Date: 20000928
Docket: T-568-98
Ottawa, Ontario, this 28th day of September, 2000
| PRESENT: THE HONOURABLE MR. JUSTICE JOHN A. O'KEEFE |
BETWEEN:
SHERIDAN GYMNASIUM EQUIPMENT LIMITED
Plaintiff
- and -
GYMNASIUM & HEALTH EQUIPMENT LIMITED,
THE WALTER FEDY PARTNERSHIP, and
WATERLOO REGION ROMAN CATHOLIC
SEPARATE SCHOOL BOARD
Defendants
REASONS FOR ORDER AND ORDER
O'KEEFE J.
[1] This decision deals with a motion by Sheridan Gymnasium Equipment Limited (the "plaintiff") to amend its statement of claim and a motion by the defendants, Gymnasium & Health Equipment Limited and The Walter Fedy Partnership (the "defendants") for orders amending their defence and counterclaim, granting summary judgment to the defendants dismissing all of the plaintiff's claims against all defendants, which are grounded in the Copyright Act, R.S., c. c-30 (the "Act") and an order pursuant to Rule 384 of the Federal Court Rules, 1998 that the counterclaim and any remaining aspects of the action be managed as a specially managed proceeding. The defendants also had a request for summary judgment with respect to the patent claim but this request was withdrawn.
[2] I will deal first with the plaintiff's motion to amend its statement of claim. The requested amendments which struck out the last six words of paragraph 13 of the statement of claim and paragraphs 8, 10, 14, 15, 16, 17, 18, 19, 47(c), 47(d)(iv), (v), (vi), (vii), (viii) and 47(g) all reflect amendments necessitated by the Order of Prothonotary Lafrenière dated May 10, 1999. The defendants had no objection to these amendments accordingly, these amendments are allowed.
[3] The plaintiff seeks to withdraw paragraph 42 which reads:
42. Mr. Sebert authored these DRAWINGS while employed by Madsen Manufacturing Limited. The DRAWINGS were created in the course and scope of Mr. Sebert's employment and therefore, all rights in the DRAWINGS, including the copyright in the DRAWINGS were owned by Madsen Manufacturing Limited. The copyright in the DRAWINGS was subsequently assigned to SHERIDAN from Madsen Manufacturing Limited.
And to add as paragraph 43:
43. The Plaintiff is the owner of the copyright in the DRAWINGS, which has been registered as Copyright Registration No. 469,358 for "Madsen Retractable Stage Assembly Detail Sheets 1 to 6". Marked as Schedule "A" to the Amended Statement of Claim is a copy of Copyright Registration No. 469,358.
[4] When the plaintiff approached the defendants concerning the above amendments,
the defendants would not consent to the amendments as the amended allegations of copyright infringement did not disclose a proper cause of action and further, the statement of claim as amended constituted the withdrawal of an admission that Mr. Sebert was employed by someone else at the time of his authorship.
[5] The confirmatory assignment of the copyright stated:
CONFIRMATORY ASSIGNMENT
| The undersigned, Robert Sebert, formerly the President of Madsen |
Manufacturing Limited (the "Assignor") whose address is 40 Heyden Avenue, R.R. #1, Orillia, Ontario L3V 6H1 confirms that as of January 1, 1980, he did assign to Richard Sheridan carrying on business as Sheridan Sales Company (the "Assignee") whose address is 6 Francis Rd., Orillia, Ontario L3V 2L7 all the Assignor's rights, title or interest, including all copyright, in a certain work commonly known as Madsen Retractable State Assembly Detail Sheets 1 to 6 (the "Work") and any accrued cause of actions related thereto and also confirms that the author, Robert Sebert, of the Work was an employee of the Assignor at the time the Work was created in or about June, 1973;
The undersigned confirms that in consideration of $5.00 and other good and valuable consideration provided to the Assignor, the receipt and sufficiency which is hereby confirmed, the Assignor did assign, transfer and make over to Assignee in said Work including all right to possession and all copyright throughout the world, including, without limitation, the right to file applications for registration of such rights and including assignment and transfer of any accrued cause of actions related thereto.
SIGNED this 19th day of February, 1998, at Orillia, Ontario, Canada.
| SIGNED IN THE PRESENCE OF ) |
| ) "Signed: Robert Sebert" |
| "Signed: Ganeera Pehalle" ) Print Name: Robert Sebert |
(Uncertain of Spelling)
[6] When the drawings were authored by Robert Sebert in June, 1973 Madsen
Industries Limited was not in existence. It came into being on June 28, 1974 by virtue of Sires Industries Limited changing its name to Madsen Industries Limited.
[7] The copyright infringement alleged in the statement of claim relates to drawings
of a retractable stage.
[8] The defendants argue that the amendment proposed by the plaintiff is the
withdrawal of an admission.
[9] Sections 75 and 3 of the Federal Court Rules, 1998 state:
| Amendments with leave 75. (1) Subject to subsection (2) and rule 76, the Court may, on motion, at any time, allow a party to amend a document, on such terms as will protect the rights of all parties. |
Modifications avec autorisation 75. (1) Sous réserve du paragraphe (2) et de la règle 76, la Cour peut à tout moment, sur requête, autoriser une partie à modifier un document, aux conditions qui permettent de protéger les droits de toutes les parties. |
| General principle 3. These Rules shall be interpreted and applied so as to secure the just, most expeditious and least expensive determination of every proceeding on its merits. |
Principe général 3. Les présentes règles sont interprétées et appliquées de façon à permettre d'apporter une solution au litige qui soit juste et la plus expéditive et économique possible. |
[10] In Anderson Consulting v. Canada [1998] 1 F.C. 605 (F.C.A.) the Court stated at
pages 611 - 613:
| [13] At the other end, the British Columbia courts have taken a more flexible |
approach and have not required as a condition essential to a withdrawal of an admission that the admission in the statement of defence be made inadvertently or hastily. Rather, they have adopted as a test that, in all the circumstances of the case, there be a triable issue which ought to be tried in the interests of justice and not be left to an admission of fact.4 Under such a test, inadvertence, error, hastiness, lack of knowledge of the facts, discovery of new facts, and timeliness of the motion to amend become factors to be taken into consideration in deciding whether or not the circumstances who that there is a triable issue which ought to be tried in the interests of justice.5
| [14] We prefer the approach taken by the courts in British Columbia which |
gives the Court seized with a motion to amend pleadings, including an amendment withdrawing or purporting to withdraw an admission, the needed flexibility to ensure that triable issues are tried in the interests of justice without injustice to the litigants.
. . .
| [16] Indeed, the desirable flexibility in matters of amendment to pleadings, |
including, in our view, the withdrawal of admissions, was stated by our colleague Décary J.A. in the following terms in the Canderel case:
| . . . 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.7 |
| [17] Applying this test to the present case, there is, in our view, no doubt that |
the proposed amendments relate to a triable issue that should be decided at trial and that, for the purpose of determining the real questions in controversy between the parties, it is in the interests of justice that the amendments be authorized.
| [18] Furthermore, it is still early in the process and the discoveries are not yet |
completed, the respondent having amended substantially its statement of claim. Consequently, we see no prejudice or injustice resulting to the respondent in allowing the amendments. Indeed, no evidence of prejudice has been put before the Motion Judge or before us. The fact that the proposed amendments might make the case more difficult for a party to win is not the kind of prejudice that is in issue on motions to amend the pleadings.
[11] The Federal Court of Appeal has held in Nidek Co., Ltd. et al. v. Visx Inc. (1996)
72 C.P.R. (3d) 19 at page 24 that:
. . . In similar fashion, the Court should not accept any evidence in support of an application for leave to amend pleadings under Rule 420 unless evidence is required in order to clarify the nature of the proposed amendments. Rather, the Court must assume that the facts pleaded in the amendments are true for the purposes of considering whether or not to grant leave to amend.
[12] The amendments, in order to be granted, must show that there is a triable issue
which ought to be tried in the interests of justice and in addition the allowance of the amendments must not result in an injustice to the other party not capable of being compensated by an award of costs.
[13] In the present case, I believe there is a triable issue in that the confirmatory
assignment appears to be from Robert Sebert personally to Richard Sheridan carrying on business as Sheridan Sales Company. If this is true and I have no reasons to doubt its truth at this stage of the proceeding, then there has been a written assignment of the copyright and the plaintiff is entitled to make a claim for copyright infringement. This is a triable issue. By way of background, Richard Sheridan made a confirmatory assignment of the copyright in writing to the plaintiff.
[14] It is in the interests of justice to have this dispute between the parties determined.
If the plaintiff is correct that there was an assignment as alleged in the confirmatory assignment, it is in the interests of justice that the amendments be allowed. It is easy to see how paragraph 42 could have been drafted as it was, given the similarity of the company names.
[15] It is my opinion that the defendants can be compensated by an award of costs and
that no injustice therefore exists for them. Discoveries are not yet completed in the case.
[16] I would therefore allow the amendment which deletes paragraph 42 of the
statement of claim and adds paragraph 43 to the statement of claim.
Defendants' Amendments to Statement of Defence and Counterclaim
[17] The defendants have proposed amendments to paragraphs 11 and 12 of the statement of defence and to paragraphs 24, 25, 26, 27 and 28(d) and (e) of the counterclaim.
[18] I have reviewed each of these proposed amendments and I believe that they are
the types of amendments contemplated by Rule 75 and each of these amendments would, in my opinion, survive a motion to strike. Accordingly, I would allow these proposed amendments.
Summary Judgment Motion by the Defendants, Gymnasium & Health Equipment
Limited and The Walter Fedy Partnership
[19] The defendants have made a motion for an order pursuant to Rules 213 to 219 of the Federal Court Rules, 1998:
"Granting summary judgment to the defendants declaring that the platiniff did not, at any material time, own the alleged copyright asserted against the defendants in this action and dismissing all claims of the plaintiff's action against all defendants which are grounded on the Copyright Act."
[20] Paragraphs 41 to 46 of the statement of claim dealt with the alleged copyright
infringement. Basically, the plaintiff claims that the defendant, Gymnasium & Health Equipment Limited ("GHE") has copied the drawings for "Madsen Retractable Stage Assembly Detail Sheets 1 to 6 for which the plaintiff claims it owns the copyright.
[21] The defendants argue that this claim cannot succeed as the plaintiff is not the
owner of the copyright in the drawings as there was no written assignment of the copyright to him.
[22] For the purposes of the summary judgment motion, I have adopted the position
that paragraph 42 of the statement of claim is gone and paragraph 43 has been added to the statement of claim. This means that there is a pleading that alleges that the plaintiff is the owner of the trade-mark in the "DRAWINGS".
[23] Rules 213 to 218 of the Federal Court Rules, 1998, read as follows:
| 213. (1) Where available to plaintiff -- A plaintiff may, after the defendant has filed a defence, or earlier with leave of the Court, and at any time before the time and place for trial are fixed, bring a motion for summary judgment on all or part of the claim set out in the statement of claim. (2) Where available to defendant -- A defendant may, after serving and filing a defence and at any time before the time and place for trial are fixed, bring a motion for summary judgment dismissing all or part of the claim set out in the statement of claim. |
213. (1) Requête du demandeur -- Le demandeur peut, après le dépôt de la défense du défendeur -- ou avant si la Cour l'autorise -- et avant que l'heure, la date et le lieu de l'instruction soient fixés, présenter une requête pour obtenir un jugement sommaire sur tout ou partie de la réclamation contenue dans la déclaration. (2) Requête du défendeur -- Le défendeur peut, après avoir signifié et déposé sa défense et avant que l'heure, la date et le lieu de l'instruction soient fixés, présenter une requête pour obtenir un jugement sommaire rejetant tout ou partie de la réclamation contenue dans la déclaration. |
| 214. (1) Obligations of moving party -- A party may bring a motion for summary judgment in an action by serving and filing a notice of motion and motion record at least 20 days before the day set out in the notice for the hearing of the motion. (2) Obligations of responding party -- A party served with a motion for summary judgment shall serve and file a respondent's motion record not later than 10 days before the day set out in the notice of motion for the hearing of the motion. |
| 214. (1) Obligations du requérant -- Toute partie peut présenter une requête pour obtenir un jugement sommaire dans une action en signifiant et en déposant un avis de requête et un dossier de requête au moins 20 jours avant la date de l'audition de la requête indiquée dans l'avis. (2) Obligations de l'autre partie -- La partie qui reçoit signification d'une requête en jugement sommaire signifie et dépose un dossier de réponse au moins 10 jours avant la date de l'audition de la requête indiquée dans l'avis de requête. |
| 215. Mere denial -- A response to a motion for summary judgment shall not rest merely on allegations or denials of the pleadings of the moving party, but must set out specific facts showing that there is a genuine issue for trial. |
215. Réponse suffisante -- La réponse à une requête en jugement sommaire ne peut être fondée uniquement sur les allégations ou les dénégations contenues dans les actes de procédure déposés par le requérant. Elle doit plutôt énoncer les faits précis démontrant l'existence d'une véritable question litigieuse. |
| 216. (1) Where no genuine issue for trial -- Where on a motion for summary judgment the Court is satisfied that there is no genuine issue for trial with respect to a claim or defence, the Court shall grant summary judgment accordingly. (2) Where no genuine issue for trial -- Where on a motion for summary judgment the Court is satisfied that the only genuine issue is (a) the amount to which the moving party is entitled, the Court may order a trial of that issue or grant summary judgment with a reference under rule 153 to determine the amount; or (b) a question of law, the Court may determine the question and grant summary judgment accordingly. (3) Summary judgment -- Where on a motion for summary judgment the Court decides that there is a genuine issue with respect to a claim or defence, the Court may nevertheless grant summary judgment in favour of any party, either on an issue or generally, if the Court is able on the whole of the evidence to find the facts necessary to decide the questions of fact and law. (4) Where motion dismissed -- Where a motion for summary judgment is dismissed in whole or in part, the Court may order the action, or the issues in the action not disposed of by summary judgment, to proceed to trial in the usual way or order that the action be conducted as a specially managed proceeding. |
| 216. (1) Absence de véritable question litigieuse -- Lorsque, par suite d'une requête en jugement sommaire, la Cour est convaincue qu'il n'existe pas de véritable question litigieuse quant à une déclaration ou à une défense, elle rend un jugement sommaire en conséquence. (2) Somme d'argent ou point de droit -- Lorsque, par suite d'une requête en jugement sommaire, la Cour est convaincue que la seule véritable question litigieuse est: a) le montant auquel le requérant a droit, elle peut ordonner l'instruction de la question ou rendre un jugement sommaire assorti d'un renvoi pour détermination du montant conformément à la règle 153; b) un point de droit, elle peut statuer sur celui-ci et rendre un jugement sommaire en conséquence. (3) Jugement de la Cour -- Lorsque, par suite d'une requête en jugement sommaire, la Cour conclut qu'il existe une véritable question litigieuse à l'égard d'une déclaration ou d'une défense, elle peut néanmoins rendre un jugement sommaire en faveur d'une partie, soit sur une question particulière, soit de façon générale, si elle parvient à partir de l'ensemble de la preuve à dégager les faits nécessaires pour trancher les questions de fait et de droit. (4) Rejet de la requête -- Lorsque la requête en jugement sommaire est rejetée en tout ou en partie, la Cour peut ordonner que l'action ou les questions litigieuses qui ne sont pas tranchées par le jugement sommaire soient instruites de la manière habituelle ou elle peut ordonner la tenue d'une instance à gestion spéciale. |
| 217. Effect of summary judgment -- A plaintiff who obtains summary judgment under these Rules may proceed against the same defendant for any other relief and against any other defendant for the same or any other relief. |
217. Effet du jugement sommaire -- Le demandeur qui obtient un jugement sommaire aux termes des présentes règles peut poursuivre le même défendeur pour une autre réparation ou poursuivre tout autre défendeur pour la même ou une autre réparation. |
| 218. Powers of Court -- Where summary judgment is refused or is granted only in part, the Court may make an order specifying which material facts are not in dispute and defining the issues to be tried, including an order (a) for payment into court of all or part of the claim; (b) for security for costs; or (c) limiting the nature and scope of the examination for discovery to matters not covered by the affidavits filed on the motion for summary judgment or by any cross-examination on them and providing for their use at trial in the same manner as an examination for discovery. |
| 218. Pouvoirs de la Cour -- Lorsqu'un jugement sommaire est refusé ou n'est accordé qu'en partie, la Cour peut, par ordonnance, préciser les faits substantiels qui ne sont pas en litige et déterminer les questions qui doivent être instruites, ainsi que: a) ordonner la consignation à la Cour d'une somme d'argent représentant la totalité ou une partie de la réclamation; b) ordonner la remise d'un cautionnement pour dépens; c) limiter la nature et l'étendue de l'interrogatoire préalable aux questions non visées par les affidavits déposés à l'appui de la requête en jugement sommaire, ou limiter la nature et l'étendue de tout contre-interrogatoire s'y rapportant, et permettre l'utilisation de ces affidavits lors de l'interrogatoire à l'instruction de la même manière qu'à l'interrogatoire préalable. |
| [24] Madam Justice Tremblay-Lamer of this Court in Granville Shipping Co. v. |
Pegasus Lines Ltd. S.A. et al. (1996) 111 F.T.R. 189 (F.C.T.D.) has summarized the general principles that apply in applications for summary judgment as follows:
| [8] I have considered all of the case law pertaining to summary judgment and I summarize the general principles accordingly: |
| 1. the purpose of the provisions is to allow the court to summarily dispense with cases which ought not proceed to trial because there is no genuine issue to be tried (Old Fish Market Restaurants v. 1000357 Ontario Inc. et al.), at p. 222; |
| 2. there is no determinative test (Feoso Oil Limited v. Sarla (1995), 184 N.R. 307 (F.C.A.)) but Stone, J.A., seems to have adopted the reasons of Henry, J., in Pizza Pizza ltd. v. Gillespie (Pizza Pizza) (1990), 75 O.R. (2d) 225 (Gen. Div.). It is not whether a party cannot possibly succeed at trial, it is whether the case is so doubtful that it does not deserve consideration by the trier of fact at a future trial; |
| 3. each case should be interpreted in reference to its own contextual framework (Blyth, supra, and Feoso, supra); |
| 4. provincial practice rules (especially rule 20 of the Ontario Rules) can aid in interpretation (Feoso, supra, and Collie, supra); |
| 5. this court may determine questions of fact and law on the motion for summary judgment if this can be done on the material before the court (this is broader than rule 20 of the Ontario Rules of Civil Procedure) (Patrick); |
| 6. on the whole of the evidence, summary judgment cannot be granted if the necessary facts cannot be found or if it would be unjust to do so (Pallman, supra, and Sears, supra); |
| 7. In the case of a serious issue with respect to credibility, the case should go to trial because the parties should be cross-examined before the trial judge (Forde, supra, and Sears, supra). The mere existence of apparent conflict in the evidence does not preclude summary judgment; the court should take a "hard look" at the merits and dec ide if there are issues of credibility to be resolved (Stokes, supra)." |
| [25] I have considered the material filed on this motion and I have also considered the |
arguments of counsel and I am of the opinion that summary judgment cannot be granted. The amended pleading states that the plaintiff is the owner of the copyright in the drawings. There has been a confirmatory assignment of the copyright in the drawings from Mr. Sebert to Mr. Sheridan and from Mr. Sheridan to the plaintiff. I do not agree with the defendants that the confirmatory assignment from Mr. Sebert to Mr. Sheridan states that Mr. Sebert was employed by Madsen Manufacturing Limited at the time the drawings were created. The assignment states that "the undersigned, Robert Sebert, formerly the President of Madsen Manufacturing Limited" was the assignor. I believe this means Robert Sebert was the assignor and that the other words merely describe who Robert Sebert was. As well, a perusal of the assignment does not state that Robert Sebert was the employee of Madsen Manufacturing Limited.
| [26] I am of the opinion that the confirmatory assignment was an assignment of the |
copyright in the drawings by the creator of the drawings, Robert Sebert to Mr. Sheridan. The evidence available to me does not satisfy me that Mr. Sebert was employed by anyone at the time he created the drawings hence he would be the owner of the copyright. This finding answers the defendants' argument that there was no assignment in writing of the copyright as is required by the Copyright Act.
| [27] It follows that there would be a triable issue for trial, namely did infringement of |
the copyright occur. The proper forum to establish this is at trial. I am not satisfied that the case is so doubtful that it does not deserve the consideration of the trier of fact at a future time.
| [28] The motion for summary judgment is therefore dismissed. |
| [29] The parties have agreed that this file should be managed as a specially managed |
proceeding to Rule 384 of the Federal Court Rules, 1998. I agree and I would so order.
| [30] The parties have requested to address the issue of costs in these motions by |
submissions in writing. The parties shall have three weeks from the date of this decision to make submissions in writing with respect to costs.
| [31] The defendants have asked that should I allow the plaintiff's proposed |
amendments then the defendants would like the opportunity to carry out additional discoveries and to file an amended defence. I will grant the request of the defendants. Time limits for carrying out these steps, if necessary, can be set as part of the specially managed proceedings. The same relief is granted to the plaintiff, if necessary, in connection with the defendants' amendments.
ORDER
| [32] IT IS ORDERED that: |
1. The amendments referred to in paragraph 2 of this decision are allowed.
2. Paragraph 42 of the statement of claim is deleted and the proposed paragraph 43 is added to the statement of claim.
3. The defendants' proposed amendments outlined in paragraph 17 of this decision are allowed.
4. The motion for summary judgment by the two named defendants is dismissed.
5. This file will be a specially managed proceeding pursuant to Rule 384 of the Rules of this Court.
6. The parties shall have three weeks from the date of this decision to submit written submissions on costs.
7. The parties shall have the opportunity to file any amended pleadings necessitated by the amendments and to conduct any further discoveries necessitated by the amendments.
"John A. O'Keefe"
J.F.C.C.
Ottawa, Ontario
September 28, 2000