Date: 20021220
Docket: T-78-01
Neutral citation: 2002 FCT 1320
Ottawa, Ontario, December 20, 2002
Before: François Lemieux J.
BETWEEN:
COLUMBIA PICTURES INDUSTRIES INC, DISNEY ENTERPRISES INC, METRO-GOLDWYN-MAYER STUDIOS INC, PARAMOUNT PICTURES CORPORATION, TRISTAR PICTURES INC, TWENTIETH CENTURY FOX FILM CORPORATION, UNITED ARTISTS CORPORATION, UNITED ARTISTS PICTURES INC, UNIVERSAL CITY STUDIOS INC, WARNER BROS, A DIVISION OF TIME WARNER ENTERTAINMENT CO. L.P.
Plaintiffs
AND
ÉRIC VEILLETTE, doing business as
ÉRIC VEILLETTE ÉLECTRONIQUE
Defendant
REASONS FOR ORDER AND ORDER
LEMIEUX J.
A. INTRODUCTION
[1] Pursuant to a notice of review under Rule 380(1) of the Federal Court Rules (1998) ("the Rules") on October 3, 2002 Blais J., after review, directed that the matter proceed and that the plaintiffs could serve and file a motion for summary judgment by November 8, 2002 at the latest. The plaintiffs filed such a motion for summary judgment in early November 2002, returnable in Montréal on December 9, 2002.
[2] The defendant Éric Veillette responded by notice of motion, also returnable on December 9, 2002, seeking five things, namely (a) obtaining an adjournment of the motion for summary judgment; (b) obtaining leave to amend the defence; (c) obtaining leave to examine the deponent (and/or any other person aware of the facts) on the motion for summary judgment; (d) ordering that the plaintiffs each provide security for costs; (e) allowing the motion record to be filed without affidavit and its exhibits.
[3] At the hearing of the two motions counsel for the plaintiffs admitted that the defendant was entitled to cross-examine the deponent on the affidavit in support of his motion for a summary judgment, but argued that before cross-examination the defendant, under Rule 214(2) of the Rules, should file his motion record in reply, a point on which counsel for Mr. Veillette agreed. In the circumstances, the motion for summary judgement was adjourned to a date to be set by the judge or prothonotary responsible for the specially managed proceeding, appointed under s. 384 of the Rules, and the parties agreed to this procedure before me.
B. ANALYSIS
[4] The result is that I have two points in Mr. Veillette's motion to decide: (a) his request to be authorized to amend his defence, and (b) his request that the defendants be directed to provide security for costs.
(a) Amendments to defence
[5] Mr. Veillette wished to amend his defence to add the following paragraphs:
[TRANSLATION]
19.1 Although not alleged in their action, the plaintiffs suggested in a request for admissions that the defendant had pleaded guilty to a criminal charge;
19.2 In their reply to the request for admissions counsel for the defendant admitted that he had pleaded guilty, but explained the circumstances in which the guilty plea was made, namely to avoid costs associated with a trial which the defendant did not have the means to pay;
19.3 Further, the defendant specified in writing that any user had to obtain the required authorization, as appears in particular from the labels placed on each decoder, a copy of which was provided as Exhibit D-1 of the defence;
19.4 The explanations given constituted contrary evidence refuting the presumption made by s. 18(3) of the Radio Communications Act, if the latter Act applied to this situation;
19.5 In fact, these were not criminal charges but federal statutory offences;
19.6 It is clear that by using "criminal" the plaintiffs were only seeking to discredit the defendant in the eyes of the Court;
19.7 Alternatively, the facts as a result of which charges were laid occurred at a period when there was legal uncertainty as to the scope of s. 10(1)(b) of the Radio Communications Act, and even today that uncertainty remains, at least as regards decoders;
19.8 The plaintiffs wrongly included in this discussion the question of satellite interception, which is fundamentally different from the question of decoders, both in terms of fact and of legislation . . .
[6] In the pleadings, we are at the stage of the examination after defence.
[7] I grant the defendant leave to amend his defence as he suggested, in accordance with the rules stated by the Federal Court of Appel in Her Majesty the Queen v. Canderel Limitée, [1994] 1 F.C. 3, and in Visx v. Nidek, [1998] F.C.J. No. 1766.
[8] In Canderel, supra, at p. 10, Décary J.A. wrote:
[9] . . . while it is impossible to enumerate all the factors that a judge must take into consideration in determining whether it is just, in a given case, to authorize an amendment, the general rule is that an amendment should be allowed at any stage of an action for the purpose of determining the real questions in controversy between the parties, provided, notably, that the allowance would not result in an injustice to the other party not capable of being compensated by an award of costs and that it would serve the interests of justice.
[9] In Visx, supra, Sexton J. wrote:
The rule of conduct of the Court in such a case is that, however negligent or careless may have been the first omission, and however late the proposed amendment, the amendment should be allowed, if it can be made without injustice to the other side. There is no injustice if the other side can be compensated by costs; but, if the amendment will put them into such a position that they must be injured, it ought not to be made.
[10] I am not persuaded in the exercise of my discretionary authority that the proposed amendment to the defence is one which is frivolous or vexatious or that the plaintiffs would suffer damage that cannot be compensated for by costs. No other factor was submitted to me.
[11] If I granted leave to amend the defence, the plaintiffs asked to be awarded on a solicitor-client basis all the costs they would be obliged to incur as a direct consequence of the amendment granted: a new reply should be filed, a new request for admissions should be made and the motion for a summary judgment would have to be re-filed because it would have to be started over again.
[12] I am in favour of the plaintiffs' request on this point, but not on a solicitor-client basis.
(b) Request for security
[13] The defendant justified the security requested on the ground that all the plaintiffs generally reside outside Canada, and he relied on Rule 416(1)(a). Counsel for the plaintiffs admitted that they did usually reside outside Canada.
[14] However, the plaintiffs are engaged in various activities in Canada, hold copyright registration certificates in Canada and have agreements with certain licensees of the Canadian Radio-Television and Telecommunications Commission ("the CRTC"). In the circumstances, the defendant has not satisfied the Court in accordance with Rule 416(1)(b) that there is any reason to believe that the plaintiffs would not have sufficient assets in Canada available to pay the defendant's costs if it were successful (see Structural Instrumentation Inc. v. Balance Électronique de Camions R.T. Inc. (1993), 68 F.T.R. 133).
ORDER
THE COURT ORDERS THAT:
1. by consent, this will be a specially managed proceeding;
2. the defendant is authorized to amend its defence before January 3, 2003 as suggested: the plaintiffs will be entitled to their costs incurred directly as a consequence of that amendment;
3. the plaintiffs' application for security is dismissed, without prejudice to the latter's right to renew the application if it finds facts which make Rule 416(1)(b) applicable;
4. with the consent of the defendant, the plaintiffs shall submit to this Court before January 17, 2003 a schedule for proceeding with the action and the application for a summary judgment.
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François Lemieux
Judge
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Ottawa, Ontario
December 20, 2002
Certified true translation
Suzanne M. Gauthier, C. Tr., LL.L.
FEDERAL COURT OF CANADA
TRIAL DIVISION
SOLICITORS OF RECORD
FILE: T-78-01
STYLE OF CAUSE: COLUMBIA PICTURES INDUSTRIES INC, DISNEY ENTERPRISES INC, METRO-GOLDWYN-MAYER STUDIOS INC, PARAMOUNT PICTURES CORPORATION, TRISTAR PICTURES INC, TWENTIETH CENTURY FOX FILM CORPORATION, UNITED ARTISTS CORPORATION, UNITED ARTISTS PICTURES INC, UNIVERSAL CITY STUDIOS INC, WARNER BROS, A DIVISION OF TIME WARNER ENTERTAINMENT CO. L.P.
-and-
ÉRIC VEILLETTE, doing business as ÉRIC VEILLETTE ÉLECTRONIQUE
REASONS FOR ORDER AND ORDER BY: LEMIEUX J.
pursuant to a notice of review under Rule 380(1) of the Federal Court Rules, 1998, without appearance by parties
DATE OF REASONS: December 20, 2002
WRITTEN SUBMISSIONS BY:
LORNE M. LIPKUS FOR THE PLAINTIFFS
ANNE-MARIE JUTRAS FOR THE DEFENDANTS
APPEARANCES:
KESTENBERG, SIEGAL, LIPKUS FOR THE PLAINTIFFS
TORONTO, ONTARIO
JUTRAS ET ASSOCIÉES FOR THE DEFENDANTS
DRUMMONDVILLE, QUEBEC
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