C.A. No. 121332
NOVA SCOTIA COURT OF APPEAL
Cite as: Montykola Investments Inc. v. Robert D. Sutherland Architects Ltd.,
Hallett, Freeman, and Bateman, JJ.A.
BETWEEN:
MONTYKOLA INVESTMENTS INC., ) John Kulik
DEAN CORKUM, and PATRICIA CORKUM ) for the Appellants
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Appellants )
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ROBERT D. SUTHERLAND ) William P. Thomson
ARCHITECTS LIMITED ) for the Respondent
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Respondent )
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) Appeal Heard:
) April 3, 1996
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) Judgment Delivered:
) April 25, 1996
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THE COURT: Appeal allowed per reasons for judgment of Freeman, J.A.; Hallett and Bateman, JJ.A., concurring.
Freeman, J.A.
This appeal is from a Supreme Court Judgment awarding damages of $12,500 to the Respondent for infringement of its copyright in a conceptual site plan submitted in a development proposal process related to land of the Appellant, Montykola Investments Inc. in Wolfville, N.S.
In 1988 Dr. Wayne Hills, a businessman and dentist, became interested in developing Montykola's 3.2 acre lot near Highland Avenue. He ascertained that the price was $170,000 but a draft agreement of purchase and sale he had prepared was never signed. He recruited Robert Sutherland, an architect and principal of the respondent company, to provide architectural services in return for a partnership interest in the project.
Dr. Hills and Mr. Sutherland steered their proposal to develop the property through to approval at a public meeting of Wolfville Town Council on October 16, 1989. Approval took the form of a resolution that a development agreement be executed incorporating the conceptual plan provided by Mr. Sutherland.
Development issues had been identified in a series of earlier meetings with Gregg Morrison, the Wolfville Town Engineer and Planning officer, the Planning Advisory Committee, the public and the council. These were addressed by Mr. Sutherland in revisions to his plan which he prepared and submitted to Mr. Morrison. The plan was attached as a schedule to a draft development agreement between the Town and Dr. Hills which had been prepared by the town solicitor and circulated prior to the October 16th meeting.
Following the meeting Mr. Morrison wrote the Town solicitor as follows:
Attached is a marked up copy of the Development Agreement for the above. Please make the changes as shown in red and return four copies for signing in my office. We will attach the required schedules.
Although the negotiations have taken place with Dr. Wayne Hills (who has an option on the land) the owner of the property is currently Monty Kola Investments. I am assuming that we would make both a party to the agreement and collectively, they would be the "Developer", or it would be adequate to simply have Monty Kola Investments sign as landowner. Please advise on this point.
While Mr. Morrison was mistaken as to the option, it was not a material point in light of his understanding that development agreements run with the land, and therefore must include the landowner as a party. A prudent developer proposing to develop land that he did not own would ensure his right to acquire it once his project was approved. Mr. Morrison's understanding was reasonable and appears to have been shared by all parties. It was not challenged at the trial or on the appeal.
The revised draft prepared by the town solicitor included Dr. Hills as "Developer" and Montykola Investments as "Landowner". It was never signed by Dr. Hills, who did not respond to Mr. Morrison's request for four additional copies of the plan to be attached as schedules to copies of the agreement.
Dr. Hills testified that Montykola increased the price to $220,000 almost immediately following approval. The defendant, Dean Corkum, an officer of Montykola with whom Dr. Hills was in frequent contact, testified that Dr. Hills delayed the purchase and that the price did not increase until February, 1990.
In March, 1990, another buyer, X.H.H. Holdings Limited, controlled by Charles Richardson, entered the picture at the price of $210,000. On October 16, 1990, the Montykola property was conveyed to X.H.H. which has developed it.
X.H.H. submitted a similar, but original, proposal to the Town based on the concept it had developed in a project called Blue Heron Court. The first intention of X.H.H. was to develop more units but when objections were raised as to density, this was reduced to forty, the number already approved. Although the planning issues were identical with the respondent's proposal, processing the new proposal would have involved repeating the same steps already completed for the first one.
On March 27, 1990, Mr. Morrison requested the Town Solicitor to prepare a new draft of the development agreement showing Montykola as owner without reference to Dr. Hills. The proposal continued to be defined by the Sutherland plan which was attached as Schedule "A" although copies of the plan were still required to provide additional executed copies of the agreement.
The following is from minutes of a meeting of the Wolfville Planning Advisory Committee held September 6, 1990:
Mr. Bruce Cormier [representing X.H.H.] presented revised plans for five 8 unit condominiums. Mr. Cormier stated that the development was similar to the proposal previously presented by Dr. Wayne Hills, although the construction would probably take place all at once and not phased in as proposed by Dr. Hills.
XHH Holdings has purchased a lot south east of the proposed Development in order to develop a roadway connnection to Highland Avenue. This roadway would be paved and maintained by the property owner.
Mr. Cormier pointed out that the development would be similar to the construction taking place presently on Blue Heron Court. The buildings would be of high quality wood and each unit would be 720 square feet which are smaller than the units proposed by Dr. Hills.
The plans also provide for a large green area.
Mr. Cormier said that at this point XHH Holdings requested that they be permitted to build under the development agreement issued to Dr. Hills. . . .
Gregg Morrison reminded the Committee that Development Agreements travel with the land and that XHH could proceed with the project and apply for an amendment to the original agreement in order to change the roadway.
It was moved by Peter Herbin and seconded by Don McLeod that the Planning Advisory Committee recommend to council that an amendment to the Hills Development Agreement be allowed for the removal of the cul de sac and allow for the construction of a 26 foot wide roadway south east of the development, connecting to Highland Avenue through civic address 94 Highland Avenue. Motion carried.
On October 11, 1990, Montykola Investments Inc., by its signing officers Dean Corkum and Patricia Corkum, executed a development agreement similar to the agreement approved almost a year earlier saving only that the parties were shown as the Town of Wolfville and Montykola, as Developer. Dr. Hills was not mentioned. Four copies of the Sutherland plan appeared in Mr. Morrison's office without explanation and were, presumably, attached to the executed copies as Schedule "A". On October 15, 1990, Montykola conveyed the property to X.H.H. On the same date, Wolfville Town Council passed the amendment to the development agreement replacing the cul-de-sac with a through street.
The respondent subsequently sued the appellants claiming Montykola had been unjustly enriched by its efforts, and later added by amendment a claim for infringement of the respondent's copyright in the plan. The unjust enrichment claim was rejected at trial, but the respondent succeeded on infringement of the copyright in the plan and damages were assessed at $12,500. The trial judge pierced the corporate veil, holding the Corkums personally liable, because monies from the sale of all of the company's assets had been distributed.
The two issues on appeal are the finding that the copyright was infringed and the personal liability of the Corkums.
Copyright Infringement
In Compo Co. Ltd. v. Blue Crest Music (1979), [1980] S.C.R. 357 (S.C.C.) Estey, J. stated at pp. 372-373:
. . . copyright law is neither tort law nor property law in classification, but is statutory law. It neither cuts across existing rights in property or conduct nor falls between rights and obligations heretofore existing in the common law. Copyright legislation simply creates rights and obligations upon the terms and in the circumstances set out in the statute. This creature of statute has been known to the law of England at least since the days of Queen Anne when the first copyright statute was passed. It does not assist the interpretive analysis to import tort concepts. The legislation speaks for itself and the action of the appellant must be measured according to the terms of the statute.
Under ss. 2 and 5 of the Copyright Act, R.S.C. 1989 c-42 copyright subsists in an original artistic work, which includes drawings, maps, charts and plans. including architectural sketches. Under s. 2,
"infringing", when applied to a copy of a work in which copyright subsists, means any copy, including any colourable imitation, made or imported in contravention of this Act.
Section 3 (1) provides:
For the purposes of this act, "copyright" means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform, or in the case of a lecture to deliver, the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof . . .
Under s. 4 publication "means the issue of copies of the work to the public".
Section 27 (1) provides:
Copyright in a work shall be deemed to be infringed by any person who, without the consent of the owner of the copyright, does anything that, by this Act, only the owner of the copyright has the right to do.
The site plan in which the respondent claims a copyright is based on a perimeter survey of the property which is not in issue. Mr. Sutherland testified that he claimed no copyright in the floor plans or elevations which were included, but did claim a copyright on the location of the street and buildings containing 40 apartment units, four buildings of eight units each and two buildings of four units each. The principal development issue considered during the approval process was the density of development, and the respondent's site plan was an illustration of how 40 apartment units could be situated in six buildings fronting on a cul-de-sac on the subject property. The appellants question whether the solution represented by the plan is sufficiently original to support a copyright. I will assume, without deciding, that the threshhold copyright issue has been met and that the plan was subject to copyright protection.
I will also assume, without deciding, that the town of Wolfville, in preparing the development agreement executed by the Town and Montykola, did something that, by the Act, only the owner of the copyright had the right to do in the absence of the consent of the respondent.
The real issue, in my view, is whether, in submitting the copyrighted plan to the Town of Wolfville in support of a development proposal, the respondent consented to the use subsequently made of it within the meaning of s. 27(1) of the Act.
Absence of Consent
In a paper on copyright infringement given at a National Judicial Institute seminar on copyright law in Ottawa May 17-28, 1993, Hughes G. Richard discussed the absence of the consent referred to in s. 27(1) of the Act as follows:
Infringement depends on the absence of consent by the owner of the copyright, who is the only person, under Section 3(1) in fine of the Act, who can authorize acts which would otherwise constitute infringement. It must emanate from the owner himself of the particular right considered, or his legal representative.
Consent may be given under the form of licenses which could be characterized as the permission to do an act that would otherwise be an infringement of copyright. Licenses are either given voluntarily or compulsorily.
. . . Voluntary licenses may be expressed or implied, they may be verbal or in writing, with or without consideration.
Mr. Richard cited Bishop v. Stevens (1990), [1990] 2 S.C.R. 467 as authority for the first paragraph quoted above. McLachlin, J., stated at pp. 485:
As stated by H. G. Fox, in The Canadian Law of Copyright and Industrial Designs (2nd ed. 1967), at p. 339:
In order to constitute an infringement the act complained of must be done “without the consent of the owner of the copyright”. Such a consent may be presumed from the circumstances. The inference of consent must be clear before it will operate as a defence and must come from the person holding the particular right alleged to be infringed. [Emphasis added by McLachlin, J.]
The Respondent's Proposal
The infringement of copyright issue must, therefore, be considered in the context of the respondent's proposal for a development permit under the provisions of the Planning Act.
Each step in the process initiated by the proposal for a development permit involves the investment of time and effort by the applicant and the planning authority. As the various issues relating to development of the subject land are identified, the proposed developer must respond in some detail by providing drawings and other materials. There is a clear intention that these may be used as need be in considering the proposal and, on approval, incorporated in the formal documentation. There is no evidence that the respondent at any time prior to the approval of the development agreement attempted to limit its consent to the reasonable use of the plans and other materials. If it had not made the information available, it would have hamstrung the process, jeopardizing its hopes of having its proposal approved.
Therefore, in my view, it may be clearly inferred from the nature of the statutory process established by the Planning Act that a proposed developer who owns a copyright in materials submitted in the process consents to, or grants a voluntary license for, the reasonable and appropriate use by the town of any copyrighted materials he may provide.
A reasonable person would infer that the proposed developers must have contemplated from the outset that a development agreement running with the land would have to be in the name of Montykola, the property owner, and they must have provided their materials to the Town with that in mind. This would have created no problem but for the failure of the respondent and Dr. Hills to establish their right to purchase the property after development approval was obtained. The Town did exactly what the respondent had requested from the outset, and it had Mr. Sutherland’s consent, implied if not express, to incorporate the plan in the development agreement. A reasonable person would consider that, in submitting the plan in support of a proposal, the respondent consented to its use in the only document which could give effect to that proposal.
It was not the fault of Montykola, its signing officers, or the Town that the respondent and Dr. Hills had failed to secure a right to purchase the property before proceeding, perhaps because the principals involved were well known to one another.
In my view, therefore, no copyright infringement occurred when the Town of Wolfville prepared the original draft of the development agreement, approved subject to amendments at the meeting of October 16, 1989. From the outset, Mr. Sutherland consented to the Town’s use of his copyrighted plan to give effect to his own proposal. If it was not an infringement for the Town to produce a draft agreement containing the copyrighted material, it was not an infringement for Montykola to execute the agreement.
It was not open to Mr. Sutherland to withdraw his consent and claim infringement after the Town had lawfully acted on it, which it did when the agreement was approved on October 16, 1989. In any event, Mr. Sutherland did not make an attempt to withdraw his consent until after the X.H.H. proposal was approved by the Town Council on October 15, 1990.
Even if copies of the plan had not materialized, in my view the respondent's consent to the Town's use of the plan would have extended to reproducing it for copies of the development agreement, a purpose implied in the proposal. The trial judge specifically made no finding as to who had produced those copies. Mr. Sutherland denied that the essence of his complaint was that someone had submitted four copies of his plan to the Town of Wolfville which were attached to a development agreement. On cross-examination he explained the essence of his complaint as follows:
Okay. I'm saying somebody changed the Development Agreement that we had, that Wayne had, using my plans, changed it from Wayne Hills to another company, changed the document from, ah, Wayne Hills signed to Pat and Dean Corkum, used my plans strictly against my instructions to sign an agreement.
As mentioned above, this complaint was not open to Mr. Sutherland once he had entered into a process requiring his consent to use of his copyright in a development agreement affecting lands owned by Montykola, and had not withdrawn his consent prior to October 11, 1990. If Mr. Sutherland had a complaint, it was not infringement of his copyright.
The evidence did not establish that either Montykola or the Corkums had possession of or access to the plan, and I cannot agree that they infringed the copyright merely by executing a development agreement prepared by the Town with Mr. Sutherland’s implied consent. With respect, the trial judge was in error in finding that they did. There is no need to consider the personal liability of the signing officers.
The appellants are entitled to recover with interest the damages, interest and costs paid following the judgment at trial but, in the unusual circumstances, I would make no further order as to costs.
FREEMAN, J.A.
Concurred in:
Hallett, J.A.
Bateman, J.A.
C.A. No.121332
NOVA SCOTIA COURT OF APPEAL
BETWEEN:
MONTYKOLA INVESTMENTS INC., )
DEAN CORKUM, and )
PATRICIA CORKUM )
Appellants )
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- and - )
) REASONS FOR
) JUDGMENT BY:
ROBERT D. SUTHERLAND )
ARCHITECTS LIMITED ) FREEMAN, J.A.
Respondent )
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