Court File and Parties

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

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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 for default judgment brought against defendants Brian Vincent Ku and 2260582 Ontario Inc. As these two defendants have been noted in default, 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 the corporate veil on the basis of fraud alleged against Mr. Ku, and evidence should be presented to show the compact disks sold by the defendants were blank.

[3] In my view, there is good reason to doubt the correctness of the decision. On a motion for default judgment, the defendants who have been noted in default are deemed to have admitted the truth of the factual allegations in the Statement of Claim (rule 19.02(1)). Pursuant to rule 19.06, the facts must entitle the plaintiff to judgment. In the present case, the motions judge did not address the allegations in the Statement of Claim, which are summarized in paragraph 21 of the plaintiff’s factum, nor did he refer to the affidavit evidence filed. Even if he was concerned about the piercing of the corporate veil, he did not consider whether the facts alleged in the Statement of Claim were sufficient to establish corporate liability under the Copyright Act or the corporate and individual liability for conspiracy. Moreover, he did not explain why the facts alleged did not support a finding of liability against Mr. Ku based on the doctrine of piercing the corporate veil.

[4] With respect to damages, the motions judge wanted confirmatory evidence that the disks were blank, even though there were deemed admissions that the disks were blank. Given the admission with respect to the quantum of disks imported, the damages seem capable 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, for example, Umlauf v. Umlauf (2001), 2001 24068 (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 such importance that leave should be granted. I am satisfied that this branch of the test is met. The decision appears to depart from the jurisprudence on rule 19, and it would be useful to have an appellate court consider whether a plaintiff is required to prove its allegations respecting 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