2010 FC, 2010 FC 1315

Federal Court Cour fédérale Date: 20101221 Docket: T-746-09 Citation: 2010 FC 1315 Ottawa, Ontario , December 21, 2010 PRESENT: The Honourable Mr. Justice Phelan BETWEEN: CONCEPT DEVELOPMENTS LTD. Plaintiff and CHARLES WEBB and LORNA WEBB Defendants and HIGH GRADE HOMES INC. Third Party REASONS FOR ORDER AND ORDER I. INTRODUCTION [ 1 ] The Plaintiff has brought a motion for

summary judgment against the Defendants, Mr. and Mrs. Webb (Webbs), pursuant to Rule 213. The other Defendant, High Grade Homes Inc. (High Grade), has been released from the litigation for a payment of $25,000. II. BACKGROUND [ 2 ] The Plaintiff is the creator of home building designs and the builders of the homes it designs.

It has registered copyright in the plans for a bi-level home called the “Stratford Plan” and a building design for the same home called the “ Stratford Building ”. [ 3 ] The basic premise of the Plaintiff’s claim is that the Defendants Webb authorized High Grade to build a home which is substantially similar to the Stratford Building (with some minor modifications) and that High Grade built such a home.

The Plaintiff claims $124,000 for direct loss, which is essentially loss from not building the home – it being a requirement to use the Stratford Plan that Concept build the home – as well as an amount of $40,000 for intangible loss. The Plaintiff also seeks exemplary/punitive damages.

[4] While not all the facts have been established, what can be accepted for purposes of this motion is that the Webbs saw amodel Stratford home, disliked Concept’s quoted price to build the home and subsequently took their business to High Grade, anotherhome building company. The Webbs showed High Grade the Stratford Plan and informed High Grade that they wanted somethingsimilar to what was in the plan, albeit with some modifications. The Webbs drew up what they wanted and gave that drawing to HighGrade.

Whether High Grade gave any assurance to the Webbs that their design would not infringe the Plaintiff’s copyright is less clear. [5] There is little doubt that at this time, there is significant dispute as to who did what in relation to ensuring non-infringement.Therefore, there is also significant dispute as to who may be liable and for what.

The history of the plans, the ebb and flow of ideasbetween the parties, and the ultimate amalgam of ideas are important facts to be determined prior to any conclusions being reached as towho actually committed any act of infringement. [6] There is a threshold issue of whether the Webbs’ plans and the house which was actually built infringed copyright. A keyaspect of that issue is whether any differences between the Webbs’ plan and the Stratford Plan are significant. [7] The other critical issue is whether the Webbs authorized infringement.

The Plaintiff claims that knowledge of theinfringement is immaterial so long as there is infringement. Even if the Plaintiff was correct that fore knowledge is irrelevant, the degreeand nature of such knowledge is an important factor in assessing the remedies available. [8] The Plaintiff acknowledged in argument that its proposition, that a builder whose copyright is infringed becomes entitled toloss of profits, is a novel one. The Plaintiff extends the line of authority called the “architects cases” to include designer/builders. III.

ANALYSIS [9] The legal issue on this motion is whether the Defendants’ case is so flawed that it does not deserve consideration by a court.The onus on the Plaintiff to establish such a condition is high. [10] In Society of Composers, Authors and Music Publishers of Canada v. Maple Leaf Sports & Entertainment, 2010 FC 731, theCourt summarized the applicable principles on this type of motion at paragraphs 14-16: 14 The

summary judgment, and now

summary trial, procedures are important tools for a court to control its case load. Particularlywith respect to

summary judgments, the Supreme Court of Canada has confirmed its importance in the administration of justice. ... The

summary judgment rule serves an important purpose in the civil litigation system. It prevents claims or defences that have nochance of success from proceeding to trial. Trying unmeritorious claims imposes a heavy price in terms of time and cost on the parties tothe litigation and on the justice system. It is essential to the proper operation of the justice system and beneficial to the parties that claimsthat have no chance of success be weeded out at an early stage. Conversely, it is essential to justice that claims disclosing real issues thatmay be successful proceed to trial. Canada (Attorney General) v. Lameman, 2008 SCC 14, para. 10 15 However, these

summary procedures have their limits. Trials are the ways by which true disputes are resolved. People have a rightto their day in court to deal with legitimate claims. Courts must be mindful that the effect of a

summary judgment motion can deprive aparty of that right. 16 In Granville Shipping Co. v. Pegasus Lines Ltd. (T.D.), (FC), [1996] 2 F.C. 853, this Court outlined the generalprinciples applicable to

summary judgments. 8 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 isno genuine issue to be tried (Old Fish Market Restaurants Ltd. v. 1000357 Ontario Inc. et al, [1994] F.C.J. No. 1631); 2. there is no determinative test (Feoso Oil Ltd. v. Sarla (The), [1995] F.C.J. No. 866) but Stone J.A. seems to have adopted the reasonsof Henry J. in Pizza Pizza Ltd. v. Gillespie, (ON SC), [1990] O.J. No. 2011.

It is not whether a party cannot possiblysucceed 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, [1994] F.C.J. No. 560, and Feoso); 4. provincial practice rules (especially Rule 20 of the Ontario Rules of Civil Procedure, [R.R.O. 1990, Reg. 194]) can aid ininterpretation (Feoso and Collie, [1996] F.C.J. No. 193); 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 theCourt (this is broader than Rule 20 of the Ontario Rules of Civil Procedure) (Patrick, [1994] F.C.J. NO. 1216); 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 todo so (Pallman, [1995] F.C.J. NO. 898, and Sears, [1996] F.C.J. No. 51); 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 beforethe trial judge (Forde, [1995] F.C.J. No. 48, and Sears). The mere existence of apparent conflict in the evidence does not precludesummary judgment; the court should take a "hard look" at the merits and decide if there are issues of credibility to be resolved (Stokes,[1995] F.C.J. No. 1547). [Emphasis added] [11] The Plaintiff’s motion must fail for a number of reasons: (

a) the necessary facts cannot be found at this stage. The question of actual infringement and that of how substantial the Webbs’changes to the Stratford Plan were cannot be determined on the evidence. The issue of substantial change or whether the Webbs’ planwas substantially similar to the Stratford Plan is one of fact and degree best left to a trial judge in this case. (

b) there are serious issues of credibility including the Webbs’ explanation, the role of High Grade, whether any assurances of non-infringement were made and exactly who actually infringed. (

c) the question of “authorization” is both legally and factually complex. It is best described in CCH Canadian Ltd. v. Law Society ofUpper Canada, 2004 SCC 13 , [2004] 1 S.C.R. 339 at paragraph 38: 38 "Authorize" means to "sanction, approve and countenance": Muzak Corp. v. Composers, Authors and Publishers Association ofCanada, Ltd., (SCC), [1953] 2 S.C.R. 182, at p. 193; De Tervagne v. Beloeil (Town), (FC), [1993] 3F.C. 227 (T.D.).

Countenance in the context of authorizing copyright infringement must be understood in its strongest dictionarymeaning, namely, "[g]ive approval to; sanction, permit; favour, encourage": see The New Shorter Oxford English Dictionary (1993), vol.1, at p. 526. Authorization is a question of fact that depends on the circumstances of each particular case and can be inferred from actsthat are less than direct and positive, including a sufficient degree of indifference: … These are determinations best left to a trial judge to weigh in the context of all of the evidence. (

d) the measure of damages is not established. The invocation of a novel proposition for damages is but one factor which indicatesthat this issue is deserving of a trial. Any exemplary damages require a complete factual matrix; a separate trial of the damages issuewould not be an efficient use of court resources as it would entail much of the liability evidence. [12] Therefore, this motion will be denied with costs to the Defendants Webb at the usual scale.

ORDER THIS COURT ORDERS that the motion is denied with costs to the Defendants Webb at the usual scale. “Michael L. Phelan” Judge FEDERAL COURT SOLICITORS OF RECORD DOCKET: T-746-09 STYLE OF CAUSE: CONCEPT DEVELOPMENTS LTD. and CHARLES WEBB and LORNA WEBB and HIGH GRADE HOMES INC. PLACE OF HEARING: Edmonton, Alberta DATE OF HEARING: December 16, 2010 REASONS FOR JUDGMENT AND JUDGMENT: Phelan J. DATED: December 21, 2010

APPEARANCES : Mr. Anthony Lambert FOR THE PLAINTIFF Mr. G. Bruce Comba FOR THE DEFENDANTS, CHARLES WEBB and LORNA WEBB SOLICITORS OF RECORD : LAMBERT INTELLECTUAL PROPERTY LAW Edmonton , Alberta FOR THE PLAINTIFF EMERY JAMIESON LLP Barristers & Solicitors Edmonton, Alberta FOR THE DEFENDANTS, CHARLES WEBB and LORNA WEBB