Date: 20070220
Docket: A-44-07
Citation: 2007 FCA 76
Present: LÉTOURNEAU
J.A.
BETWEEN:
9038-3746 QUEBEC INC., 9014-5731 QUEBEC
INC.,
ADAM CERELLI,
CARMELO CERRELLI
Appellants
and
MICROSOFT
CORPORATION
Respondent
REASONS FOR ORDER
LÉTOURNEAU J.A.
[1]
The four
appellants make a motion in writing under Rule 369 of the Federal Courts
Rules for a stay of the order as well as the amended reasons for judgment
issued by Harrington J. of the Federal Court. Judgment was rendered on January
16, 2007. The order sought is to stay the execution of the Federal Court order
pending the appeal before this Court and until a final judgment is rendered by
this Court on the said appeal.
[2]
The
Federal Court found that the two corporate appellants and Carmello Cerrelli had
infringed the plaintiff’s copyrights. It ordered that the counterfeit CDs and
material seized by the Royal Canadian Mounted Police be delivered up to the
plaintiff, along with all other material in their possession, custody, control
or power which offends the Federal Court order.
[3]
In
addition, the three appellants mentioned above were ordered to jointly and
severally pay statutory damages to the plaintiff in the amount of $500,000.
Punitive damages of $100,000 were imposed on Carmello Cerelli. As for the two
corporate appellants, they were jointly and severally liable to also pay
punitive damages of $100,000 to the plaintiff.
[4]
Finally,
permanent injunctions were issued against the four appellants enjoining them,
among other things, from directly or indirectly infringing the plaintiff’s
trade-marks, passing off any wares or services, and making, selling,
distributing, advertising, possessing or importing into Canada counterfeit
copies of the twenty-five computer programs and related material in issue in
these proceedings.
[5]
Costs were
allocated to the plaintiff and were the subject of a separate order.
[6]
In its
written representation on the motion for a stay as well as in a letter sent to
the Administrator of the Court, the plaintiff objected to the disposition of
the motion in writing and requested an oral hearing of the motion. The
appellants indicated in a reply to that letter their willingness to proceed by
way of an oral hearing.
[7]
In this
Court, motion are, as a general rule, heard in writing unless the Court is of
the view, pursuant to the evidence submitted to it, that the matter cannot be
presented adequately in writing. There is no evidence to that effect in the
present instance and, therefore, the motion will be heard in writing.
[8]
After
careful consideration and analysis of the submissions made by the parties, I am
of the view that the motion for stay should be dismissed with costs.
[9]
The
appellants have simply provided no evidence that they would suffer irreparable
harm and that the balance of convenience favours them. In addition, the stay
sought is over-reaching. I will now address these two findings.
[10]
The stay
is over-reaching in that the corporate appellants neither challenge their
liability for infringement nor the permanent injunctions issued against them.
In addition, they do not attack the order that requires them to deliver up the
counterfeit CDs and related material as well as all the material in their
possession, custody, control or power which may offend the order. There is,
therefore, no justification for staying these important conclusions of the
Federal Court’s judgment and order. In fact, the appellant Carmelo Cerrelli is
contesting every aspect of the order issued against him while Adam Cerrelli
seeks to be exempted from the scope of the permanent injunctions. This was the
only conclusion taken against him. The corporate appellants’ challenge is
narrowly focussed on the damages: they want the statutory damages reduced to
$12,500 and an exoneration from punitive damages. Obviously, a general stay as
requested cannot and should not be issued. This brings me to the lack of
evidence in support of the motion.
[11]
Only
Carmello Cerrelli, whose credibility has been seriously put in doubt in the
judgment, filed an affidavit in support of the motion. The reasons found in
paragraph 3 of the affidavit read as follows:
3. The reasons for
the Appellants to request that the Order be stayed of [sic] the following,
namely:
- The
reasons invoked in the Notice of Appeal demonstrate [sic] are serious questions
to be tried;
- If
the stay of the Order is not granted, the Appellants will suffer an irreparable
harm if the relied [sic - relief] is not granted considering the award of
damages granted by the said Order as well as the extent of the various
injunctive orders issued by the Honourable Justice Harrington in the Order;
- The
balance of the inconvenience clearly favours the Appellants considering that
the execution of the various injunctive orders would grant the Respondent
substantial success prior to the hearing of the Notice of Appeal;
- Moreover,
without the issuance of the stay of proceedings, irreparable harm would be
suffered by the Appellants due to this significant impact on the financial
viability of the Corporate Appellants, if stay was not issued;
- Finally,
this Honourable Court should also stay execution of the Order with regards to
the assessment of costs due to the irreparable harm that the Appellants would
suffer based on the significant impact on the financial viability of the
latter;
[12]
I agree
with the submissions of the plaintiff that the affiant’s evidence on the issues
of irreparable harm and balance of convenience is nothing other than bold
assertions, unsupported by any evidence. For example, no evidence is offered as
to the financial situation of the corporate appellants that would enable this
Court to assess the impact that the award of damages would have on their
viability. At best, the assertions made by the affiant are speculative: see Centre
Ice Ltd. v. National Hockey League et al. (1994), 53 C.P.R. (3d) 34, at
pages 52 to 54; Nu-Pharm Inc. v. Merck & Co. et al., A-804-99 at
paragraphs 24 and 25. As Rothstein J.A. said in the Nu-Pharm Inc. case,
the “purpose of a stay is not to alleviate the financial difficulties of a firm
or to sustain it in its current form when other options for survival are
available”.
[13]
For these
reasons, the motion for a stay of the judgment and order of the Federal Court,
including the separate order as to costs, will be dismissed with costs.
“Gilles
Létourneau”
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