ONTARIO

SUPERIOR COURT OF JUSTICE

Court File No.: CV-13-021
Date: 2014-09-08

B E T W E E N:

DEBRA WANLESS

Richard Nishimura, for the plaintiff

Plaintiff

and -

MAYFAIR MUSIC PUBLICATIONS INC. and STEVEN LOWETH

Stephen Panzer, for the defendants

Defendants

HEARD: August 1, 2014

ENDORSEMENT

André J.

[1] Ms. Wanless brings a motion to transfer her action to another jurisdiction and to amend her statement of claim as a result of information disclosed by Mr. Steven Loweth during examinations for discovery on April 28, 2014. Mr. Loweth opposes the motion primarily on the two grounds that he would be prejudiced by the proposed amendment and that Ms. Wanless is statute barred from commencing her action against the defendants.

[2] For the reasons indicated, Ms. Wanless’ motion is granted.

BACKGROUND

[3] Ms. Wanless, a music editor and composer, deposes that she entered into a verbal agreement with John Loweth, the defendant’s father, to produce printed music to be sold by Mayfair Music Publications Inc. As a result, from 2002 to 2012, she produced approximately 100 titled works for the corporate defendant.

[4] Ms. Wanless terminated the contract in August 2012. She alleges that the defendants have continued to sell her titled works without providing her with any accounting or payment of royalties.

[5] Mr. Steven Loweth disclosed during examinations for discovery that JAL Holdings Inc., through its subsidiary, Mayfair Montgomery Publishing, claims ownership of some of the titles which the defendants continue to sell to the public. Furthermore, Mr. Loweth disclosed that an unincorporated entity, Music From Canada, sells the publications of JAL, Mayfair Montgomery and Mayfair Music Publications.

[6] The plaintiff therefore seeks to add these companies as defendants in her action. She also seeks to make corrections to the titles of the works which she claims were misappropriated by the defendants and to include others not previously mentioned.

DEFENDANTS POSITION

[7] Mr. Steven Loweth is not opposed to the transfer of the action to Toronto or Newmarket. He opposes Ms. Wanless’ motion to amend her statement of claim on the following grounds:

The plaintiff knew about the alleged breach of contract a decade ago and is statute barred from commencing this action, let alone seeking to amend her statement of claim.
Mr. Loweth does not control any of the companies which Ms. Wanless seeks leave to include as defendants in her action.
He would be prejudiced if Ms. Wanless is granted leave to amend her claim.
It is pointless to grant Ms. Wanless’ motion given that pursuant to s. 13(4) of the Copyright Act, R.S.C. 1985, c. C-42, the oral agreement between herself and John Loweth is invalid.
The attempt to seek punitive damages of $200,000 by Ms. Wanless should be struck given that no particulars have been pleaded.
Where the effect of an amendment is the withdrawal of an admission, rule 51.05 applies.
Some of the proposed amendments are so vague and broad that the motion should be denied.

ANALYSIS

[8] On a motion at any stage of an action, the court shall grant leave to amend a pleading on such terms that are just, unless prejudice would result that could not be compensated for by costs or an adjournment. (Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990 Reg. 194, R. 16.04).

[9] The following facts must be considered when determining whether to grant an amendment of the pleadings:

(a) An amendment should be allowed unless it would cause an injustice not compensable in costs.

(b) The proposed amendments must be shown to be issues worthy of trial and prima facie meritorious.

(d) The proposed amendment must contain sufficient particulars.

(Marks v. Ottawa (City), 2011 ONCA 248, at para. 19).

[10] An amendment under Rule 26.01 should be made as long as a pleading amendment can be made without causing injustice to the other party (Golic v. ING Insurance of Canada, 2008 69502 (ONSC), affirmed 2009 ONCA 836).

[11] Examples of prejudice that could not be compensable by costs include the death of a material witness or from the destruction of files (Kings Gate Developments Inc. v. Colangelo 1999 416 (ONCA)).

Is the plaintiff statute barred from seeking to amend her Statement of Claim?

[12] Mr. Steven Loweth submits that the motion should be denied because the plaintiff knew of the breach of contract almost ten years ago.

[13] I disagree. The alleged cause of action arose after August 2012, when the plaintiff terminated her agreement with the defendants. Only then did she find out that the defendants were continuing to sell her music without attribution or compensation.

Is there any evidence that Mr. Loweth controlled the companies which the plaintiff seeks to add as defendants to her claim?

[14] The defendant opposes the proposed amendments relating to the addition of the other corporate defendants in her statement of claim because he does not control these companies.

[15] However, Mr. Loweth’s own affidavit indicates that he is a director of the corporation named JAL Holdings Inc. He also pleaded in his statement of defence that he is the President of Mayfair Music Publications. The fact that Mr. Loweth disputes the plaintiff’s contention that he controls all three companies is not a basis to deny the request for an amendment to the pleadings.

Would Mr. Loweth be prejudiced if the motion to amend is granted?

[16] Mr. Loweth further submits that he would be prejudiced by the proposed amendments given that John Loweth, with whom the plaintiff had an oral agreement, has died.

[17] Mr. John Loweth died in 2009, years prior to the commencement of Ms. Wanless’ action against the defendants. Pre-existing prejudice unconnected to the proposed amendments will be insufficient to deny a motion under Rule 26.01 (Iroquois Falls Power Corp. v. Jacobs Canada Inc. 2009 ONCA 517, [2009] O.J. No. 2642 (ONCA)). Amending the action to include the corporations as defendants will not have any prejudicial effect on Mr. Steven Loweth, the more so given his contention that he does not control these companies.

Should the motion to amend be denied because Ms. Wanless’ contract with John Loweth was invalid?

[18] Counsel for Mr. Loweth contends that it is pointless to grant Ms. Wanless’ motion to amend her statement of claim, given that, by virtue of section 13(4) of the Copyright Act (“the Act”), the agreement between Ms. Wanless and the late John Loweth had to be in writing in order to be valid.

[19] I disagree. Section 13(4) of the Act indicates that any assignment of a copyright must be in writing to be valid. The section does not state that an agreement between two persons in which one gives the other the right to sell copyrighted material must be in writing. To that extent, Ms. Wanless’ oral contract with John Loweth is not invalid.

Should the plaintiff’s claim for punitive damages be denied because no particulars have been pleaded?

[20] Counsel for the defendants relies on the case of Corvaro v. Canadian Memorial Chiropractic College, 2005 18871 (ONSC), paras. 30-31, for the proposition that since a claim for punitive damages involves allegations of malice, intent or breach of trust, such allegations must be pleaded with full particulars. He submits that the plaintiff’s failure to provide particulars is fatal to her motion for leave to amend her statement of claim.

[21] The Corvaro case, however, is distinguishable from the case at bar. It involved a Rule 21.01 motion to strike pleadings for disclosing no reasonable cause of action. The case involved a medical malpractice claim against a chiropractic college and its senior administrators who did not treat the plaintiff and were unaware of the treatment received by the plaintiff at an on-site clinic. The claim for damages had no factual basis, and was unconnected to any facts related to an alleged breach of contract, negligence or breach of fiduciary duty.

[22] In this case, Ms. Wanless has pleaded facts related to an alleged breach of contract, unauthorized use of her creative works and the defendants’ failure to compensate her for selling her copyrighted works. To the extent that the amendment relates to the remedy sought upon facts already pleaded, the plaintiff’s motion should be granted (Canadian Industries Ltd. v. Canadian National Railway Co., 1940 346 (ON CA), [1940] O.J. No. 266 (C.A.), affd. 1941 16 (SCC), [1941] S.C.R. 591).

Does Rule 51.05 apply in this motion?

[23] The rule provides that an admission made in response to a request to admit, a deemed admission under rule 51.03, or an admission in a pleading, may be withdrawn on consent or with leave of the court.

[24] Mr. Loweth contends that Ms. Wanless initially indicated that she only found out that Mr. Loweth owned or controlled JAL Holdings Inc. and Mayfair Montgomery Publishing during examinations for discovery in April, 2014. Mr. Loweth admitted this fact in his statement of defence. However, in her supplementary affidavit dated July 10, 2014, Ms. Wanless deposed that John Loweth owned and managed all of those entities and that she understood that when he made representations to her, he was binding all of his companies that were relevant to the representations.

[25] First, in my view, the effect of the amendment sought by Ms. Wanless does not amount to a withdrawal of an admission and accordingly, Rule 51.05 does not apply. Indeed, there is no reference to JAL Holdings Inc. and Mayfair Montgomery Publishing in Mr. Loweth’s statement of defence. Second, the basis for the proposed amendment is that Ms. Wanless first discovered that the two companies were claiming ownership of some of her music during the examination for discovery. Her supplementary affidavit does not contradict that assertion.

Should the motion be denied because of the vagueness of some of the proposed amendments?

[26] Mr. Loweth submits that clauses 1(b), 1(c) and 1(f) of the amended statement of claim are simply too broad and vague.

[27] Clause 1 provides that:

The Plaintiff claims from the Defendants, individually, and collectively, jointly and severally, the following:

a) A Declaration that the copyright in the published works of musical composition listed in Schedule “A” is owned exclusively by the Plaintiff.

b) A Declaration of the Plaintiff’s moral rights of authorship in the works in Schedule “A”, and of all works she authored that are published by the Defendants.

c) An Order awarding monetary damages to compensate the Plaintiff for her losses of income, losses of royalty, and other forms of economic damage inflicted by the actions of the Defendants for the sale, use, or transfer of the Plaintiff’s Schedule “A” works from August 3, 2012 onward, and for the violation of her moral rights, to be particularized and provided at or prior to trial.

f) A mandatory order directing that the Defendants, individually or collectively ~~or either one of them~~:

a. Remove any attribution of copyright from the Schedule “A” works other than that attributed to Wanless, and

b. Restore any attribution of Wanless’ authorship to the Schedule “A” works, and any other works she authored, as it appeared when originally published.

[28] The plaintiff has withdrawn the proposed amendments in clauses 1(b) and 1(f).

[29] The defendant maintains that the proposed amendment in 1(c) should be struck given the plaintiff’s failure to define “moral rights”.

[30] In Théberge v. Galerie D’Art Du Petit Champlain Inc., 2002 SCC 34, [2002] 2 S.C.R. 336, at para. 15, the Supreme Court of Canada noted that:

Moral rights, by contrast, descend from the civil law tradition. They adopt a more elevated and less dollars and cents view of the relationship between an artist and his or her work. They treat the artist’s oeuvre as an extension of his or her personality, possessing a dignity which is deserving of protection. They focus on the artist’s right…to protect throughout the duration of the economic rights (even where these have been assigned elsewhere) both the integrity of the work and his or her authorship of it (or anonymity, as the author wishes).

[31] This passage provides a clear definition of the term “moral rights”. In my view, this proposed amendment to Ms. Wanless’ statement of claim should be allowed.

Orders

[32] Based on the above, I order that:

This action shall be transferred to Newmarket or Toronto.
Ms. Wanless’ motion to amend her statement of claim is granted save and except the following:

i) The proposed amendments in paragraph 1(b) and 1(f) of the amended Statement of Claim attached as Schedule “A” to the supplementary affidavit of the plaintiff are disallowed.

ii) The reference in paragraph 22A of the amended Statement of Claim attached as Schedule “A” to the supplementary affidavit of Ms. Wanless, to “17B” is amended to read “21B”.

Ms. Wanless shall deliver her amended Statement of Claim within twenty days of the date of this endorsement.
Mr. Loweth and the corporate defendants shall have twenty days thereafter to deliver an amended Statement of Defence.

COSTS

[33] Ms. Wanless seeks costs of $7,000 on a full indemnity basis while Mr. Steven Loweth seeks costs of $8,940.04 on a similar basis.

[34] In determining what quantum of costs is fair and reasonable in this matter, I consider the following factors:

The plaintiff was substantially successful in this motion.
The plaintiff’s counsel was called to the bar in 2004 and his hourly rate of $225 is not unreasonable.
While this matter was not a complex one, it required a significant deal of preparation.
Mr. Loweth’s counsel failed to respond to three letters from Ms. Wanless’ counsel regarding his position on the plaintiff’s motion.

[35] Based on the above, costs to the plaintiff are fixed at $5,000 inclusive of disbursements and applicable taxes.