Date: 20040205
Docket: A-194-03
Citation: 2004 FCA 57
CORAM: DESJARDINS J.A.
LÉTOURNEAU J.A.
PELLETIER J.A.
BETWEEN:
BRIAN MCINTOSH, TOWNE CINEMA THEATRES (1975) LTD.,
ROKEMAY THEATRES LTD., COSMOPOLITAN CINEMAS LTD.
- and -
TOWNE CINEMA THEATRES (1975) LTD., CEECO INVESTMENTS INC., AND
PLACID DEVELOPMENTS LIMITED, CARRYING ON BUSINESS AS
THE BANFF CINEMA PARTNERSHIP
Appellants
and
SOCIETY OF COMPOSERS, AUTHORS AND
MUSIC PUBLISHERS OF CANADA
Respondent
Heard at Edmonton, Alberta, on January 27, 2004.
Judgment delivered at Ottawa, Ontario, on February 5, 2004.
REASONS FOR JUDGMENT BY: LÉTOURNEAU J.A.
CONCURRED IN BY: DESJARDINS J.A.
PELLETIER J.A.
Date: 20040205
Docket: A-194-03
Citation: 2004 FCA 57
CORAM: DESJARDINS J.A.
LÉTOURNEAU J.A.
PELLETIER J.A.
BETWEEN:
BRIAN MCINTOSH, TOWNE CINEMA THEATRES (1975) LTD.,
ROKEMAY THEATRES LTD., COSMOPOLITAN CINEMAS LTD.
- and -
TOWNE CINEMA THEATRES (1975) LTD., CEECO INVESTMENTS INC., AND
PLACID DEVELOPMENTS LIMITED, CARRYING ON BUSINESS AS
THE BANFF CINEMA PARTNERSHIP
Appellants
and
SOCIETY OF COMPOSERS, AUTHORS AND
MUSIC PUBLISHERS OF CANADA
Respondent
REASONS FOR JUDGMENT
LÉTOURNEAU J.A.
[1] Did the Trial judge of the Federal Court (judge), sitting in appeal from a decision of a Prothonotary, err when she concluded that she had not been persuaded that the Prothonotary's decision was based upon a wrong principle or upon a misapprehension of the facts or, in any other way, amounted to a misuse of judicial discretion?
[2] Although I am answering the question in the negative, my conclusion requires some explanation.
Facts and procedure
[3] The Prothonotary's order was rendered on July 11, 2002 pursuant to a motion made by the Society of Composers, Authors and Music Publishers of Canada (SOCAN). The purpose of SOCAN's motion was to amend its statement of claim in order to add new defendants. The motion was granted and the following new defendants were joined to the existing action initiated on March 18, 1992: Brian McIntosh in his personal capacity, Rokemay Theatres Limited, Towne Cinema Theatres (1975) Limited, Cosmopolitan Cinemas Ltd., Ceeco Investments Inc. and Placid Developments Limited carrying on business as the Banff Cinema Partnership.
[4] SOCAN's demand to amend originates from an alleged change of position taken by the defendant Landmark Cinemas of Canada Ltd. (Landmark). On April 7, 1994, Mr. McIntosh, acting as a representative of Landmark, confirmed at an examination for discovery that it was Landmark which operated theatres and exhibited motion pictures that infringed SOCAN's copyrights. However, according to SOCAN, Landmark asserted on July 23, 1999 that it neither operated motion pictures nor exhibited motion pictures at that time or at any time in the past.
[5] A further discovery examination was conducted of Mr. McIntosh who then affirmed that the infringing activities were carried out by the new defendants. The examination took place on May 16 and 17, 2001. On June 26, 2001, SOCAN served its notice of motion seeking the addition of the new defendants as parties to the action. The Prothonotary issued a timetable for the filing and serving of the material by the parties to the motion. The responding parties to the motion were to file and serve their motion records no later than October 1, 2001. A hearing on the motion was scheduled for October 17, 2001.
[6] The responding parties failed to serve and file their material by October 1, 2001. On October 10, 2001, the Prothonotary issued a direction that any party wishing to be heard at the hearing had to file and serve its motion record by October 15, 2001. Material was filed on behalf of the responding parties by October 12, 2001.
[7] The matter came on for hearing on October 17, 2001. The Prothonotary offered the parties an adjournment but neither party wished to avail themselves of that opportunity, and the matter proceeded. After hearing submissions, the Prothonotary issued an order adjourning the motion. Her order also included a direction to the plaintiff (SOCAN) concerning the sufficiency of its evidence in support of its motion. The order stated, in part, as follows:
ENDORSEMENT
Not being satisfied with the sufficiency of the evidence tendered and submissions made by the plaintiff and the corresponding submissions of the responding parties. I shall adjourn the plaintiff"s motion under paragraph 3 above [in relation to the joinder of the Defendants], to allow the plaintiff to file further and better affidavit evidence with supplementary submissions and an opportunity to the responding parties to reply.
The draft amended statement of claim does not constitute evidence. The plaintiff will accordingly provide further and better evidence of the facts relied on in support of the proposed amendments to the statement of claim and the submissions of the plaintiff in that regard.
The plaintiff is to distinguish the proposed amendments to add defendants and amendments consequential thereon from other amendments sought to be made. These are to be addressed separately in the plaintiff's submissions. The plaintiff is also to make submissions at law in respect of the scope and application of the Rules relied upon by the plaintiff and the grounds for the plaintiff's application to add Mr. McIntosh as defendant, in his personal capacity.
[8] The responding parties sought reconsideration of this order by notice of motion filed with the Court on October 26, 2001. By order dated March 22, 2002, the Prothonotary denied the motion for reconsideration.
[9] By order dated July 11, 2002, the Prothonotary granted the plaintiff's motion for joinder of the new defendants and amendment of its statement of claim. That order provided, in part, as follows:
ENDORSEMENT
I concur with and adopt the submissions of the plaintiff and accordingly will allow the addition of the proposed defendants as parties to this action, as well as the consequential and other proposed amendments to the claim.
In particular, I am satisfied that the proposed defendants are necessary to ensure that all matters in dispute in this claim may be completely determined and that they ought to be bound by the Court's determination, in this proceeding. I include in this category the addition of Brian McIntosh in his personal capacity. If, as the test requires in the circumstances, the material facts alleged in respect of Mr. McIntosh's activities are accepted as proven, they are sufficient to found a cause of action.
[10] On July 22, 2002, the new defendants filed appeal proceedings against the Prothonotary's order. The appeal was heard by a judge on April 8, 2003 and dismissed two days later : see Society of Composers, Authors and Music Publishers of Canada v. Landmark Cinemas of Canada Ltd., 2003 FCT 425, (2003) 25 C.P.R. (4th) 496. It is this decision which is now under appeal before us.
[11] At the hearing of this appeal, the respondent made a motion to adduce fresh evidence on appeal. The motion was not opposed and the respondent filed copies of letters which, for the years 1999 to 2003, evidence payments of royalties by the new defendants for the performance of musical work.
The standard of review applied by the judge
[12] The learned judge applied to the review of the Prothonotary's decision the standard of review determined by this Court in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, namely that a prothonotary's order ought not to be disturbed on appeal to a judge unless:
a) the questions raised in the motion are vital to the final issue of the case, or
b) the orders are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts.
I have used the new wording as reformulated in Merck & Co. v. Apotex Inc., 2003 F.C.A. 488 which reverses the sequence of the propositions as originally set out and makes it clear that the "question vital to the final issue of the case" refers to the subject matter of an order issued by the prothonotary, not the effect of such order : see paragraphs 18 and 19 of that decision. As our colleague Décary J.A. pointed out, there is from time to time some confusion on this last issue because the reviewing judge puts the emphasis on the effect of the prothonotary's order itself. In the context of an amendment, the judge has to look at the amendments themselves to see if they raised a question vital to the final issue of the case, not at the decision or order of the prothonotary refusing or granting the amendments.
[13] At paragraph 22 of her decision, the judge concluded that "the matter of joinder of parties and amendment of pleadings here does not raise a question vital to the final disposition of the case". Consequently, she ruled that she could not exercise the Prothonotary's discretion de novo. With respect, I believe the learned judge erred in so concluding.
[14] It is not always easy to distinguish between amendments to pleadings that are said to be routine amendments and amendments that raise a question that is vital to the final resolution of the case. In the present instance, the amendment sought to add, as new defendants, persons whose participation in the proceedings "is necessary to ensure that all matters may be effectually and completely be determined by the court": see Rule 104 of the Federal Court Rules, 1998. I have no hesitation in concluding that the amendment raises a question vital to the final resolution of the case. Accordingly, the judge should have exercised the Prothonotary's discretion de novo. I am, therefore, left with the duty to exercise de novo that discretion: see Merck & Co. v. Apotex Inc., supra, paragraph 28.
Whether the amendments should have been allowed
a) the election made by SOCAN
[15] The appellants have forcefully argued that the amendments should have been refused because SOCAN knew of the liability of the new defendants when it introduced its action in 1992 and had elected to bring its action solely against the defendant Landmark.
[16] I do not think that the appellants can invoke here the legal doctrine of election which, in essence, requires a person to make a choice between two mutually exclusive rights available to him or her: see Alberta Union of Provincial Employees v. Lethbridge Community College (2002), 215 D.L.R. (4th) 176 (Alta C.A.); Blueberry River Indian Band v. Canada (Department of Indian Affairs and Northern Development) (2001), 201 D.L.R. (4th) 35 (F.C.A.). The rights to sue Landmark and the new defendants were not mutually exclusive rights as all defendants could be sued for their infringing activities, either individually or jointly on account of a joint liability. In my view, the legal doctrine of election has no application.
b) The delay in suing the new defendants
[17] The appellants also submit that the amendments should be refused because a delay of ten years has elapsed since the filing of the Statement of Claim and a limitation period of three years applied to lawsuits for infringements. I agree with the judge that it remains open to the new defendants to plead their limitation defence. I am also in agreement with her finding that the applicability of a limitation defence depends upon the evidence adduced and that the matter is better left to be considered in the context of the whole action: see her decision at paragraphs 27 and 28.
[18] In addition, the appellant McIntosh, who is now sued in his personal capacity, is the person directly responsible for the delay in adding the new defendants. The seeking of an amendment resulted from the new position taken by Landmark suddenly denying its responsibility and implicating the new defendants as the actual infringers. I think that SOCAN acted diligently in seeking the joinder of the new defendants once it learned of their roles and involvement in the alleged infringements.
[19] I do not believe that, in these circumstances, the delay that the appellants complain of would justify refusing the amendments if they are necessary in order that the matters be effectively and completely determined by the court.
c) the propriety of the Prothonotary's behaviour
[20] The appellants question the manner in which the Prothonotary disposed of the motion to amend. They attack the process followed and imposed upon the parties by her. They characterize her approach as being suspect without, however, going to the full length of alleging that she lacked the needed impartiality or that her conduct gave rise to a reasonable apprehension of bias. They point to the following events previously mentioned in the summary of the facts.
[21] On the date of the hearing of the motion, the Prothonotary was not satisfied with the evidence presented in support of and in response to the motion to amend. She offered the parties the possibility of an adjournment, but the parties declined it and insisted that the matter proceed as it was. Notwithstanding that, the appellants argued, she ordered an adjournment of the motion against the will of the parties in order to allow SOCAN to file additional and better affidavit evidence in support of its motion. As it appears from the Endorsement, she ordered SOCAN to file better evidence of the facts relied on support of the proposed amendments to the statement of claim and the submissions of SOCAN in that regard. However, she also gave the parties opposing the motion an opportunity to respond to the new evidence.
[22] The appellants submit that parties are expected to proceed on the date set for hearing and that adjournments are only granted exceptionally. They referred us to the following directive to the Bar issued by former Associate Chief Justice Jerome:
TO: Members of the Profession
FROM: The Associate Chief Justice
DATE: February 17, 1993
SUBJECT: Case Management
The Trial Division has adopted the following practices to expedite cases and make better use of judges' time.
.....
3. Requests to Adjourn Trials/Hearings
The Federal Court does not overbook its trial sittings. Adjournments therefore cause serious inconvenience and expense.
When the Court has fixed a date for trial or for a hearing, all counsel will be expected to proceed on the date fixed. Requests to adjourn must be made to the Associate Chief Justice, and unless made promptly after the fixing of a hearing date, will be considered only in the most exceptional circumstances.
[23] I confess that it is unusual for a judge or a Prothonotary to, proprio motu, impose an adjournment on parties, who want to proceed on the basis of the material filed, for the purpose of allowing the moving party to file better evidence. It may also appear unusual to issue a direction to that effect to the moving party although the power itself to issue directions pursuant to Rule 385 of the Federal Court Rules, 1998 is not contested. Normally, a party presenting a motion is expected to provide appropriate and adequate evidence in support, failing which it will see its motion dismissed. Hence the surprise and the interrogations of the appellants at the turn of events.
[24] Counsel for SOCAN supported the decision made by the Prothonotary by reference to the fact that she acted as a case manager, that in such capacity she enjoys a wide discretion and that she ought to be accorded great deference. It refers to the following excerpt from Rothstein J.A. in Sawridge Band v. Canada, [2002] 2 F.C. 346, at paragraph 11:
We would take this opportunity to state the position of this Court on appeals from orders of case management judges. Case management judges must be given latitude to manage cases. This Court will interfere only in the clearest case of a misuse of judicial discretion. This approach was well stated by the Alberta Court of Appeal in Korte v. Deloitte, Haskins and Sells (1995), 36 Alta. L.R. (3d) 56, paragraph 3, and is applicable in these appeals. We adopt these words as our own.
This is a very complicated lawsuit. It is subject to case management and has been since 1993. The orders made here are discretionary. We have said before, and we repeat, that case management judges in these complex matters must be given some "elbow room" to resolve endless interlocutory matters and move these cases on to trial. In some cases, the case management judge will have to be innovative to avoid having the case bog down in a morass of technical matters. Only in the clearest cases of mis-use of judicial discretion will we interfere. In this case, the carefully crafted orders made by the case management judge display a sound knowledge of the rules and the related case law. In particular, the order contains a provision that the parties are free to return to the case management judge for relief from the imposition of any intolerable burden imposed by the order. No clear error has been shown and we decline to interfere. While there may be some inconvenience to some of the parties, this does not translate into reversible error. We are not here to fine tune orders made in interlocutory proceedings, particularly in a case such as this one.
[25] I agree that the decisions of case management judges or prothonotaries ought not to be interfered with lightly. However, their relative immunity from review does not authorize them to do what they want when they want. In the circumstances of the present case, I believe that there is a better rationale than deference for upholding the Prothonotary's decision to adjourn and order the filing of additional evidence in support of the motion to amend.
[26] There was a serious allegation that evidence newly uncovered revealed that other persons might be responsible for the copyrights infringements, either alone or in conjunction with the actual defendant, Landmark. The Prothonotary could have simply dismissed the motion to add new defendants. However, experienced as she is, she knew that a dismissal would not have prevented SOCAN from launching actions against the alleged new infringers without having to obtain leave. This in turn would have led, in time, to a motion for a consolidation of actions. In other words, much later in the process, the court would have been faced with a motion for a joinder of actions involving all the present defendants while she was, at the time, faced with a request for a joinder of the same defendants in an action already in progress. In terms of costs, efficiency and expeditiousness, provided of course that the joinder of parties was warranted, it was better to add the new defendants now than to force a multiplicity of new proceedings to the same avail which would have later ended in a joinder of actions.
[27] In these circumstances and from that perspective, I believe that an adjournment to allow SOCAN to perfect its material, with a corresponding right on the part of the appellants to respond, was understandable and in the interest of justice. I see no error in the exercise of the Prothonotary's discretion.
[28] I believe my conclusion also disposes of the appellants' argument that the case management Prothonotary did not issue a direction that is just, most expeditious and least expensive for the determination of the proceedings on its merits as authorized by Rule 385 of the Federal Court Rules, 1998.
Conclusion
[29] The proposed amendments raised questions vital to the final issue or resolution of the case. Having exercised the discretion de novo, I am satisfied that the joinder of the new defendants was necessary for a complete and effective determination of the issues by the court. Consequently, I would dismiss the appeal with costs.
"Gilles Létourneau"
J.A.
"I concur.
Alice Desjardins J.A."
"I agree
J.D.Denis Pelletier J.A."
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-194-03
Appeal from an Order of the Federal Court of Canada - Trial Division dated April 10, 2003, Docket No. T-633-92.
STYLE OF CAUSE: Brian McIntosh et al v. Society of Composers, Authors and Music Publishers of Canada
PLACE OF HEARING: Edmonton, Alberta
DATE OF HEARING: January 27, 2004
REASONS FOR JUDGMENT: LÉTOURNEAU J.A.
CONCURRED IN BY: DESJARDINS J.A.
PELLETIER J.A.
DATED: February 5, 2004
APPEARANCES:
Mr. George H. Akers For the Appellant, Brian
McIntosh
Mr. Mark E. Lindskoog Speaking for the Appellant, Cosmopolitan Cinemas Ltd.
Mr. Allen J. Sattin For the Appellant, Towne Cinema Theatres (1975) Ltd.
Mr. Michael M. Jamison For the Appellant, Rokemay Theatres Ltd.
Mr. Howard J. Sniderman For the Appellant, Placid
Developments Ltd. and speaking
for the Appellant, Ceeco
Investments Ltd.
Mr. Charles E. Beall For the Respondent
SOLICITORS OF RECORD:
Nicholl & Akers For the Appellant, Brian
Edmonton, Alberta McIntosh
Nicholl & Akers Speaking for the Appellant,
Edmonton, Alberta Cosmopolitan Cinemas Ltd.
Spier, Harben For the Appellant, Towne
Calgary, Alberta Cinema Theatres (1975) Ltd.
Mr. Michael M. Jamison For the Appellant, Rokemay
Calgary, Alberta Theatres Ltd.
Witten LLP For the Appellant, Placid
Edmonton, Alberta Developments Ltd. and speaking for the Appellant, Ceeco
Investments Ltd.
Gowling Lafleur Henderson LLP For the Respondent
Toronto, Ontario
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