Chief Justice, Mr. Mackenzie wrote to counsel for the appellants on November 27, 2003, setting out the questions to which undertakings were given or which were taken under advisement, as he saw them, together with Mr. Berg's answers.
[8] I am prepared to deal with this issue on the basis of Mr. Mackenzie's view of his client's obligations. I proceed on the basis that where Mr. Mackenzie indicated in his letter that an undertaking was given, it was in fact given. Where a question is indicated as having been taken under advisement, no undertaking has been given, but where a substantive answer is provided, then I presume that Mr. Berg has agreed to answer the question. In that case, the answer must be responsive to the question. Where Mr. Berg has refused to provide the answer to a question taken under advisement, there is nothing for me to do as the appellants have not asked that Mr. Berg be compelled to answer the questions he refused to answer.
[9] I will refer to the various questions by number, as they are identified in Mr. Mackenzie's letter.
[10] The documents provided in response to the undertakings at items 2 and 3, dealing with redacted copies of various agreements, have not been complied with. A redacted copy of an agreement is a copy of the agreement with certain passages removed. It is not a sheet of paper where certain clauses have been reproduced without context. Mr. Berg must provide the entire agreements, subject to such redaction as is appropriate.
[11] Given that the undertaking was limited to providing a redacted copy of the agreements, I am unable to order production of the agreements without redaction. However, it strikes me that the redactions have the potential to become the subject of further proceedings. While I cannot order a different method of compliance with the undertaking, I can indicate what I would accept as sufficient compliance with the undertaking, namely production of unredacted versions of the agreements subject to a confidentiality order which provided for disclosure to counsel for the appellants (and the Court) only, prohibited disclosure to the appellants, and required the return of the agreements to the respondents, uncopied, at the conclusion of the proceedings.
[12] In item 6 of Mr. Mackenzie's letter, he indicates that the question of providing the points to be remitted to the respondents by Canada Star was taken under advisement. Given that a substantive, albeit unresponsive, answer was provided, I conclude that Mr. Berg agreed to answer the question. In this context, "points" refers to percentage points, i.e., the portion of the amounts collected which is to be remitted.
[13] At page 386 of the Appeal Book, Mr. Mackenzie indicated that the respondents would provide the actual portion of the per seat fee remitted to the respondents by Canada Star for each event in issue. In order to answer the question in a responsive fashion, Mr. Berg must provide the exact proportion of the fee per seat remitted to the respondents for each of the events in issue.
[14] The information provided in response to the undertaking at item 8 is not responsive to the question as framed by Mr. Mackenzie. The question calls for information with respect to the satellite which delivers the encrypted signal to the subscribers or end users, as opposed to signal delivery to the distributors. The same is true of the response provided to the undertaking framed by Mr. Mackenzie at item 12. The question calls for identification of the delivery method of the encrypted signal, i.e., cable, satellite etc. to the end user. Mr. Berg is to provide responsive answers to these questions.
[15] The undertaking at item 14, as framed by Mr. Mackenzie, calls for identification of the respondents' records which show that payment has been made to the respondents by their licensees. Mr. Berg's answer is unresponsive. Mr. Berg is to provide a responsive answer.
[16] It follows from this that undertakings were given which were not complied with. The subject matter of those undertakings is relevant to issues of liability and damages. The appellants were hindered in their ability to respond adequately to the motion for summary judgment by Mr. Berg's failure to comply with his obligations. By way of example only, the questions with respect to the amounts remitted by Canada Star are clearly relevant to the issue of damages. In light of these findings, the appeal must be allowed and the order of the motions judge dismissing the appellants' motion for dismissal or adjournment of the respondents' motion for summary judgment must be set aside.
[17] This leaves the issue of the motion for summary judgment. It is clear that the respondents' failure to comply with the undertakings given by their deponent impaired the appellants' ability to respond to the motion for summary judgment, both on the issue of liability as well as the issue of damages. As a result, the order granting summary judgment and the judgments entered against the appellants must also be set aside.
[18] The appellants 3088-2070 Quebec Inc. and 1299245 Ontario Inc. who were noted in default, remain in default and liable to have judgment entered against them upon proof of liability and damages unless they obtain leave to file a statement of defence. The matter will be remitted to the Federal Court for a rehearing of the motion for summary judgment once the respondents have complied with their obligations with respect to the undertakings, and any re-examination arising out of those answers.
[19] In sending the matter back for rehearing, I am not to be taken as agreeing with the calculation of damages proposed by the respondents' expert and adopted by the motions judge. If the respondents are successful on the issue of liability, they are entitled to claim their damages, not their loss of revenue. The damage calculation in the respondents' expert's affidavit presumes that the lost revenue based on the retail price of the respondents' product is the measure of damages. I would think that the costs the respondents would have incurred to earn that revenue would have to be deducted to arrive at the respondents' damages. This does not address the respondents' claim for damages arising from their decreased sales due to the alleged pirating of their product, which I leave open for the judge who will rehear the motion for summary judgment.
[20] The appeal should be allowed, the order dismissing the appellants' motion for dismissal or adjournment of the respondents' motion for summary judgment should be set aside, the order granting the respondents' summary judgment should be set aside and the matter should be remitted to the Federal Court for redetermination after compliance by the respondents with these reasons.
[21] The appellants ask for costs of $50,000 here and in the Federal Court. The respondents ask for costs here of $15,000. The costs awarded to the respondents by the motions judge approximated $35,000. In the circumstances, I would award the appellants their costs both here and below in the amount of $50,000.
"J.D. Denis Pelletier"
J.A.
"I agree
Marshall Rothstein J.A."
"I agree
B. Malone"
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-15-04
STYLE OF CAUSE:
1287592 ONTARIO LTD. c.o.b. as "Sports Centre Café", SHIP TO SHORE RESTAURANT LTD. c.o.b. as "Hennessey's Restaurant", INVESTEAM INC. c.o.b. as "The Sports Centre Café", BOY ON A DOLPHIN LTD. c.o.b. as "Tommy Cook's", KLAX CORP. c.o.b. as 'The Westend", McG. RESTAURANTS (WONDERLAND) INC. c.o.b. as "McGinnis Landing/The Oar House", 1158970 ONTARIO LIMITED c.o.b. as "Cheap Charli's III Bar & Grill", and c.o.b. as "Mr. Charlie's Bar & Grill", 1336592 ONTARIO INC. c.o.b. as "Crabby Joe's Tap and Grill", 1111808 ONTARIO LIMITED c.o.b. as "Charlie's West Tap & Grill" and c.o.b. as "Mister Charlies", PLACEMENTS SERGAKIS INC./SERGAKIS HOLDINGS INC. c.o.b. as "Bar Les Amazones" and c.o.b. as "Cabaret Les Amazones", PLACEMENTS SERGAKIS/SERGAKIS HOLDINGS INC. c.o.b. as "Pub PJ", 171761 CANADA INC., c.o.b. "Skratch Billard Bar Restaurant", 3008029 CANADA INC., c.o.b. "Skratch Billard Bar Restaurant", PLACEMENTS SERGKIS INC./SERGAKIS HOLDINGS INC. c.o.b. as "Black Jack", 3158225 CANADA INC. c.o.b. as "Bar Skratch Billard", 3296008 CANADA INC. c.o.b. as "Le Skratch Billard Bar Restaurant", BRACHES INC. c.o.b. as "Shoeless Joe's", BREWARDS LIMITED c.o.b. as "The Toad Pub", 1352936 ONTARIO INC. c.o.b. as "Shoeless Joe's", THE KING'S HEAD PUB LTD. c.o.b. as "King's Head Restaurant & Pub", 666090 ALBERTA LTD" c.o.b. as "Stavros Pizza and Sports Lounge", 749759 ALBERTA LTD. c.o.b. as "Stavros Steak House and Lounge #4", HANEY HOSPITALITY LTD. c.o.b. as "Haney Motor Hotel", FIESTA PUB LTD. c.o.b. as "Pub Med", J. WALTON HOUSE TAPS & GRILL, and 3088-2070 QUEBEC INC. c.o.b. as "Club de Billard Snooker",
Appellants
and
WORLD WRESTLING FEDERATION ENTERTAINMENT, INC., and WORLD WRESTLING FEDERATION ENTERTAINMENT CANADA INC.
Respondents
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: JANUARY 17, 2005
REASONS FOR
JUDGMENT BY: PELLETIER J.A.
CONCURRED IN BY: ROTHSTEIN J.A.
MALONE J.A.
DATED: FEBRUARY 4, 2005
APPEARANCES BY:
Mr. Ian W.M. Angus
For the Appellants
Mr. K. William McKenzie
For the Respondents
SOLICITORS OF RECORD:
Ian W.M. Angus
Barrister & Solicitor
Port Hope, Ontario
For the Appellants
Crawford, McKenzie, McLean, Wilford, Anderson & Duncan LLP
Barristers & Solicitors
Orillia, Ontario
For the Respondents
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