Docket: T-111-13
Citation:
2017 FC 969
Ottawa, Ontario, October 31, 2017
PRESENT: The
Honourable Mr. Justice Fothergill
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BETWEEN:
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907687 ONTARIO
INC.
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O/A THE
INTERNATIONAL INSTITUTE OF TRAVEL
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Plaintiff
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and
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ABDUL SHOKOUR
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A.K.A. JOE
SHOKOUR, AN INDIVIDUAL AND
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1472359 ONTARIO
LIMITED
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O/A IBT COLLEGE
BUSINESS TRAVEL &
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TOURISM
TECHNOLOGY
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Defendants
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JUDGMENT AND REASONS
I.
Overview
[1]
The Plaintiff, 907687 Ontario Inc operating as the
International Institute of Travel [IIT], is a private career college
established by Rudolph Nareen in 1989 or 1990. It offers certificates and
diplomas in a variety of subjects, including business management, travel and
tourism, and hospitality.
[2]
The Defendant, 1472359 Ontario Ltd operating as
IBT College of Business Travel & Tourism Technology [IBT], is a private
career college established by the Defendant Abdul “Joe” Shokour in 2001. It
offers certificates and diplomas in a variety of subjects, including business
management, travel and tourism, and information technology.
[3]
IIT commenced this action against Mr. Shokour
and IBT on January 15, 2013. IIT alleges that Mr. Shokour and IBT improperly
used course materials developed by IIT to register IBT as a career college and
obtain approval from the Ontario Ministry of Training, Colleges and
Universities [Ministry] to offer certificates and a diploma in travel and
tourism. IIT maintains that the Defendants infringed IIT’s copyright in its
course materials, and seeks damages, an accounting of profits and other relief.
[4]
For the reasons that follow, I find that IIT has
not met its burden of proving on the balance of probabilities that Mr. Shokour
or IBT improperly made use of IIT’s copyrighted materials, or that IIT
sustained damages as a result. I also find that the action is barred by the
operation of s 43.1(1) of the Copyright Act, RSC 1985, c C-42. The
action is therefore dismissed with costs.
II.
Background
[5]
There are numerous individuals and corporations
mentioned in these reasons for judgment, and a list of dramatis personae
may therefore be useful:
(a)
Rudolph Nareen: Mr. Nareen is the owner and
operator of IIT.
(b)
IIT: IIT is a private career college offering
certificates and diplomas in, among other things, travel and tourism.
(c)
Sam and Banoo Bharucha [the Bharuchas]: the Bharuchas
purchased and operated an IIT franchise from Mr. Nareen.
(d)
1200462 Ontario Ltd: 1200462 Ontario Ltd is the
corporation through which the Bharuchas operated their IIT franchise. When they
terminated the franchise, 1200462 Ontario Ltd operated as ICM College of
Business and Technology.
(e)
ICM College of Business and Technology [ICM]:
ICM was the operating name of 1200462 Ontario Ltd once Abdul “Joe” Shokour
acquired shares in the company. ICM never commenced operations.
(f)
Abdul “Joe” Shokour: Mr. Shokour was employed by
Mr. Nareen at IIT until he left to work at other private career colleges and
then opened his own private career college, Travel Technology Academy Inc.
(g)
Travel Technology Academy Inc [TTA]: TTA was a
private career college established by Mr. Shakour and Suleyman Odemis. TTA
never commenced operations.
(h)
IBT: IBT is a private career college established
by Mr. Shokour after his involvement in TTA came to an end. IBT offers
certificates and diplomas in, among other things, travel and tourism.
[6]
IIT has operated as a private career college
since approximately 1990. In 1996, IIT sold a franchise to the Bharuchas for
$35,000.00 and 5% of gross revenues. The Bharuchas operated the franchise
through their corporation, 1200462 Ontario Ltd.
[7]
Mr. Shokour was employed by IIT from 1990 to
1998. The employment relationship soured, and he was dismissed by Mr. Nareen.
Mr. Shokour sued for wrongful dismissal, and was also involved in proceedings
before the Ontario Landlord and Tenant Board respecting his occupation of an apartment
owned by Mr. Nareen.
[8]
Following his departure from IIT, Mr. Shokour
worked for a number of different career colleges before establishing TTA with Mr.
Odemis in 2000. TTA was approved by the Ministry as a private vocational
school, and authorized to offer a 28-week Travel and Tourism Counsellor
program. Mr. Shokour and Mr. Odemis experienced difficulties in their business
relationship, and TTA never commenced operations.
[9]
On April 12, 2001, Mr. Shokour incorporated IBT.
On June 23, 2001, IBT submitted both an Initial Application for Registration to
Operate a Private Vocational School and an Application for Registration to
Operate a Private Vocational School to the Ministry. The following day, IBT
applied to register a 28-week program titled Travel and Tourism Counsellor
Diploma and Certificates.
[10]
According to Mr. Shokour, the Ministry permitted
him to expedite the approval process for IBT’s travel and tourism program
because the same program had previously been approved for TTA. This is
supported by several handwritten annotations on documents obtained from the
Ministry under provincial freedom of information legislation. Mr. Shokour was
required to complete the application only as far as Appendix “E”, and was able
to rely on the curriculum previously submitted by TTA. IBT was registered as a
private career college on August 16, 2002, and given approval to offer the
Travel and Tourism Counsellor program shortly thereafter.
[11]
Following the terrorist attacks against the
United States of America on September 11, 2001, the Bharuchas’ IIT franchise
struggled financially. They turned to Mr. Shokour for help. He expressed
interest in acquiring shares in 1200462 Ontario Ltd, but not until the
Bharuchas terminated their franchise agreement with IIT. The franchise agreement
was terminated in December 2001, and thereafter 1200462 Ontario Ltd operated as
ICM with Mr. Shokour as a shareholder. Mr. Shokour testified that he and the
Bharuchas intended to focus ICM’s course offerings on business and technology
rather than travel and tourism.
[12]
According to Mr. Shokour, the Bharuchas were
incapable of managing a successful career college, and ICM never commenced
operations. ICM nevertheless applied to renew its registration with the
Ministry for 2002. Mr. Nareen suggested that this was in order to allow ICM’s
students to complete their studies. Mr. Shokour disagreed, and said that ICM
had no students at the time he became a shareholder.
[13]
In January 2002, Mr. Shokour purchased the
remaining shares of ICM and became Director and President of the company. ICM
applied to renew its registration with the Ministry for 2003. Mr. Nareen
alleges that this was intended to facilitate Mr. Shokour’s and IBT’s improper
use of IIT’s copyrighted materials. According to Mr. Shokour, ICM applied to
renew its registrations in the hope that the business could be sold, but this
never came to fruition.
[14]
Mr. Nareen was increasingly uncomfortable about
Mr. Shokour’s involvement with the Bharuchas and ICM. On July 23, 2002, a
representative of IIT contacted the Bharuchas to enquire about Mr. Shokour’s
potential access to IIT’s copyrighted materials. Mrs. Bharucha stated in a
letter dated July 24, 2002 that the copyrighted materials were under “lock and key”, and Mr. Shokour had never been given
access to them. She said that Mr. Shokour was involved in ICM’s business and
technology courses, not the travel and tourism program.
[15]
On August 12, 2002, IIT’s legal counsel sent a
letter to Mr. Shokour with the following assertions:
In light of the closure of the North York IIT
franchise, the train out of existing students was addressed by Banoo. She
offered same to be completed at 50 St. Clair East Fourth Floor, Toronto. This
is a facility that is operated by you as IBT College. There is no doubt, given
these manoeuvres, that collaboration and collusion on the IIT training has
taken place among yourselves.
I hereby notify you that course materials
and system operation materials are copyright and cannot be used without first
obtaining the permission and authority of the owner. No such permission or
authority has been sought nor has any been granted.
If it is discovered that you have been using
any copyright or proprietary materials, which belong to ITT in conjunction with
the Travel and Tourism course offered at IBT College St. Clair & Yonge,
Toronto, or at any other location under your sponsorship, I shall without
further notice to you commence legal proceedings to stop you from continuing to
do so and to seek substantial damages, punitive damages and full indemnity
costs against you.
[16]
Mr. Shokour ended his relationship with the
Bharuchas in late 2002 or early 2003. ICM was eventually dissolved. There is no
evidence that ICM ever generated revenue of any kind.
[17]
In 2005, IBT changed the name of its Travel and
Tourism Counsellor Diploma and Certificates program to Travel and Tourism
Diploma and Certificates. Mr. Shokour testified that the word “Counsellor” was omitted from the name to avoid
confusion and ensure that the program appealed to the widest possible range of
students. He did not want to create the impression that the program qualified
individuals to work only as travel agents when the diploma could lead to
opportunities in all aspects of the travel and tourism industry. Mr. Shokour
maintains that there was no change in the curriculum, and the program always
remained the same.
[18]
According to Mr. Nareen, Mr. Bharucha approached
him in 2011 and admitted that ICM had retained IIT’s copyrighted materials, and
permitted Mr. Shokour to use them in order to register travel and tourism
courses. Counsel for the Defendants objected to this evidence as hearsay.
Neither of the Bharuchas testified in these proceedings. At the request of
IIT’s legal counsel, Mr. Bharucha provided a written statement on October 16,
2013. This was admitted into evidence on consent, but only as proof of Mr.
Nareen’s state of mind in 2011.
III.
Issues
[19]
This case raises the following issues:
A.
Did Mr. Shokour or IBT infringe IIT’s copyright
in its course materials?
B.
Is IIT’s action against Mr. Shokour and IBT
barred by s 43.1(1) of the Copyright Act?
IV.
Analysis
A.
Did Mr. Shokour or IBT infringe IIT’s copyright
in its course materials?
[20]
There is no serious dispute that IIT held
copyright in the curriculum and other materials it developed to register its
courses in travel and tourism with the Ministry. Mr. Nareen applied for and
received a certificate of copyright dated May 10, 1996 for the course outlines.
Even if he had not obtained the certificate, the materials were subject to
copyright to the extent that they contained original expressions of ideas. It
is well established that a training manual or course curriculum may benefit
from copyright protection (École de Conduite Tecnic Aubé Inc v 1509 8858
Québec inc (1986), 12 CIPR 284 (Qc Sup Ct); Market Traders Institute Inc
v Mahmood, [2008] OJ No 5065(Ont Sup Ct)).
[21]
Mr. Shokour says that there is no evidence that
he or IBT were ever given access to IIT’s copyrighted course materials by the
Bharuchas or anyone else. He notes that the letter from Mrs. Bharucha
dated July 24, 2002 included a specific denial of this allegation:
1. All Agreements, Manuals, Student and
other files relating to International Institute of Travel were under lock &
key under the control of the undersigned at all times and Joe Shokour had no
access to them at any time, nor did we ever show him any item relating to the
travel business.
2. Joe Shokour’s involvement was only
regarding the Information Technology Computer side of the business, and nothing
else. Moreover he was not interested in the Travel part of our business.
[22]
Mr. Bharucha’s written statement dated October
16, 2013 says only that ICM “maintained the same system
of operation” after Mr. Shokour joined the business. This evidence is
admissible only to illustrate Mr. Nareen’s state of mind, and provide a foundation
for IIT’s response to the Defendants’ limitations defence.
[23]
Given that ICM never commenced operations or
generated any revenue, it is unclear how ICM can be said to have infringed
IIT’s copyright to its detriment. ICM applied to renew its registrations twice
after Mr. Shokour joined the business, but Mr. Shokour testified that this was
only to facilitate a sale of the company that never materialized. ICM is, in
any event, not a Defendant in these proceedings.
[24]
Counsel for IIT argues that there must be a
connection between ICM’s renewal of its registrations and IBT’s ability to
offer a diploma in travel and tourism. He places significant emphasis on the
change in the name of IBT’s program in 2005 from Travel and Tourism Counsellor
Diploma and Certificates to Travel and Tourism Diploma and Certificates. He
suggests that a counsellor program comprises only one course of study, and
therefore differs from a diploma program.
[25]
There are numerous difficulties with IIT’s
theory of the case. The evidence establishes that IBT’s travel and tourism
program always encompassed both certificates and a diploma. From the time it
was first established in the summer of 2002, the diploma has consistently
required 28 weeks of study. The course curriculum was approved by the Ministry
when it was initially submitted by TTA. Mr. Shokour testified, and documents
obtained from the Ministry confirm, that IBT’s travel and tourism program
obtained expedited approval based on the previous approval of the same program
offered by TTA.
[26]
Mr. Shokour testified that IBT was given
approval for its travel and tourism program based on curricula and text books
developed and sold commercially by the Canadian Institute of Travel Counsellors
[CITC]. This is consistent with the handwritten annotations that appear on
documents obtained from the Ministry.
[27]
Coralie Belman, who worked as a CITC executive
for more than 25 years, testified that CITC sells both curricula and text books
that may be used to register private career colleges and courses with the Ministry.
Mr. Shokour presented copies of invoices for both curricula and text books
purchased from CITC. He was also able to produce the curriculum submitted to
the Ministry on behalf of TTA, which is clearly distinct from the one developed
by Mr. Nareen for IIT.
[28]
IIT called Carol Brun as an expert witness on
regulatory compliance with provincial legislation governing career colleges.
Ms. Brun is a consultant who has been approved by the Ministry as a compliance
monitor and adult education assessor. In this capacity, she provides
independent assessments to the Ministry regarding whether an applicant’s
proposed college or program of study meets regulatory standards.
[29]
Mr. Shokour and IBT did not dispute Ms. Brun’s
expertise, but argued that she could not be received by the Court as an
impartial witness because she once assisted Mr. Nareen in registering a program
for IIT. Counsel for Mr. Shokour and IBT did not pursue the objection with much
vigour. Nor did they take issue with the substance of Ms. Brun’s testimony.
[30]
Expert witnesses have a duty to the Court to
give fair, objective and non-partisan opinion evidence. They must be aware of
this duty, and able and willing to carry it out. If they do not meet this
threshold requirement, then their evidence should not be admitted (White
Burgess Langille Inman v Abbott and Haliburton Co, 2015 SCC 23 at paras 30,
32 [White Burgess]).
[31]
Once this threshold is met, concerns about an
expert witness’ independence or impartiality should be considered as part of
the overall weighing of the costs and benefits of admitting the evidence. The
threshold requirement is not particularly onerous, and a proposed expert’s
evidence will only rarely be excluded for failing to meet it. It is the nature
and extent of the interest or connection with the litigation which matters, not
the mere fact of the interest or connection; the existence of some interest or
a relationship does not automatically render the evidence of the proposed
expert inadmissible (White Burgess at paras 46-49).
[32]
Ms. Brun testified that she had read and
understood the Court’s Code of Conduct for Expert Witnesses, Schedule to the Federal
Courts Rules, SOR/98-106. There was nothing in her brief and professional
association with IIT to suggest that she would improperly favour its position
in this litigation. On the contrary, she explained that her role as an
independent assessor for the Ministry requires her to be impartial at all
times.
[33]
While I have no hesitation in accepting Ms. Brun
as an expert witness, her evidence does not assist IIT. Ms. Brun was asked to
examine a selection of CITC textbooks and an Appendix “E” of an application to
register a travel and tourism program. IIT was unable to produce a copy of
Appendix “E” to the Court, and it was not included in Ms. Brun’s report. Ms.
Brun expressed the view that these documents would not be sufficient for a
career college to obtain approval from the Ministry for a travel and tourism
program. Mr. Shokour and IBT do not dispute this proposition.
[34]
Ms. Brun based her opinion on documents provided
to her by counsel for IIT. IIT argued that if the documents were insufficient
to register a travel and tourism program, then Mr. Shokour must have used
IIT’s copyrighted course materials to register his program. The problem with
this argument is that Ms. Brun does not appear to have been given the course
materials that were in fact used by Mr. Shokour and IBT to register their
travel and tourism program.
[35]
I accept Mr. Shokour’s testimony that IBT’s
travel and tourism program was registered using curricula and textbooks
purchased from CITC. Mr. Nareen’s contention that they must have relied upon
copyrighted course materials that were prepared for IIT is circumstantial and
speculative. It is contradicted by the preponderance of the evidence adduced in
these proceedings.
[36]
The only admissible evidence that potentially
supports IIT’s contention that IBT must have relied on its copyrighted
materials to register IBT’s travel and tourism diploma program is an affidavit
that Mr. Shokour swore in these proceedings on July 8, 2015, in response to a
motion by IIT for further production of documents. In the affidavit, he deposed
as follows:
I do not have a copy of IBT’s originally
developed curriculum. This does not exist. The Ministry did not require a
curriculum of IBT because IBT has always used CITC approved programs.
[…] The Module Outline was prepared for a
Travel Program originally prepared by “Travel Technology Academy”. This Module
outline was prepared by me personally. […] IBT never made use of the Module
Outline. By the time I began IBT, I began to use the CITC program materials,
which was confirmed by the Minister.
[37]
Mr. Shokour was cross-examined on this confusing
and possibly inconsistent statement. He said that he didn’t think to mention
IBT’s reliance on TTA’s curriculum to register its travel and tourism program
in his affidavit. Counsel for IIT did not pursue the point, or rely on it in
closing submissions.
[38]
Instead, IIT relies heavily on the change in the
name of IBT’s program in 2005 to omit the word “Counsellor”.
However, from its inception in 2002 to the present day, IBT’s program has
always required 28 weeks of study for a diploma, and has always provided the
option of certificates for completion of specific courses, or a diploma for
completion of the full program.
[39]
I am not persuaded, in the context of these
proceedings, that a counsellor program is a single course, and a diploma
program is necessarily something different. It appears that the travel and
tourism diploma offered by IBT was approved by the Ministry when it was first
submitted by TTA in 2000. This was before Mr. Shokour entered into a business
relationship with ICM and the Bharuchas.
[40]
I therefore conclude that IIT has not met its
burden of proving on the balance of probabilities that Mr. Shokour or IBT
improperly made use of IIT’s copyrighted materials, or that IIT sustained
damages as a result.
B.
Is IIT’s action against Mr. Shokour and IBT
barred by s 43.1(1) of the Copyright Act?
[41]
Subsection 43.1(1) of the Copyright Act
provides that an action for copyright infringement must be commenced within
three years of the time when a plaintiff first knew, or could reasonably have
been expected to know, of an act or omission contrary to the Act. The
discovery of material facts involves an exercise of reasonable diligence (Central
Trust Co v Rafuse, [1986] 2 S.C.R. 147 at 224). The subsequent discovery of
additional evidence that supports a claim does not extend the limitation period
(Lindhorst v Cornwall, 2010 ONSC 3882 at para 33).
[42]
The letter sent by IIT’s legal counsel to Mr.
Shokour on August 12, 2002 establishes that IIT was aware of Mr. Shokour’s
involvement with ICM and the Bharuchas at that time. The letter also confirms
IIT’s concern about Mr. Shokour’s potential access to and unauthorized use of
IIT’s copyrighted materials.
[43]
IIT argues that the limitation period only began
to run in 2011, when Mr. Bharucha allegedly informed Mr. Nareen that ICM had
continued to use the copyrighted materials in its operations after Mr. Shokour
joined the company. IIT maintains that before Mr. Bharucha admitted the truth,
there were only suspicions. Mere suspicions are not the equivalent of actual
knowledge (citing Central-Epicure Food Products Ltd v Weinberg, 2015
ONSC 5539 at paras 20-21).
[44]
Even if IIT did not have actual knowledge of the
alleged infringement until 2011, the question remains whether the material
facts were discoverable earlier through an exercise of reasonable diligence.
Discoverability is a question of fact (Pooni v Aziz, [1999] OJ No 3864
(Sup Ct) at para 10).
[45]
What constitutes reasonable diligence depends on
the circumstances of the case. Mr. Shokour and IBT say that IIT could have
taken several reasonable steps in 2002 to determine the nature of IBT’s
certificates and diploma in travel and tourism: it could have obtained a
brochure, sent someone to register for IBT’s program, or made a request to the
Ministry under freedom of information legislation, as it did many years later.
Mr. Nareen testified that he did not request disclosure from the Ministry in
2002 because, despite being represented by counsel, he was unaware of this
option at the time.
[46]
IIT also says that it was entitled to rely on
Mrs. Bharucha’s representation in 2002 that Mr. Shokour had not been given
access to the copyrighted materials. Reliance on a party’s good faith has been
accepted in cases of fraud (Faye v Roumegous (1918), 42 DLR 533 at 543
(Ont CA), citing Betjemann v Betjemann, [1895] 2 Ch 474 (CA)), and where
there is evidence of willful concealment (Underwriters’ Survery Bureau Ltd v
Massie & Renwick Ltd, [1938] 2 DLR 31 at 51 (FCTD)). However, there is
no evidence in this case that Mr. Shokour or IBT ever engaged in fraud or
willful concealment.
[47]
Where a limitations defence is raised, a
plaintiff has the burden of proving that the cause of action arose within the
prescribed limitation period (Clemens v Brown (1958), 13 DLR (2d) 488 at
491 (Ont CA)). I am not persuaded that IIT has met this burden. The evidence
adduced in this case, particularly the strongly-worded demand letter of August
12, 2002, demonstrates that the material facts were discoverable with
reasonable diligence in 2002. This action is therefore statute-barred.
V.
Conclusion
[48]
The action is dismissed with costs. If the
parties are unable to agree upon costs, the Defendants may make written
submissions respecting costs, not exceeding five pages, within 10 days of the
date of this judgment. The Plaintiff may make written submissions in reply, not
exceeding five pages, within 10 days thereafter.
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