Date: 20000203
Docket: T-213-97
BETWEEN:
SOCIETY OF COMPOSERS, AUTHORS AND MUSIC PUBLISHERS OF CANADA
Plaintiff
- and -
1007442 ONTARIO LTD., c.o.b. as I DON KNOWS and CRYSTAL B. MOREY
Defendants
REASONS FOR ORDER
CULLEN, J.:
INTRODUCTION
[1] This is a motion to strike the Statement of Defence and grant judgment to the plaintiff. In the alternative, the plaintiff seeks an accurate and complete affidavit of documents. This motion arises in the context of copyright infringement. FACTS
[2] The plaintiff, Society of Composers, Authors and Music Publishers of Canada ("SOCAN"), is a non profit corporation established under the laws of Canada. SOCAN carries on business of granting licences for public performance and
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communication to the public by telecommunication in Canada of dramaticomusical works.
[3] The defendant, 1007442 Ontario Ltd., operates under the name "I DON KNOWS" and carries on business as a restaurant, bar, adult nightclub, discotheque, nightclub or similar establishment. The defendant presents to the public performances of musical works by means of live performances in which recorded music forms an integral part (hereinafter "exotic dancing"). The defendant, Crystal B. Morey, is the president and director of the defendant 1007442 Ontario Ltd.
[4] Under section 67 of the Copyright Act, SOCAN is the only performing rights society in Canada, and as such is entitled to collect certain royalties. These royalties or fees are published each year in the Canada Gazette as Tariffs 3B/3C. The Tariffs require a licensee to report figures yearly to SOCAN.
[5] SOCAN accused the defendants of having permitted the premises, a place of entertainment, to be used for performances in public by means of exotic dancing and recorded music of musical works in which SOCAN owns the performing rights, for their private profit.
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[6] On July 26, 1999, Mr. Justice Gibson ordered the defendants to serve their affidavit of documents on or before September 30, 1999, failing which the plaintiff would be entitled to apply ex parte and in writing for an order striking the statement of defence and granting it judgment.
Following several requests from SOCAN, the defendants provided an affidavit of documents which, according to SOCAN, was incomplete and deficient. After the due date set in the July 26, 1999 order, they provided the plaintiff with a supplemental list of documents, in the form of an unsworn document.
ARGUMENTS OF THE PLAINTIFF
SOCAN alleged that when a document is filed purporting to be an affidavit of documents which cannot be dignified as an affidavit of documents, the Court, under Rule 227(c), may strike the defence and grant judgment to the plaintiff. SOCAN claims that the affidavit of documents in question does not disclose relevant documents pertaining to the profitability and calculation of damages. It is submitted that the supplemental list of the defendants, apart from being served out of time, does not comply with the formal requirements for affidavits of documents. Therefore, the defendants have failed to comply with the order of Mr.
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Justice Gibson, and as such, the sanction for this failure was to allow SOCAN to move ex parte to strike the defence.
[9] In the alternative, it is submitted by SOCAN that the defendants be compelled to serve a complete and accurate affidavit of documents, in compliance with Mr. Justice Gibson's order.
[10] It is further submitted that, in this alternative, due to the deficient affidavit of document served, the time frame for examinations for discovery, which was ordered to be triggered by the service of an affidavit of documents, should be extended.
[11] SOCAN claimed that on motion arising from a deficient affidavit of documents, it is appropriate to award costs to the moving parry. Also, it stressed that a party ought to be compensated when another party's inaction forces judicial steps to be taken.
ARGUMENTS OF THE DEFENDANTS
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[12] The defendants denied that there was breach of the Court order since the supplemental list complemented the affidavit of documents, which was provided within the deadline.
[13] The defendants claimed that SOCAN's motion is in fact a fishing expedition. They stressed that the documents sought by the plaintiff are not relevant to the present matter. It was then submitted that the list of musical works, recordings or videos are not in their possession because they have contracted out a disc jockey services. Moreover, they contended that the documents concerning advertisement are not in their possession.
[14] They stressed that SOCAN is asking for their financial statements to be disclosed, when SOCAN itself does not list those documents in its affidavit of documents.
[15] Furthermore, the defendants argued that their revenues are generated from sales of food and beverage, and not from the music. They submitted that the Tarriffs should not apply to their business, since the performance of music works does not form an integral part of the live entertainment presented by this establishment. Therefore, they denied that a profit was made as a result of the copyright infringement.
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ANALYSIS
[16] Rule 223(1)of the Federal Court Rules provides that every party must serve an affidavit of documents on every other party within 30 days after the close of pleadings.
[17] Rule 222(2) provides that a document is relevant if the party intends to rely on it or if the document tends to adversely affect the party's case or to support another party's case.
[18] Rule 227 provides that where a Court is satisfied that an affidavit of documents is inaccurate or deficient, the Court may order that an accurate affidavit be filed, or strike all or part of the pleadings of the party on behalf of whom the affidavit was made.
[19] The test as to the production of a document in an affidavit of documents is that of
relevancy. In Reading & Bates Construction Co. v. Baker Energy Resources Co.,
Baker Marine Co., and Gaz Inter-Cité Québec Inc.', Justice McNair explained
how to determine whether documents are relevant:
The test as to what documents are required to be produced is simply relevance.
The test of relevance is not a matter for the exercise of discretion. What documents parties are entitled to is a matter of law, not a matter of discretion. The principle for determining what document properly relates to the matters in issue is that it must be one which might reasonably be supposed to contain information which may directly
'(l988), 25 F.T.R. 226 (T.D.).
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or indirectly enable the party requiring production to advance his own case or to damage the case of his adversary, or which might fairly lead him to a train of inquiry that could have either of these consequences.
[20] According to the recent jurisprudence, a relevant document ought to be one that might reasonably be supposed to contain information which may directly or indirectly enable the party seeking the production to advance his own case or damage the case of his adversary.
[21] In the present matter, the defendants provided an affidavit of documents containing 5 or 6 documents. After the deadline set by Mr. Justice Gibson, the defendants provided an unsworn list containing financial statements for the years 1993 and 1994.
[22] As the defendants mentioned, a mere suspicion that a document exists, or that it might be relevant would constitute a fishing expedition.' However, in the case at bar, I was convinced by SOCAN that some documents that are in the possession of the defendants are relevant to this action. Indeed, most of the documents sought by SOCAN are documents usually kept in the normal course of business.
[23] The defendants argued that no profit was made as a consequence of the alleged infringement. I must disagree with this argument. The defendants present exotic
2Galehead Inc. v. Trinity, [1998] F.C.J. No. 1669.
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dancing, and as such, music is part of the entertainment performance, and that
performance generates revenues to the nightclub. In Society of Composers,
Authors and Music Publishers of Canada v. 348803 Alberta Ltd. et al.3, It was
held that:
It matters not that the defendants had no specific charge, for example a cover charge at the door, for the music at their establishment. Music adds ambiance to such establishments. The music added a value to the defendants' operation, otherwise they would have given up playing music. Just what the value of music might be I must now arrive at in a rough and ready manner.
[24] Since this motion arises in the context of an action for damages for copyright
infringement, the financial statements of the defendants for 1994 to 1999 are certainly required for the purpose of calculating the possible damages and profits.
[25] Furthermore, I am of the belief that some relevant documents failed to be disclosed by the defendants, such as:
a) a general ledger;
b) some document showing evidence of the seating capacity for the purposes of Tariff 3C; and
c) some evidence of the musical works used by the defendants;
3(1997), 79 C.P.R. (3d) 449 (F.C.T.D.).
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[26] Therefore, I conclude that the defendants should be filing and serving another affidavit of documents containing the documents mentioned in the above paragraphs [24] and [25].
Ottawa, Ontario B. Cullen
February 3, 2000 J.F.C.C.
FEDERAL COURT OF CANADA TRIAL DIVISION
NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD
COURT FILE NO.: T-2513-97
STYLE OF CAUSE: SOCIETY OF COMPOSERS, AUTHORS AND MUSIC PUBLISHERS OF CANADA v. 1007442 ONTARIO LTD. AND OTHERS
PLACE OF HEARING: TORONTO, ONTARIO DATE OF HEARING: NOVEMBER 29, 2000 REASONS FOR ORDER OF CULLEN J. DATED: FEBRUARY 3, 2000
APPEARANCES
MR. JAMES E. MILLS FOR PLAINTIFF
MR. HENRY LUE FOR DEFENDANTS
SOLICITORS OF RECORD:
GOWLING, STRATHY & HENDERSON FOR PLAINTIFF OTTAWA, ONTARIO
DIMOCK STRATTON CLARIZIO FOR DEFENDANTS TORONTO, ONTARIO