Federal Court cannot by its own motion punt copyright claim to more convenient forum

In Sadhu Singh Hamdard Trust v Navsun Holdings Ltd, 2014 FC 1139, the Federal Court dismissed the plaintiff’s claims of copyright and passing off. On March 2, 2016, the Federal Court of Appeal set aside the parts of the judgment relating to two of the three defendants.

The plaintiff, Sadhu Singh Hamdard Trust, publishes a Punjabi-language daily newspaper, the Ajit Daily. The two defendants in the appeal publish a Canadian Punjabi-language newspaper, the Ajit Weekly. There has been substantial litigation between the parties over the use of the Ajit name and the stylized depiction of the name used on the masthead of the Ajit Weekly. Litigation in the U.S. resulted in a partial settlement agreement that stipulated that it was to be governed by the laws of New York and that the New York courts retain jurisdiction over its interpretation and implementation.

The Federal Court dismissed the Canadian copyright claim on the basis that:

• without expert evidence as to American law, the Federal Court could not adjudicate the copyright claim;

• the claim was settled by the previous agreement because it permitted the current form of the logo used by the Defendants; and

• any disputes between the parties regarding copyright should go back to the United States.

The Federal Court of Appeal set aside these determinations.

First, the Federal Court erred in law in relying on the lack of evidence about American law as providing a basis for the dismissal of the copyright claim. The Court was bound to apply Canadian conflict of laws principles and a lack of evidence regarding American law is not an impediment to interpreting the settlement agreement, to the extent it was required to do so to adjudicate the copyright claim.

Second, the settlement agreement only provided a license from October 2009 onwards and contained no release for any prior infringement. Thus, current compliance with the settlement agreement was irrelevant to the claim for copyright infringements that occurred before October 2009. The Federal Court erred in dismissing the entire claim, which dated back to 2007, on the basis of current compliance.

Finally, the Court erred in finding that the choice of forum clause provided a basis for the dismissal. The parties attorned to the jurisdiction of the Federal Court to resolve their dispute and no party objected to the Court’s jurisdiction. A court cannot, of its own motion, decline to hear a dispute that falls within its jurisdiction on its belief that another forum is more appropriate. The Court of Appeal relied on Club Resorts Ltd. v. Van Breda:

Once jurisdiction is established, if the defendant does not raise further objections, the litigation proceeds before the court of the forum. The court cannot decline to exercise its jurisdiction unless the defendant invokes forum non conveniens. The decision to raise this doctrine rests with the parties, not with the court seized of the claim.

The Court of Appeal also set aside the Federal Court’s dismissal of the plaintiff’s claim of passing off in relation to the use of the same Ajit name and logo. The decision was remitted back to the Federal Court for redetermination.

A copy of the Court of Appeal’s Reasons for Judgment can be found here.