BETWEEN:
9038-3746 QUEBEC INC., 9014-5731 QUEBEC INC.,
ADAM CERELLI, CARMELO CERRELLI
and
Dealt with in writing without appearance of parties.
Order delivered at Ottawa, Ontario, on February 20, 2007.
REASONS FOR ORDER BY: LÉTOURNEAU J.A.
Docket: A-44-07
Citation: 2007 FCA 76
Present: LÉTOURNEAU J.A.
BETWEEN:
9038-3746 QUEBEC INC., 9014-5731 QUEBEC INC.,
ADAM CERELLI, CARMELO CERRELLI
Appellants
and
MICROSOFT CORPORATION
Respondent
REASONS FOR ORDER
[1] The four appellants make a motion in writing under Rule 369 of the Federal Courts Rules for a stay of the order as well as the amended reasons for judgment issued by Harrington J. of the Federal Court. Judgment was rendered on January 16, 2007. The order sought is to stay the execution of the Federal Court order pending the appeal before this Court and until a final judgment is rendered by this Court on the said appeal.
[2] The Federal Court found that the two corporate appellants and Carmello Cerrelli had infringed the plaintiff’s copyrights. It ordered that the counterfeit CDs and material seized by the Royal Canadian Mounted Police be delivered up to the plaintiff, along with all other material in their possession, custody, control or power which offends the Federal Court order.
[3] In addition, the three appellants mentioned above were ordered to jointly and severally pay statutory damages to the plaintiff in the amount of $500,000. Punitive damages of $100,000 were imposed on Carmello Cerelli. As for the two corporate appellants, they were jointly and severally liable to also pay punitive damages of $100,000 to the plaintiff.
[4] Finally, permanent injunctions were issued against the four appellants enjoining them, among other things, from directly or indirectly infringing the plaintiff’s trade-marks, passing off any wares or services, and making, selling, distributing, advertising, possessing or importing into Canada counterfeit copies of the twenty-five computer programs and related material in issue in these proceedings.
[5] Costs were allocated to the plaintiff and were the subject of a separate order.
[6] In its written representation on the motion for a stay as well as in a letter sent to the Administrator of the Court, the plaintiff objected to the disposition of the motion in writing and requested an oral hearing of the motion. The appellants indicated in a reply to that letter their willingness to proceed by way of an oral hearing.
[7] In this Court, motion are, as a general rule, heard in writing unless the Court is of the view, pursuant to the evidence submitted to it, that the matter cannot be presented adequately in writing. There is no evidence to that effect in the present instance and, therefore, the motion will be heard in writing.
[8] After careful consideration and analysis of the submissions made by the parties, I am of the view that the motion for stay should be dismissed with costs.
[9] The appellants have simply provided no evidence that they would suffer irreparable harm and that the balance of convenience favours them. In addition, the stay sought is over-reaching. I will now address these two findings.
[10] The stay is over-reaching in that the corporate appellants neither challenge their liability for infringement nor the permanent injunctions issued against them. In addition, they do not attack the order that requires them to deliver up the counterfeit CDs and related material as well as all the material in their possession, custody, control or power which may offend the order. There is, therefore, no justification for staying these important conclusions of the Federal Court’s judgment and order. In fact, the appellant Carmelo Cerrelli is contesting every aspect of the order issued against him while Adam Cerrelli seeks to be exempted from the scope of the permanent injunctions. This was the only conclusion taken against him. The corporate appellants’ challenge is narrowly focussed on the damages: they want the statutory damages reduced to $12,500 and an exoneration from punitive damages. Obviously, a general stay as requested cannot and should not be issued. This brings me to the lack of evidence in support of the motion.
[11] Only Carmello Cerrelli, whose credibility has been seriously put in doubt in the judgment, filed an affidavit in support of the motion. The reasons found in paragraph 3 of the affidavit read as follows:
3. The reasons for the Appellants to request that the Order be stayed of [sic] the following, namely:
- The reasons invoked in the Notice of Appeal demonstrate [sic] are serious questions to be tried;
- If the stay of the Order is not granted, the Appellants will suffer an irreparable harm if the relied [sic - relief] is not granted considering the award of damages granted by the said Order as well as the extent of the various injunctive orders issued by the Honourable Justice Harrington in the Order;
- The balance of the inconvenience clearly favours the Appellants considering that the execution of the various injunctive orders would grant the Respondent substantial success prior to the hearing of the Notice of Appeal;
- Moreover, without the issuance of the stay of proceedings, irreparable harm would be suffered by the Appellants due to this significant impact on the financial viability of the Corporate Appellants, if stay was not issued;
- Finally, this Honourable Court should also stay execution of the Order with regards to the assessment of costs due to the irreparable harm that the Appellants would suffer based on the significant impact on the financial viability of the latter;
[12] I agree with the submissions of the plaintiff that the affiant’s evidence on the issues of irreparable harm and balance of convenience is nothing other than bold assertions, unsupported by any evidence. For example, no evidence is offered as to the financial situation of the corporate appellants that would enable this Court to assess the impact that the award of damages would have on their viability. At best, the assertions made by the affiant are speculative: see Centre Ice Ltd. v. National Hockey League et al. (1994), 53 C.P.R. (3d) 34, at pages 52 to 54; Nu-Pharm Inc. v. Merck & Co. et al., A-804-99 at paragraphs 24 and 25. As Rothstein J.A. said in the Nu-Pharm Inc. case, the “purpose of a stay is not to alleviate the financial difficulties of a firm or to sustain it in its current form when other options for survival are available”.
[13] For these reasons, the motion for a stay of the judgment and order of the Federal Court, including the separate order as to costs, will be dismissed with costs.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-44-07
STYLE OF CAUSE: 9038-3746 QUEBEC INC., 9014-5731 QUEBEC
INC., ADAM CERELLI, CARMELLO CERELLI
v. MICROSOFT CORPORATION
MOTION DEALT WITH IN WRITING WITHOUT APPEARANCE OF PARTIES
REASONS FOR ORDER BY: LÉTOURNEAU J.A.
WRITTEN REPRESENTATIONS BY:
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FOR THE APPELLANTS
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Tara James |
FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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Montreal, Quebec
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FOR THE APPELLANTS
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Toronto, Ontario |
FOR THE RESPONDENT
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