In a year that could not seem to get any more litigious for the Toronto Regional Real Estate Board (TRREB), the Federal Court of Canada has issued yet another decision relating to the alleged breach of TRREB’s rights in its online Multiple Listing Service (MLS) System. TRREB is a not-for-profit entity and is Canada’s largest real estate Board, operating as a trade association on behalf of its more than 62,000 members in the Greater Toronto Area. One of the services it offers to its members is its MLS System: an online system for collecting and distributing real estate information among its members, including addresses, list prices, property photos and the length of time for sale.
For our reporting on TRREB’s other recent litigation, click here.
In Toronto Regional Real Estate Board v. IMS Incorporated, 2021 FC 1239 , TRREB moved under Rule 51 of the Federal Courts Rules (FCR) to appeal the Case Management Judge’s (CMJ) order striking its claim for copyright infringement against the Defendant IMS Incorporated as disclosing no reasonable cause of action and as an abuse of process (under Rules 221(a) and (f) of the FCR). In particular, the CMJ struck TRREB’s claim on the basis that the Federal Court of Appeal decided in a separate decision that copyright does not subsist in TRREB’s MLS System (Toronto Real Estate Board v Commissioner of Competition, 2017 FCA 236 (“TRREB v Commissioner of Competition”)) and the issue should not be relitigated. On appeal, TRREB argued that the CMJ: (i) failed to assume the facts in the claim to be true; (ii) determined that no copyright subsisted in TRREB’s MLS System at issue in this action without evidence, based solely on a factual determination made in a different case; and (iii) failed to apply the presumptions of subsistence and ownership of copyright under s. 34.1 of the Copyright Act.
The Court ultimately found that the CMJ committed a reviewable error by finding that copyright did not subsist in TRREB’s MLS System based on the prior TRREB v Commissioner of Competition decision, and that its case amounted to relitigation constituting an abuse of process.
Whether TRREB’s copyright claims amount to relitigation
The Court found that the CMJ’s ruling that TRREB v Commissioner of Competition had already decided there was no copyright in the MLS System necessarily assumed that the MLS System from that prior decision and TRREB’s MLS System at issue in the underlying action were the same. However, there was no evidence that the same works were at issue in both proceedings. The Court also discussed its power to take judicial notice of facts which have not been proven in evidence. It noted that this power must be exercised with care. Facts that could be reasonably questioned cannot be the subject of judicial notice, and caution is warranted where the use of a prior judicial precedent to ground a claim of judicial notice would permit a party to substitute precedent for proof. If a fact subject to judicial notice is adjudicative and central to a dispositive issue, the scope of and freedom to resort to judicial notice is narrowed.
In this case, the Court found that whether the works in TRREB v Commissioner of Competition and the underlying action were the same was an adjudicative fact that was central to a dispositive issue in the action. The CMJ’s order did not explain a basis for taking judicial notice that the two works were the same. The Court also noted that whether a work meets the originality threshold is a finding of mixed fact and law and depends on the application of facts to a legal test. The record before the FCA in TRREB v Commissioner of Competition was not before the CMJ and there is no way to know if the evidentiary basis for the FCA’s determination would be the same in the underlying action.
In addition, the Court also noted that previous orders from the courts relating to the MLS System, including interim injunctions, default judgments and consent judgments, supported TRREB’s position that its copyright infringement claim was not bound to fail.
Whether relitigation constitutes an abuse of process
In addition, the Court found that even if TRREB was relitigating the same issue in TRREB v Commissioner of Competition, the CMJ did not properly address whether asserting copyright claims in the action constituted an abuse of the Court’s processes under Rule 221(1)(f) of the FCR. The Court noted that bars against relitigation are discretionary, and that this discretion must be exercised after having taken into account a wide variety of circumstances, including whether relitigation might enhance the integrity of the judicial system and whether relitigation might create unfairness. The CMJ’s order failed to articulate consideration of these factors. Further, the Court noted that even had the CMJ included reasons, it was unconvinced that the doctrine should be invoked.
Ultimately, the Court concluded that the CMJ’s order demonstrated a palpable error by relying on the finding in TRREB v. Commissioner of Competition to conclude that no copyright existed in the MLS System, and that relitigating the issue would constitute an abuse of process. In addition, the Court concluded that the errors were overriding because the findings were the only reason for striking out the copyright claims without leave to amend based on an abuse of the Court’s process under Rule 221(1)(f).
The decision illustrates how litigants are not necessarily barred from reasserting copyright in a work despite having been unsuccessful in the past; where the surrounding factual matrix has changed since the previous litigation, there may be room to argue that there is a fresh case. The decision also demonstrates the importance of archiving how a work is developed – or later altered – should a litigant be tasked with distinguishing its work from earlier precedents.