2017 ONSC 223, 2017 ONSC 223

CITATION: Canadian Private Copying Collective v. Redpact Impex Inc., 2017 ONSC 223 DIVISIONAL COURT FILE NO.: 520/16 DATE: 20170111 SUPERIOR COURT OF JUSTICE – ONTARIO RE: CANADIAN PRIVATE COPYING COLLECTIVE, Plaintiff/Moving Party - and - redpact impex inc. et al., Defendants BEFORE: Swinton J.

COUNSEL: Randy Sutton and Stephen Taylor, for the Plaintiff/Moving Party HEARD at Toronto: in writing ENDORSEMENT [1] The plaintiff seeks leave to appeal the order of Wilton-Siegel J. dated October 12, 2016 in which he dismissed a motion fordefault judgment brought against defendants Brian Vincent Ku and 2260582 Ontario Inc. As these two defendants have been noted indefault, they were not served with this motion for leave to appeal. [2] The motions judge, in a brief endorsement, concluded that a trial should be held because the plaintiff sought to pierce thecorporate veil on the basis of fraud alleged against Mr.

Ku, and evidence should be presented to show the compact disks sold by thedefendants were blank. [3] In my view, there is good reason to doubt the correctness of the decision. On a motion for default judgment, the defendantswho have been noted in default are deemed to have admitted the truth of the factual allegations in the Statement of Claim (rule19.02(1)). Pursuant to rule 19.06, the facts must entitle the plaintiff to judgment.

In the present case, the motions judge did not addressthe allegations in the Statement of Claim, which are summarized in paragraph 21 of the plaintiff’s factum, nor did he refer to the affidavitevidence filed. Even if he was concerned about the piercing of the corporate veil, he did not consider whether the facts alleged in theStatement of Claim were sufficient to establish corporate liability under the Copyright Act or the corporate and individual liability forconspiracy. Moreover, he did not explain why the facts alleged did not support a finding of liability against Mr.

Ku based on the doctrineof piercing the corporate veil. [4] With respect to damages, the motions judge wanted confirmatory evidence that the disks were blank, even though there weredeemed admissions that the disks were blank. Given the admission with respect to the quantum of disks imported, the damages seemcapable of calculation based on the legislation, the tariff and the affidavit evidence. [5] The approach of the motions judge, particularly on liability, appears to be in conflict with the jurisprudence – see, forexample, Umlauf v.

Umlauf (2001), (ON CA), 53 O.R. (3d) 355 (C.A.). [6] The second part of the test for leave requires a determination as to whether the proposed appeal raises matters of suchimportance that leave should be granted. I am satisfied that this branch of the test is met. The decision appears to depart from thejurisprudence on rule 19, and it would be useful to have an appellate court consider whether a plaintiff is required to prove its allegationsrespecting liability in default proceedings. [7] Accordingly, leave to appeal is granted on the issue whether the motions judge erred in failing to grant default judgment.

The plaintiff did not seek costs in its factum. ___________________________ Swinton J. Date: January 11, 2017