Maier Estate v. Bulger, 2024 FC 183

Date: 20240205

Docket: T-953-17

Citation: 2024 FC 183

Toronto, Ontario, February 5, 2024

PRESENT: The Honourable Madam Justice Furlanetto

BETWEEN:

THE ESTATE OF VIVIAN MAIER

Plaintiff

and

STEPHEN M. BULGER AND STEPHEN M. BULGER PHOTOGRAPHY GALLERY INC.

Defendants

ORDER AND REASONS

I. Background

[1] This is a motion for reply evidence relating to an action for copyright infringement in respect of photographs and other alleged works created by the late Vivian Maier. The Defendants are alleged to be participants in a scheme to shelter and traffic a collection of the alleged works across international borders. Through these actions, the Defendants are alleged to have infringed and to have authorized infringement of copyright through unauthorized reproduction, exhibition, and commercial trafficking (including import, export, offering for sale and selling). The Defendants deny these allegations and raise a number of defences to the alleged infringement.

[2] As its evidence in chief, the Plaintiff filed, inter alia, an expert report from Mr. Christopher Gaillard, who is described as an expert in fine art appraisal [First Report]. Mr. Gaillard was asked to appraise the items sold by the Defendant, Stephen M. Bulger Photography Gallery Inc. [Bulger Gallery], to a European art dealer, namely a collection of over 15,000 negatives and a portable hard drive containing scanned copies of the negatives, and to explain how the portable hard drive could be used to market and sell the photographic prints developed from the negatives.

[3] The Defendants responded to the Plaintiff’s evidence by filing, inter alia, an expert report from Ms. Kelly Juhasz, who is a professional appraiser and advisor in fine art and archival collections [Juhasz Report]. Amongst other questions, Ms. Juhasz was asked to provide an appraisal review of Mr. Gaillard’s expert report, including whether it was an appraisal report that met industry standards. She was asked whether it is possible to appraise photographic negatives and if so, to provide an overview of the market for photographic negatives. She was also asked to explain the potential uses and how to value an external hard drive containing digital images of negatives.

[4] On this motion, the Plaintiff seeks to file a reply report from Mr. Gaillard in which he proposes to:

• (a) Respond to Ms. Juhasz’ assertion that his evidence “lacks creditability [sic] and reasonableness” because it does not comply with Uniform Standards of Professional Appraisal Practice [USPAP];
• (b) Respond toMs. Juhasz’ interpretation of what Mr. Gaillard implied by referring to photographic negatives as “ephemera” ;
• (c) Respond to Ms. Juhasz’ overview of the market for photographic negatives; and
• (d) Respond to Ms. Juhasz’ characterizations of certain aspects of Mr. Gaillard’s discussion pertaining to a “hard drive” .

[5] The Plaintiff asserts that the proposed reply should be permitted as it seeks to: 1) clear up mischaracterizations or misunderstandings of his evidence that are relied upon by Ms. Juhasz; and 2) respond to new and unanticipated evidence from Ms. Juhasz on the market for photographic negatives.

[6] The principles governing the admissibility of reply evidence are not disputed and can be summarized as follows:

1. Evidence which is simply confirmatory of evidence already before the court is not to be allowed;

2. Evidence ... which ought to have been part of the plaintiff’s case in chief is not to be allowed. Any other new matter relevant to a matter in issue, and not simply for the purpose of contradicting a defence witness, may be allowed;

3. Evidence which is simply a rebuttal of evidence led as part of the defence case and which could have been led in chief is not to be admitted; and

4. Evidence which is excluded because it should have been led as part of the plaintiff’s case in chief will be examined to determine if it should be admitted in the exercise of the trial judge’s discretion.

(Janssen Inc v Teva Canada Limited, 2019 FC 1309 at para 16, citing Halford v Seed Hawk Inc, 2003 FCT 141 at para 15; Takeda Canada Inc v Apotex Inc, 2023 FC 1353 [Takeda] at para 9)

[7] The Court will consider whether the proposed reply: will serve the interests of justice; will assist the Court to adjudicate an issue on the merits; will not cause serious prejudice to the other side; and, was available and/or could not be anticipated as being relevant at an earlier stage of the proceeding: Merck-Frosst v Canada (Health), 2009 FC 914 [Merck-Frosst] at para 10; Takeda at para 10.

[8] This assessment was described in Merck-Frosst at paragraphs 23-25 as requiring a two-step analysis. First, the Court must ask whether the proposed evidence is properly responsive to the other party’s evidence and if it is more than a mere statement of counter-opinion, but provides evidence that critiques, rebuts, challenges, refutes, or disproves the opposite party’s evidence. It will not be properly responsive if it simply repeats or reinforces evidence already given. Second, if the proposed reply evidence is responsive, then the Court must consider whether its relevance could have been anticipated at an earlier date.

II. Analysis

A. Appraisal compliance with USPAP − Paragraphs 5-7

[9] The Juhasz Report asserts that the appraisal completed by Mr. Gaillard in his First Report does not comply with the USPAP for personal property appraisal, as it does not express the appraisal as a numerically specific amount nor provide an opinion of a recognized value. Ms. Juhasz asserts that the appraisal therefore lacks credibility and reasonableness.

[10] In his proposed reply, Mr. Gaillard takes issue with this criticism. He proposes to state that his report was not intended to be a formal art appraisal or personal property appraisal subject to the USPAP by re-emphasizing conclusions made in his First Report in an effort to explain why he could not conduct a fine art appraisal.

[11] While the Plaintiff asserts that paragraphs 5 to 7 seek to correct a mischaracterization made by Ms. Juhasz of his evidence, in my view these paragraphs do not overcome the first part of the Merck-Frosst analysis. I agree with the Defendants, the proposed evidence merely reinforces evidence already given and seeks to enlarge that evidence in an effort to rebut the observations made by Ms. Juhasz.

[12] As Mr. Gaillard was tasked with conducting an appraisal, it is my view that any explanation as to why that appraisal was not done according to the USPAP should have been made in his First Report. The proposed paragraphs 5 to 7 are not proper reply.

B. Reference to Photographic Negatives as “ephemera” – Paragraphs 8-12

[13] In his First Report at paragraph 32, Mr. Gaillard opined that:

...the negatives sold to FAIG are of limited value to FAIG if it does not also own the rights to (re)produce the photographs of the negatives. Without the copyrights in the works themselves, the negatives are mere ephemera; they may have some archival value, but they are valueless as the tools necessary to (re)produce the photographs.

[14] At paragraph 34 of her response, Ms. Juhasz states that by describing the photographic negatives as mere ephemera without copyright, Mr. Gaillard is implying that they are “destined to be discarded”. She goes on to state in paragraph 35 that “photographers do not typically throw away their negatives.”

[15] In his proposed reply, Mr. Gaillard states his disagreement with the implication inferred by Ms. Juhasz that the negatives are “destined to be discarded”. He asserts that she has taken his evidence out of context. At paragraphs 8 to 11, Mr. Gaillard seeks to clarify that it is not his opinion that the negatives are “destined to be discarded” and to explain his use of the term “ephemera”. With the exception of Mr. Gaillard’s statement of disagreement, in this limited respect, I consider Mr. Gaillard’s clarification in paragraphs 8 to 11 to be helpful to the Court. However, in my view, paragraph 12 goes too far and extends beyond the clarification to state a separate opinion as to why Mr. Gaillard disagrees with Ms. Juhasz’ characterization.

[16] While I agree that paragraphs 8, 9 (except for the words “disagree with Ms. Juhasz’ suggestion and”), 10 and 11 are properly responsive to clear up the perceived mischaracterization; in my view, the noted words from paragraph 9 and paragraph 12 should not be permitted: Merck Sharpe & Dohme Corp v Pharmascience Inc, 2021 FC 1456 at paras 32-33. The words from paragraph 9 and paragraph 12 go beyond the clarification and seeks to repeat opinions given in Mr. Gaillard’s First Report as a means to show disagreement with the opinion of Ms. Juhasz. As such, they are not proper reply.

C. Response to Ms. Juhasz’ overview of the market for photographic negatives – Paragraphs 13-36

[17] At paragraph 41 of her report, Ms. Juhasz states that it is possible to appraise the value of photographic negatives. “To illustrate that there is an active marketplace for the sale of photographic negatives”, she appends as Exhibit KJ-008 to her report what she describes as “a chart showing examples of the sale of negatives in the marketplace occurring since 2016” (paragraph 42). She describes the purpose of referring to these examples at paragraph 43 of her report, noting that the examples can act “as comparable market data on which to base an appraisal”:

My purpose in showing these past sales is to call attention to the focus of the listings and the market. There is no standard sale listing for negatives. Each example highlights the negatives as the items being purchased. Two of the listings state that copyright is included in the sale whereas one example states that it is not. The artist retains copyright in one sale and two examples do not mention copyright. All the auction lots found buyers except one. This chart provides a window into the market for the sale of negatives as the primary item being traded with or without copyright. These past sales records could act as comparable market data on which to base an appraisal and provide a defined value.

[18] At paragraphs 13 to 36 of his proposed reply, Mr. Gaillard reviews the examples identified by Ms. Juhasz and explains why he does not consider the examples to be a suitable comparison to the materials at issue, or to provide guidance for an appraiser tasked with appraising the collection of negatives sold by the Bulger Gallery.

[19] While the Defendants argue that the evidence from Mr. Gaillard is improper case splitting and is not responsive, I do not agree. The evidence proposed directly responds to the assertion by Ms. Juhasz that the examples can act as comparable market data on which to base an appraisal and provide a defined value. Further, the introduction of these examples for the first time in Ms. Juhasz’ report was not something that could have been anticipated by Mr. Gaillard. As the examples are considered to be distinguishable by Mr. Gaillard, they are also not something that he reasonably would have introduced in his First Report.

[20] The fact that the proposed evidence spans twenty-four paragraphs is not a basis for refusal. The reply proposed provides helpful context for the examples referenced by Ms. Juhasz and is properly responsive to this new evidence.

[21] In my view, paragraphs 13 to 36 are proper reply and should be allowed.

D. Comments about the hard drive – Paragraphs 37-44

[22] At paragraphs 37 to 39 of his proposed reply, Mr. Gaillard seeks to comment on two statements made by Ms. Juhasz. First, at her paragraph 36, Ms. Juhasz states: “Mr. Gaillard is incorrect when he implies that the hard drive is more important than the negatives”. Second, at her paragraph 32, Ms. Juhasz asserts that “Mr. Gaillard contradicts himself when he states that the hard drive serves to increase the price for the negatives ... but then also states further in his report that the negatives are of “limited value” and are “valueless”.”

[23] Mr. Gaillard asserts that his evidence does not imply the first statement. He seeks to explain through reference to his evidence why there is no such suggested implication. In this limited respect, I find the proposed reply at paragraphs 37, 38 and the first two sentences of paragraph 39 to be helpful to the Court and that it should be permitted to allow Mr. Gaillard to address the perceived mischaracterization of his evidence.

[24] However, with respect to the latter part of paragraph 39, I find that this additional reply is nothing more than a repetition and expansion of evidence from Mr. Gaillard’s First Report in an effort to rebut and disagree with the second statement of Ms. Juhasz. Indeed, Mr. Gaillard concludes paragraph 39 by expressly stating that he accordingly disagrees with Ms. Juhasz’ view that his opinion is contradictory. As such, the last five sentences of paragraph 39 are not allowed.

[25] At paragraphs 40 to 44 of the proposed reply, Mr. Gaillard seeks to respond to Ms. Juhasz’ comments on his use of the term “catalogue raisonné” in his First Report. He asserts that her criticism is unwarranted and that she has taken his comments out of context.

[26] Unlike the clarifications discussed earlier, in my view, the additional comments made in paragraphs 40 to 44 are not a clarification of any misinterpretation made by Ms. Juhasz, or with the definition of “catalogue raisonné” that she has given. Rather, the proposed reply is a rebuttal of Ms. Juhasz’ criticism and an attempt by Mr. Gaillard to expand on why he used the term “catalogue raisonné” when such explanation could have been given in his First Report. As such, I do not consider paragraphs 40 to 44 to be proper reply.

[27] For all of these reasons, the motion is allowed in part, as set out in the accompanying order.

[28] As success was divided, there shall be no order as to costs.

ORDER IN T-953-17

THIS COURT ORDERS that:

1. The motion is granted in part and the Plaintiff shall be permitted to tender the reply evidence of Mr. Gaillard with the following paragraphs included: paragraphs 1-4, 8, 9 (except for the words “disagree with Ms. Juhasz’ suggestion and”), 10, 11, 13-38, and 39 (first two sentences).

2. There shall be no order as to costs.

"Angela Furlanetto"

Judge

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:

T-953-17

STYLE OF CAUSE:

THE ESTATE OF VIVIAN MAIER v STEPHEN M. BULGER AND STEPHEN M. BULGER PHOTOGRAPHY GALLERY INC.

MOTION IN WRITING CONSIDERED AT OTTAWA, ONTARIO PURSUANT TO RULE 369 OF THE FEDERAL COURTS RULES

order and REASONS::

FURLANETTO J.

DATED:

FEBRUARY 5, 2024

WRITTEN REPRESENTATIONS BY:

Mark Biernacki

Graham Hood

Ryan T. Evans

For The Plaintiff

Sana Hawani

Margaret Robbins

Alexis Vaughan

For The Defendants

SOLICITORS OF RECORD:

Smart & Biggar LLP

Barristers and Solicitors

Toronto, Ontario

For The Plaintiff

Lenczner Slaght LLP

Barristers and Solicitors

Toronto, Ontario

For The Defendants