Date: 20100412
Docket: T-91-10
Citation: 2010
FC 387
Toronto, Ontario, April 12, 2010
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
VINOD CHOPRA FILMS PRIVATE LIMITED
AND RELIANCE MEDIAWORKS (USA) INC.
Plaintiffs
and
JOHN DOE AND JANE DOE AND OTHER PERSONS,
NAMES UNKNOWN, WHO DEAL IN COUNTERFEIT VIDEO RECORDINGS, AND OTHER PERSONS
LISTED IN SCHEDULE "A" TO THE STATEMENT OF CLAIM
Defendants
REASONS FOR ORDER AND ORDER
[1]
This is a
review of a “rolling” type Anton Piller Order granted by the Court in these
proceedings, ex parte, on January 26, 2010, which has been sought by
several but not all of the parties that have been named as Defendants. This
Order therefore will pertain only to those named Defendants who have sought
this review, all others remain unaffected.
[2]
For the
reasons that follow I am setting aside the Anton Piller Order as it affects the
Defendants who have sought this review, grant them their costs reasonably
incurred on a full indemnity basis, and will Order that the action as against
those Defendants be dismissed on terms.
THE
DEFENDANTS WHO HAVE SOUGHT THIS REVIEW:
[3]
Some, but
not all of the persons and corporations that have so far been specifically
identified as Defendants have sought this review. This Order shall only pertain
to the Defendants seeking this review whom I will call Affected Defendants.
They are:
·
1557768
Ontario Inc. o/a Golumbia Video
·
Arangesan
Paramsothy
·
1691731
Ontario Inc. o/a Bollywood 4 U
·
Abulsama
Jibhai
·
2148409
Ontario Inc. o/a Video Station
·
Kulwant
Kaur Singh
·
215151872
Ontario Inc. o/a Singh Video Station
·
Mohan
Singh
·
2031221
Ontario Inc. o/a Old Karachi Bazar
·
Royal Paan
Inc.
·
Neerad
Upadhyay
·
Anmol
Records Inc.
·
Rajesh
Syal
·
2122308
Ontario Inc. o/a Albion Audio & Video
·
Kulbir Singh
Mokha
[4]
It must be
noted that Tayyabi Huma appeared in person before me and filed an affidavit
with this Court to the effect that she had nothing to do with Old Karachi Bazar
and that her involvement was simply coincidental as she happened to be in the
store when the Anton Piller enforcers arrived. She acted as an interpreter.
After some discussion between Ms. Huma, the Court and counsel for the
Plaintiffs it was agreed that Ms. Huma would no longer be troubled with
anything to do with these proceedings. She has been inconvenienced by the
Plaintiffs who involved her in the proceedings and is entitled to reasonable
out-of-pocket disbursements. I estimate they would be $250.00.
ANTON PILLER ORDERS
[5]
An Anton
Piller Order is a form of civil search warrant enabling representatives of a
plaintiff to request entrance into premises occupied by persons named or to
become named as defendants to search for and seize relevant documents and
things pertinent to the proceedings subject to any further Order of the Court.
[6]
The
leading case is the recent decision of the Supreme Court of Canada in Celanese
Canada Inc. v. Murray Demolition Corp., 2006 SCC 36, [2006] 2 S.C.R. 189,
in which Binnie J. delivered the unanimous decision for the Court. Binnie J.
wrote at paragraphs 1, and 28 to 32:
1 BINNIE J.:— An Anton
Piller order bears an uncomfortable resemblance to a private search
warrant. No notice is given to the party against whom it is issued. Indeed,
defendants usually first learn of them when they are served and executed,
without having had an opportunity to challenge them or the evidence on which
they were granted. The defendant may have no idea a claim is even pending. The
order is not placed in the hands of a public authority for execution, but
authorizes a private party to insist on entrance to the premises of its
opponent to conduct a surprise search, the purpose of which is to seize and
preserve evidence to further its claim in a private dispute. The only
justification for such an extraordinary remedy is that the plaintiff has a
strong prima facie case and can demonstrate that on
the facts, absent such an order, there is a real possibility relevant evidence
will be destroyed or otherwise made to disappear. The protection of the party
against whom an Anton Piller order is issued ought
to be threefold: a carefully drawn order which identifies the material to be
seized and sets out safeguards to deal, amongst other things, with privileged
documents; a vigilant court-appointed supervising solicitor who is independent
of the parties; and a sense of responsible self-restraint on the part of those
executing the order.
…
28
Anton Piller orders have been available in Canada for close to 30 years.
Unlike a search warrant they do not authorize forcible entry, but expose the
target to contempt proceedings unless permission to enter is given. To the
ordinary citizen faced on his or her doorstep with an Anton
Piller order this may be seen as a distinction without a meaningful
difference.
29 Originally developed as
an "exceptional remedy" in the context of trade secrets and
intellectual property disputes, such orders are now fairly routinely issued in
ordinary civil disputes…
[7]
The Anton
Piller Order originated from a decision of the English Court of Appeal in a
case of that name Anton Piller KG v. Manufacturing Process Ltd., [1976]
Ch. 55, in which the Plaintiff, a manufacturer of sophisticated electric motors
used in computers, had evidence from two former employees of the Defendant that
the Defendant was stealing the Plaintiff’s trade secrets and would be likely to
destroy evidence to that effect if it had notice. The Court gave an Order
permitting the Plaintiff to request that the Defendant allow an inspection of
its premises for the purpose of finding and securing such evidence. Refusal by
the Defendant to allow such entry and inspection would be a contempt of court.
The extraordinary nature of this Order was specifically addressed by Lord
Denning M.R. at page 61 where he wrote:
This is not covered by the Rules of the
Supreme Court and must be based on the inherent jurisdiction of the court.
There are one or two old precedents which give some colour for it, Hennessy v.
Rohmann, Osborne & Co. [1877] W.N. 14, and Morris v. Howell (1888) 22 L.R.
Ir. 77, an Irish case. But they do not go very far. So it falls to us to
consider it on principle. It seems to me that such an order can be made by a
judge ex parte, but it should only be made where it is essential that the
plaintiff should have inspection so that justice can be done between the
parties: and when, if the defendant were forewarned, there is a grave danger
that vital evidence will be destroyed, that papers will be burnt or lost or
hidden, or taken beyond the jurisdiction, and so the ends of justice be
defeated: and when the inspection would do no real harm to the defendant or his
case.
Nevertheless, in the enforcement of this
order, the plaintiffs must act with due circumspection. On the service of it,
the plaintiffs should be attended by their solicitor, who is an officer of the
court. They should give the defendants an opportunity of considering it and of
consulting with their own solicitor. If the defendants wish to apply to
discharge the order as having been improperly obtained, they must be allowed to
do so. If the defendants refuse permission to enter or to inspect, the
plaintiffs must not force their way in. They must accept the refusal, and bring
it to the notice of the court afterwards, if need be on an application to
commit.
[8]
Thus an
Anton Piller Order began as an extraordinary remedy, to be used only when it
was “essential” and there was “grave danger” that the evidence
might be destroyed such that the “ends of justice be defeated” and, from
the defendant’s point of view, no real harm would be done. The jurisprudence in
Canada has culminated in the Celanese
case, supra, where the Supreme Court of Canada has called the Order
an “extraordinary remedy” to be used only when there is a “real
possibility that relevant evidence will be destroyed or otherwise made to
disappear”.
[9]
There have
been many cases in Canada dealing with Anton Piller
Orders however it is appropriate to consider that the principal jurisprudence
has now been established by the Supreme Court of Canada in Celanese supra.
The requirements for obtaining such an Order were set out by Binnie J. at
paragraph 35 of that decision:
35 There are four essential
conditions for the making of an Anton
Piller
order. First, the plaintiff must demonstrate a strong prima facie case. Second, the damage to the plaintiff of the defendant's
alleged misconduct, potential or actual, must be very serious. Third, there
must be convincing evidence that the defendant has in its possession
incriminating documents or things, and fourthly it must be shown that there is
a real possibility that the defendant may destroy such material before the
discovery process can do its work…
I will return to these requirements later
in these reasons.
WHAT IS A “ROLLING”
ANTON PILLER ORDER?
[10]
The Order
under review here is what has become known as a “rolling” Anton Piller Order,
Such an Order was discussed by Pelletier J. (as he then was) in Club Monaco
Inc. v. Woody World Discounts (1994), 2 C.P.R. (4th) 4-36,
[1999] F.C.J. No. 1645 at paragraph 6:
6 The comments which
follow are limited to the question of "rolling" Anton Piller orders
in which the defendants are not known and which are issued against John Doe and
Jane Doe. They are also limited to the case of itinerant sales or flea markets
and do not deal with the particular problems which arise in the case of
travelling celebrity attractions, to which other considerations may apply.
These "rolling" orders are potentially binding upon all who carry on
trade in certain types of consumer goods. It is therefore incumbent upon the
Court to be satisfied that the potential interference with individual rights is
justified by the evidence put before it as to the scope of the infringement of
the plaintiff's rights.
[11]
There have
been a few instances where such “rolling” Orders have also been directed toward
permanent shops as well (e.g. Viacom Ha! Holding Co. v. Doe (2000), 6
C.P.R. (4th) 36 per Tremblay-Lamer J. at para 67).
[12]
Professor
Jeff Berryman of Windsor Law School (formerly the dean) has written
extensively on the subject of Anton Piller Orders, particularly in the Canadian
context. In his paper entitled “Recent Developments in Anton Piller Orders”
appearing in the Oxford Intellectual Property Research Centre Working Paper
series No. 4, Nov. 2001 he discussed the development of “rolling” Orders in
Canada, particularly in the Federal Court (the “Oxford” paper). The following
are excerpts from that paper. Prof. Berryman begins at page 2:
Rolling Anton Piller Orders
It is difficult to
discern a definite point in time when the rolling Anton Piller order was created
in Canada although it is uniquely a creation of the Federal Court.
Canada’s Federal Court is a statutory court created pursuant to the
constitutional powers accorded the Federal government to establish courts for
the ‘better administration of the laws of Canada’. Under the
constitutional division of powers the Federal government has the exclusive
responsibility to create and regulate copyright and patents, and pursuant to
the trade and commerce power, to make provision for trademarks. While the jurisdiction
of the Federal Court, and the reasons for maintaining it as a separate court,
have often been challenged throughout its 126 year history, most critics have
accepted the desire to have a specialist tribunal deal with, among other things,
intellectual property as a valid reason for the court’s continued existence. Pursuant to this
specialized nature the Federal Court, during the eighties, built up a
significant Anton Piller jurisdiction the majority of which involve breaches of
copyright and trademark.
[13]
I move to
the end of that paper where, at page 13 Prof. Berryman wrote:
Evaluation of the
Federal Court’s Position on Rolling Anton Piller Orders
‘New millennium’,
‘post-industrial’, ‘globalization’, and the ‘knowledge economy’ are all terms
often placed within close proximity to one another. Taken together they mark a paradigm
shift in the underlying economic basis of western democracies. Information, knowledge,
brand names and consumers associative memories that go with this material to generate
goodwill, as well as the manipulation of the same, increasingly forms the main
assets of modern enterprises. This new form of property is distinguished by one
major characteristic, that it is capable of multiple use without a
corresponding deprivation of use by the lawful owner. Thus, the primary wealth
in the property is its ‘use’ value that can only be protected by remedies aimed
at exclusion of others. The common law’s presumptive remedy, damages, is
substitutionary in effect, measuring and trading the plaintiff’s loss for a
damages equivalent. Equity’s presumptive remedy, the injunction, is
exclusionary in effect. Thus, as the knowledge economy takes hold, we can only
expect an increasing reliance upon exclusionary remedies. The Federal Court’s
rolling order is a natural growth of this trend but it also portends other
changes.
At page 14 he points out that the Federal Court is, in
effect, filling in gaps in legislation:
By virtue of its
statutory jurisdiction Canada’s Federal Court has received the vast majority of Anton
Piller suits. The court’s cautious development has occurred at a time when the
Federal government has spent considerable time in legislating changes to Canada’s intellectual
property statutes including the remedial provisions. Thus, the legislature
has had the opportunity to address concerns with the direction that the court
has been taking.
Certainly, one would
expect and hope that government’s legal advisors were aware of legislative
initiatives in the United Kingdom during this period. On the other hand, the fact that the
legislature did not make specific provision for a self-help right of seizure,
as the United Kingdom had done with copyright in 1988, may cause pause for a
court and whether it should ‘gap fill’ legislation. In this sense the Federal
Court has been caught in a quandary over a lacuna in Canadian law.
The “Rolling
Order” has never been fully litigated, a problem that concerned Professor
Berryman as he wrote at page 15:
A common feature in
most jurisdictions that have developed the Anton Piller order, but perhaps more
so in Canada’s Federal Court, have been the relative paucity of either ‘strong’
or willing defendants to mount concerted actions against the order. The
conditions in which adjudication takes place are thus less than ideal. In Canada the number of
plaintiffs, and their counsel engaged in arguing before the Federal Court, have
been small in number. From a plaintiff’s point of view, significant advances
have been made, but have these been matched by sufficiently vigorous arguments
for defendants?
…
Rolling Anton Piller
orders and the exclusionary remedy they provide are both a work in progress and
a principle derived from adjudication. The remedy is responsive to plaintiffs
needs; it remains to be seen whether it proves to be an inconvenience along the
way to a better developed set of coherent decision making principles. I do not
believe the Federal Court should be faulted for trying. The conditions for
adjudication are not ideal; nevertheless, the court does make participation in
its processes by defendants and other voices representative of an extra-legal
community an important focus.
[14]
The
situation remains today largely as expressed in 2001 by Prof. Berryman. There
has not been a case, until the present, where sufficiently rigorous arguments
have been raised by a defendant. The “rolling” Order as it has been developing
is a remedy responsive to a plaintiff’s needs but has a proper balance with
respect to a defendant’s concerns and the concerns of the public at large been
considered? Has due regard been given to The Canadian Charter of Rights and
Freedoms, section 8:
8. Everyone has the right to be secure
against unreasonable search or seizure.
THE PLAINTIFFS AND RIGHTS ASSERTED
[15]
It is not
contested for the purposes of this review that the Plaintiff Vinod Chopra Films
Private Limited is an Indian Company and owner of copyright in Canada in a motion picture film
entitled “3 Idiots”. A certificate of the registration of that copyright with
the Canadian Copyright Office is in the record as registration number 1073886
registered January 13, 2010 which names Vinod Chopra Films Pvt. Limited as
owner. (I do not consider that the abbreviation of Private to Pvt. is material
at this stage). Under the provisions of the Copyright Act, R.S.C.1985,
c. C-42, section 53(2) that certificate is evidence that copyright subsists in
the work and that the person so registered is the owner. One of the Defendants’
Counsel, Mr. Padda, raised an objection to the effect that the registration of
copyright was secured after some of the allegedly infringing events occurred.
It must be remembered that copyright subsists without registration, a
registration is evidence as to the subsistence of copyright but is not
necessary to create the right. Here we have that evidence by way of the
registration. That evidence is not contested.
[16]
The other
Plaintiff, Reliance Mediaworks (USA)
Inc. purports to be a licensee under that copyright with rights to exploit the
work in Canada in motion picture theatres as
well as by CD’s, DVD’s and the like. Counsel for some of the defendants, Mr. Schneiderman,
invited me to find that this plaintiff had not sufficiently demonstrated his
rights as licensee on the evidence provided to the Judge who granted the
original ex parte Order, Justice Zinn. I have reviewed that evidence,
which comprises the affidavit of Sumit Chadha sworn January 18, 2010 and in
particular paragraphs 16 to 22. I am satisfied that this Plaintiff has
sufficient status to claim as a licensee for the purpose of the Anton Piller
Order. The full nature and extent of the license, if contested, may become more
material as the action progresses into trial, if at all.
[17]
For
purposes of the Anton Piller Order I am satisfied that a strong prima facie
case has been made and that copyright subsists in Canada in the motion picture
filed entitled “3 Idiots”, that the plaintiff Vinod Chopra Films Private
Limited is the owner of that copyright and that the Plaintiff Reliance
Mediaworks (USA) Inc. is a licensee in Canada in respect of that copyright. It
has not been contested on the motion before me that such copies of “3 Idiots”
has have been seized in execution of the Order are unauthorized copies.
REVIEW OF AN ANTON PILLER ORDER
[18]
This is a
review of an Anton Piller Order granted, ex parte, January 26, 2010.
This is the first time that a defendant has an opportunity to challenge that
Order. The law is clear that such a review is conducted de novo and that
evidence in addition to that considered by the Judge granting the original
Order may be taken into consideration. (Adobe Systems Inc. v. KLJ
Computer Solutions Inc., [1999] 3 F.C. 621 (T.D.); Bell Express Vu v. Rodgers
(2007), 57 C.P.C. (6th) 312 (Ont. SC) at para 11).
[19]
The
original Order was granted ex parte. As Binnie J. wrote in Celanese supra
at paragraph 36 there is a heavy onus on counsel and the parties seeking that
Order to be candid and complete:
36. Both the strength and the weakness of
an Anton Piller order is that it is made ex parte and interlocutory: there is
thus no cross-examination on the supporting affidavits. The motions judge
necessarily reposes faith in the candour and complete disclosure of the
affiants, and as much or more so on the professional responsibility of the
lawyers participating in carrying out its terms.
[20]
There is a
duty on a party, especially in ex parte proceedings, to make out its
case. It should not take a position where it will put in enough evidence to
persuade a Court to issue the Order, then “cooper up” any deficiencies later,
if challenged. I am particularly concerned with two situations, one is directed
to proof of a plaintiff’s rights, something that is known to the plaintiff
before the proceedings have been instituted and should be fully established in
evidence before the Court in seeking the ex parte Order. The second is
more insidious. An Anton Piller Order is to be granted only where there is
grave danger that relevant material may be destroyed. For a plaintiff simply to
allege that a defendant may destroy relevant material, obtain an Order, secure some
material by a surprise search, then return to the Court with the material in
hand should not mean that the fact that such material has been obtained can now
be used as proof of the likelihood that it would have been destroyed. Such later
acquired material may be evidence of the existence of such material, but not
evidence that it would likely have been destroyed. Evidence as to the general
conduct of a Defendant whose premises are being searched should be used with
extreme caution when attempting to use such “post Order” evidence to support
the “pre Order” assertion that the materials sought would likely be destroyed.
There must be sufficient proof at the beginning of the process to support an
allegation of likely destruction, not a simple allegation to be supported later
by conduct of a party during execution of the Order or materials seized.
[21]
Since an
Anton Piller Order is an extraordinary remedy. I have no hesitation in drawing
an analogy to a situation such as that considered in the context of criminal
law. In Sopinka et al “The Law of Evidence in Canada”, 3rd ed, Lexis Nexis, the
authors wrote at paragraph 6.437:
6.347 It is therefore incumbent on the
trial judge to carefully instruct the jury to ensure that such evidence is not
misused. The jury should be told that after-the-fact conduct relied on by the
Crown has only an indirect bearing upon the issue of guilt and that the jury
should exercise caution in inferring guilt because the conduct might be explained
in an alternative manner. The jury should also be instructed that they must not
use this conduct to support an inference of guilt unless they rejected any
innocent explanation for the conduct.
[22]
In short,
post Order conduct of a defendant may be introduced but used with extreme
caution if it is to be used in support of an allegation made at the ex parte
hearing that the defendant would have been likely to destroy relevant material.
[23]
A review
of the ex parte Anton Piller Order is to be conducted so as to determine
if the four criteria for obtaining such an Order as set out by the Supreme
Court of Canada in Celanese supra at paragraph 35 have been met, to
repeat:
·
Has the
plaintiff demonstrated a strong prima facie case
·
Is the
damage to the plaintiff potential or actual very serious
·
Is there convincing
evidence that the defendant has in its possessions incriminating documents or
things
·
Is there a
real possibility that the defendant may destroy such material before the
discovery process can do its work
[24]
I add that
there are further criteria discussed in Anton Piller supra and in
cases such as Netbored Inc. v. Avery Holdings Inc., 2005 FC 1405 at
paragraphs 63 to 66, namely:
·
Would the
inspection do no harm to the defendant or its case
·
Would the
interests of justice be brought into disrepute
[25]
As this
case deals with a “rolling” Anton Piller Order the review must also consider criteria
such as set out by Pelletier J. at paragraph 7 of Club Monaco supra:
As a result, it is my view that in future
applications for a rolling Anton Piller order the evidence submitted in support
of the application should reflect the following:
1) The affidavits should contain the
personal knowledge of the affiant as to the nature and extent of the problem as
it relates to the Plaintiff. It is, after all, the plaintiff's valuable
property which it is sought to protect. If the officers of the plaintiff are
not in a position to testify from their own personal knowledge as to the nature
and extent of the problem, doubts are raised as to the need for the remedy.
While counsel who habitually practice in this area no doubt acquire expertise
and insight into the practices of counterfeiters, the unusually heavy reliance
upon information provided by counsel which one often sees in these matters
creates a risk of putting counsel's credibility in issue. This detracts from
the independence which the Court is entitled to expect from counsel appearing
before it.
2) Certain elements of the proof put
before the Court are general in nature and cannot be easily be particularized,
for example, the damage to the goodwill of the plaintiff from the existence of
substandard counterfeit goods. This evidence can be given in the form of
general statements of the plaintiff's understanding of the effect of counterfeiting
upon the value of their intellectual properties.
3) Other elements of the proof can and
should be particularized, specifically the instances of counterfeiting known to
the plaintiff which would justify the granting of an order. In general it would
not be sufficient to simply say that the plaintiff is aware of counterfeiting
in a given city or region. Since these orders are applied for ex parte and
often in camera, there is no obvious justification for not giving the Court
particulars of known instances of counterfeiting which would justify the
issuance of the order sought, especially when the counterfeiting activity is
taking place at some distance from the centre where the order is sought.
4) In general, a number of instances of
counterfeiting would be required to justify a "rolling" order for the
simple reason that a specific instance would only justify a specific order. If
the plaintiff wishes an order applicable to unlimited future instances, it is
incumbent upon it to demonstrate that specific orders are not an appropriate
remedy. The deponent's unsupported testimony as to his or her belief that such
an order is required would not usually be sufficient.
5) In the same way, proof of a number of
incidents of counterfeiting in Ontario would only justify an order which
applied to Ontario. If a Canada wide
order is sought, there should be some proof that the counterfeiting is not a
local problem. This is not an insurmountable problem: an order tailored to the
evidence submitted at the time of the hearing could be extended subsequently by
amendment if further evidence of counterfeiting in other provinces or regions
became available.
6) Since it is the allegation of
counterfeiting which justifies the extraordinary interference with existing
property rights, the grounds upon which it is believed that counterfeiting is
occurring should be clearly stated. A simple assertion that the affiant
believes the goods to be counterfeit is not sufficient. What observations or
examinations support the affiant's belief? In general terms, evidence upon
information and belief as to this issue would not be particularly persuasive.
This evidence goes to the heart of the application and should receive critical
attention.
7) In those cases where it is sought to
renew an existing order, it is incumbent upon the plaintiff to demonstrate to
the court the use which it has made of the order previously granted. An order
which has not been enforced does not need to be renewed but the fact of
enforcement does not, of itself, justify renewal of the order, though it may in
some cases. As a courtesy to the Court, this information should be collated and
summarized so as to enable the court to quickly review the plaintiff's past
experience.
8) An assertion in an affidavit that the
plaintiff agrees to be bound by an undertaking as to damages is not an
undertaking as to damages just as a promise to agree is not an agreement. A
separate undertaking as to damages, directed to the court, properly executed by
corporate officers who have the authority to do so should accompany the
application.
[26]
A further
point raised upon this review was the use of the “John Doe” designation of
defendants in the “rolling” order. Was it a proper use of the “John Doe”
procedure?
[27]
Fortunately
not all of these considerations need to be considered on this review. Counsel
for all parties, Plaintiffs and Defendants, were extremely professional and
helpful in reducing the number of issues and getting to the point particularly
Ms. Danzig for the Plaintiffs and Mr. Toyne for some of the Defendants. There
is little real dispute, as to the rights asserted by the Plaintiffs, nor is
there any real dispute that the copies of the “3 Idiots” motion picture
embedded in the CD’s and DVD’s seized were unauthorized copies. The manner in
which the execution of the Order, once granted, was carried out is not in
dispute. The issues for consideration on this review are therefore those as set
out in the following section.
ISSUES FOR REVIEW:
[28]
The issues
now before the Court, which will be considered in turn are:
1. Have the Plaintiffs
established that the damage, potential or actual, is very serious?
2. Have the Plaintiffs provided
convincing evidence that the defendants have in their possession incriminating
documents or things?
3. Have the Plaintiffs
established a real possibility that the Defendants may destroy such material
before discovery?
4. Have the Plaintiffs provided a
proper basis for a “John Doe” proceeding?
5. Have the interests of justice
been brought into disrepute?
1. Have the Plaintiffs established that
the damage, potential or actual, is very serious?
[29]
It is to
be noted at the outset that this requirement is not only that damage, potential
or actual, exists or will exist, but that such damage is very serious.
[30]
The
evidence to that effect put before the Court on the ex parte application
is found on the affidavit of Sumit Chadha sworn January 18, 2010. He is the US
Operations Manager of the Plaintiff Reliance, a position that he has held for
some three years. The issue of damage is discussed at paragraphs 32 to 44 of
that affidavit. At paragraph 33 he states, with reference to a news report on
the Al Jazeera Network (no copy provided) that the Indian pirated movie
industry earns more than four times what the mainstream industry earns. At
paragraph 34 he refers to a US India Business Counsel news release stating that
the Indian economy has sustained huge job and revenue losses as result of
piracy. A different report is also referred to in that paragraph. He purports
to attach as Exhibit F a copy of the press release. In fact Exhibit F is
another copyright registration certificate said to be erroneous (paragraphs 23
to 25). Nowhere is a copy of the news release or report provided. At paragraphs
35 to 38 he discusses how plans are made such that a motion picture is released
in theatres with a planned later release of home video copies. At paragraph 38
he says that unauthorized copies “detrimentally impact” upon such plans. At
paragraph 39 to 41 he discusses illegal sales of videos that “reduces attendance
at theatres” referring to a 1999 report by an entity identified only as MPA
respecting the movie “Star Wars”. At paragraph 42 he says that his company’s
market for home video products will “diminish”. At paragraph 44 he concludes
that lost ticket sales and sales of video products will result.
[31]
Nowhere
does this evidence specifically direct itself to Canada, nor the motion picture “3 Idiots” nor
to any particular potential defendant or group of defendants. Nowhere is the
damage said to be “very serious”.
[32]
Even to
look at the post-Order evidence, the results of the execution of the Order show
that only a handful of unauthorized video copies of “3 Idiots” were seized.
They are said to sell at between one and two dollars a copy. Even if statutory
damages as permitted by the Copyright Act, supra, were assessed
even at the high end, they would not amount to “very serious” damage.
[33]
Plaintiffs’
counsel submitted that the total quantity of unauthorized videos is still
unknown and the market destruction is still unknown. That may be, but the onus
was on the Plaintiffs to establish that the damage, actual or potential, was or
would be “very serious”. They have not done so.
2. Have the Plaintiffs provided
convincing evidence that the defendants have in their possession incriminating
documents or things?
[34]
I am
satisfied that the Court had before it on the ex parte motion through
the affidavits of Trehan, Parish and Archibald, sufficient evidence that a
number of retail establishments, at the time identified only in a general way
by city and unnumbered streets, were offering for sale unauthorized copies of
“3 Idiots”. The evidence later filed shows that, upon execution of the Order,
some unauthorized copies were seized.
[35]
There were
no documents seized, other than a few business cards and cash register slips.
No documents were recovered as to the source of such unauthorized copies. A
later filed affidavit identifies a mysterious and untraceable Mansur Samji as
the source of some of these copies. Inferences are raised that some shops may
make copies on the premises using computers located there but no hard evidence
to that effect was provided.
3. Have the Plaintiffs established a real
possibility that the Defendants may destroy such material before discovery?
[36]
The
evidence put before the Court on the ex parte application as to the
likelihood of destruction is largely set out in the affidavit of Sumit Chadha
referred to earlier (I will return to Trehan, Parish and Archibald later). The Chadha
affidavit is peculiar in this regard. It begins at paragraph 46 by stating
that, based on his experience at Reliance (some 3 years in the US) he has “come to learn” that certain
persons may destroy or hide evidence. He says:
46. Based upon my experience at Reliance
MediaWorks (USA) Inc. I have come to learn that persons engaged in the sale of
Counterfeit Recordings, including street market vendors, flea market vendors
and fixed location retail establishments, often move their operations on a
moment’s notice, and/or refuse to voluntarily identify themselves, and/or
destroy or hide evidence of their wrongful conduct, and/or destroy or hide
documents that might lead the Plaintiffs to the source of the Counterfeit Video
Records or to their supplier, if given notice of the intended proceedings.
[37]
I give no
weight to such a generalized statement. At paragraph 47 he gives hearsay
evidence from Trehan. Trehan provided his own affidavit in these proceedings
and could have said this himself. He did not.
47. I am advised by Tarun (Sunny) Trehan
and believe that many fixed location retail establishments are engaged in the
illicit sale of Counterfeit Recordings.
[38]
I give no
weight to this statement since Trehan gave evidence and did not say this
anywhere.
[39]
At
paragraphs 48 and 49 Chadha gives hearsay evidence based on information
received from Plaintiffs’ counsel Mr. Lipkus:
48. I am advised by Mr. Lipkus and
believe that the ever-changing and elusive practices engaged in by
counterfeiters transcend the venue from which they carry on their trade. This
position is sustainable when one considers the following examples of business
practices, undertaken, from time to time, by persons carrying on business at
fixed location retail establishments. I am advised by Lorne M. Lipkus and
believe that all of these examples were extracted from Affidavits filed with
this Honourable Court, and I believe each can be an indicator of impermanence
and risk of loss of evidence of counterfeiting:
a) business permits not at business
premises despite municipal by-laws mandating same;
b) incorrect or expired or previous
owners’ business permit on premises;
c) name on sign at the premises is
different from the name appearing on receipts given to customers and/or from
the name appearing on the business permit;
d) generic cash register receipt with no
reference to business name and/or no description of the item purchased;
e) cash register receipt fails to contain
GST number;
etc. etc.
49. I am informed by Mr. Lipkus and
believe that attempts are made from time to time to elicit the voluntary
surrender of counterfeit merchandise, including, Counterfeit Video Recordings
and the voluntary cessation of counterfeit activity. However, I am also
informed by Mr. Lipkus, and believe that often the counterfeiters he encounters
refuse to relinquish their rights to the counterfeit merchandise unless and
until they are served with an Anton Piller Order. Even those served with Anton
Piller Orders, from time to time, refuse to voluntarily surrender their
counterfeit merchandise and refuse to voluntarily permit a search of their
premises.
[40]
It is highly
improper for a Plaintiff’s own lawyer, whether directly, or through information
and belief adopted by another witness, to give evidence as to a contentious
matter in a proceeding such as this. This is particularly so where the evidence
is directed to an allegation that a person may hide or destroy evidence if
notice were given. I contrast this situation with that considered by Justice
Snider of this Court in Chum Limited v. Stempowicz, 2003 FCT 800 where
Mr. Lipkus himself provided his affidavit directed to similar points but a
different law firm and different counsel appeared for the parties.
[41]
As the
Supreme Court of Canada said in Celanese supra, a plaintiff and counsel
owe the highest degree of candour to the Court in matters of this kind in
seeking an ex parte order. As stated by Pelletier J. in Club Monaco supra at paragraph 7, point 1:
The affidavits should contain the personal knowledge of the
affiant as to the nature and extent of the problem as it relates to the
Plaintiff. It is, after all, the plaintiff's valuable property which it is
sought to protect. If the officers of the plaintiff are not in a position to
testify from their own personal knowledge as to the nature and extent of the
problem, doubts are raised as to the need for the remedy. While counsel who
habitually practice in this area no doubt acquire expertise and insight into
the practices of counterfeiters, the unusually heavy reliance upon information
provided by counsel which one often sees in these matters creates a risk of
putting counsel's credibility in issue. This detracts from the independence
which the Court is entitled to expect from counsel appearing before it.
[42]
Counsel
cannot avoid the issue by putting their opinions in the mouth of another
witness speaking on information and belief (Citifinancial Services of Canada
v. 1472354 Ontario Inc., 2003 Carswell Ont. 507 at para 4).
[43]
Rule 82 of
this Court precludes Counsel from arguing a matter in which Counsel’s own
affidavit is in evidence. The Rule has been relaxed but only in respect of
non-controversial matters. The Rule remains clear as stated by Pelletier J.A.
in Belmonte v. Syndicat des
débardeurs, 2004 FCA 141 at para 4:
4 The
rule is clear and based on a consistent principle of professional ethics:
counsel should not be the subject of the litigation himself. This rule is well
known and must be observed for the protection of clients, if not of counsel
himself. The Court finds that counsel's affidavit is inadmissible for purposes
of the motion for an extension of time.
[44]
I rule
that paragraphs 48 and 49 of the Chadha affidavit to be inadmissible. Even if
admissible I would give it no weight as nowhere is it provided as to how Mr.
Lipkus may have known about or gained expertise in such matters.
[45]
The final
paragraph of this Chadha affidavit, paragraph 50 is simply a conclusion based
on the previous paragraphs. I give it no weight.
[46]
Thus the
Plaintiffs have led no probative evidence that the defendants would be likely
to hide or destroy relevant documents or things.
[47]
Turning to
other evidence presented on the ex parte application, it consists of the
affidavits of three private investigators, Trehan, Parish and Archibald, who
visited several shops (only vaguely identified) and purchased unauthorized
copies of “3 Idiots” recordings. Nowhere is it alleged that the shopkeepers
were likely to hide or destroy such copies or other relevant materials.
[48]
In fact
the Plaintiffs’ evidence is to the contrary. The affidavit of Parish states
that he delivered a “cease and desist” letter (Exhibit A to his affidavit sworn
January 19, 2010) to a number of parties. His later affidavit identifies such
parties so as to include many of the Affected Defendants. That letter, although
not drafted with the skill of one practicing in the copyright area, requests
that the recipient immediately cease selling “3 Idiots” unauthorized copies and
preserve copies and relevant materials. In other words notice had already
been given to many of the Affected Defendants as well as others.
[49]
The
evidence presented on the review indicates that after execution of the Order
some of the Affected Defendants had unauthorized copies of “3 Idiots” for sale,
others did not. There is no evidence that after the notice, any relevant
copies of material had been hidden or destroyed.
[50]
The
Plaintiffs’ evidence in this respect, particularly since it is directed to a
state of mind or propensity to hide or destroy relevant documents and materials
is woefully inadequate. At best it is careless, inadequate and a slipshod
attempt to secure an Order whose real purpose is, and I am quoting a word used
by the Plaintiffs’ Counsel in argument before me, to “target” small
shopkeepers. I view this as an abuse of the process of this Court. At worst it
was an attempt to induce this Court to issue an Order for which there was no
foundation.
4. Have the Plaintiffs provided a proper
basis for a “John Doe” proceeding?
[51]
The
“rolling” Anton Piller Order was granted in an action commenced by filing a Statement
of Claim which does not name any particular defendant. They are identified in
the style of cause as follows:
JOHN
DOE AND JANE DOE AND OTHER PERSONS, NAMES UNKNOWN,
WHO
DEAL IN COUNTERFEIT VIDEO RECORDINGS,
AND
OTHER PERSONS LISTED IN SCHEDULE "A" TO THE STATEMENT OF CLAIM
[52]
Schedule
“A” as it appears in the Statement of Claim as filed is simply a blank form,
presumably to be filled in later with the names of persons identified and added
pursuant to a subsequent Court Order. As such the Statement of Claim follows an
established practice developed in this Court for actions of this kind.
[53]
The
Statement of Claim, as filed January 20, 2010, refers to the Defendants only in
the following way:
5. The Defendants, John Doe and Jane Doe
are persons whose names and identities are presently unknown to the Plaintiffs,
who deal in Counterfeit Video Recordings.
[54]
This
allegation, having regard to the evidence before the Court, is untrue. As of
January 20, 2010 a number of persons and corporations said to deal in
Counterfeit Videos were in fact known to the Plaintiffs. The affidavits of
Trehan and Parish speak of a number of retailers whose identity they were
“specifically not disclosing” at that time. Later affidavits of those persons
disclose that visits were made to those premises late in December and very
early in January. The affidavit of Archibald discloses specific street
addresses of premises he visited. The later of affidavits of these persons
reveal that further information by way of corporate searches and the like, if
required, was readily available.
[55]
While the
identity of all persons possibly dealing with Counterfeit Videos was not known,
a great many persons were and could be identified. Mason J. of the Alberta
Court of Queen’s Bench addressed the “John Doe” situation in Brochner v.
MacDonald (1987), 56 Alta. L.R. (2d) 72, 22 C.P.C. (2d) 4 and wrote:
The replacement of John Doe as a Defendant by Dr. Anderson
is permissible only in the case of misnomer as that principle has been defined at
law. This is not a case of misnomer.
The traditional procedure of suing John Doe as the
unknown or unidentified person in a cause of action has long been accepted by
the courts of this province as it has by the courts in other provinces of
Canada where the person is real and is alleged to be part of the incident or
transaction giving rise to the claim. A brief history of this traditional
procedure is provided by Mr. Justice Bull of the British Columbia Court of Appeal in
the case of Jackson v. Bubela 29 D.L.R. (3d) 500
at 502. See also Golden Eagle Liberia Limited and Westchester Marine Shipping
Co. v. International Organization of Masters, Mates and Pilots, Marine
Division, International Longshoremen's Association A.F.L.-C.I.O. et al (1974) 5 W.W.R. p. 49
and Dukoff et al v. Toronto General Hospital et al 54 O.R. (2d) p. 58
at 61 and following.
An examination of the Statement of Claim reveals no
action pleaded against a real person whose identity is or was for good reason
unknown or unavailable to the Plaintiff. While the Statement of Claim names
John Doe as a Defendant, he is not mentioned in any of the allegations set out
in the Statement of Claim.
At its best reading, the Statement of Claim refers only to
the Defendant Dr. Malcolm MacDonald and the Defendant Hospital. Allegations of
negligence and failure to use reasonable care are made only against those two
named Defendants.
The Plaintiff has, in paragraph 17 of the Statement of
Claim, purported to reserve a right to add further particulars of negligence
against "the said Defendants" in the following terms:
“17. The Plaintiff states
that he is unable to give at this stage further particulars of negligence on
the part of the Defendants, as the same are solely within the knowledge of the
said Defendants and the Plaintiff reserves the right to add such further
particulars of negligence as may be necessary."
I am of the opinion that this reservation cannot possibly
be used to bootstrap Dr. Anderson into the proceedings after the expiration of
the limitation period as the real John Doe in these proceedings.
The long established rule with respect to misnomer is
stated in Davies v. Elsby Brothers Ltd. (1960) 3 All E.R. 672. That case states
that the proper test to be applied in cases of determining whether or not there
has been a misnomer is to ask the question - would a reasonable person reading
the document understand that he is the person referred to therein but wrongly
named or named under a psuedonym? If so, it is a matter of misnomer and the
court will permit amendment of the pleadings in order to properly identify the
party. If such is not the case, the rule is that it is not a case of misnomer
but simply an attempt to introduce a new party by way of addition or
substitution.
[56]
The fact
that a number of defendants were known before the action was commenced and
before the ex parte Order was sought, coupled with the fact that those
persons had already been put on notice is yet another reason why this action
and the resulting “rolling” Anton Piller Order is inappropriate.
5. Have the interests of justice been
brought into disrepute?
[57]
From what
has already been written it is clear that there was no proper foundation for
the Anton Piller Order and that such an Order was inappropriate. The evidence
was, in many respects, as discussed, careless, inadequate or misleading. The
real purpose appears to have been to obtain an Order that would allow the
Plaintiffs, through solicitors and other agents, to “target” certain persons
selling what are described as “Counterfeit” Videos. In this case simply small
shopkeepers.
SUMMARY AND REMEDIES
[58]
In
summary, having reviewed the ex parte Anton Piller Order, it cannot
stand and must be set aside. There is insufficient evidence as to “serious
damage” and no proper proof that the defendants would be likely to hide or
destroy relevant documents or things. Further, since many potential defendants
were known prior to the institution of the action, there was improper use of
the “John Doe” process as well as a deliberate misleading statement made in
paragraph 5 of the Statement of Claim.
[59]
The Anton
Piller Order in respect of the Affected Defendants must be set aside. Further,
because of the misuse of the “John Doe” process the action against the Affected
Defendants must be dismissed. This does not mean that a new action,
specifically naming one or more of such Defendants could not be instituted, it
can, however it would be improper to use the fruits of an improper Anton Piller
Order to base such an action. Other evidence, if available, must be used.
[60]
The Copyright
Act supra is among the most generous of any intellectual property statute
in Canada or elsewhere in providing for
rights and remedies. Copyright subsists without the necessity for registration
and is presumed in the absence of evidence to the contrary. Registration is
cheap and easy and provides presumptive evidence as to copyright subsistence
and ownership. Proceedings can be quickly brought as an application rather than
an action. Damages can either be proved or an election to take statutory damages
made. An injunction can extend to works not specifically put in issue. Allegedly
infringing works can be taken into interim and final custody. An Anton Piller
Order must be considered as an exceptional remedy to be used with caution and
respect. It should not be considered as routine where so many other remedies
and procedures are available.
[61]
Given the
manner in which the ex parte Order was obtained, including the
insufficient, careless and misleading evidence as already discussed, it is appropriate
to award the Affected Defendants their reasonable costs on a full indemnity
basis.
ORDER
FOR THE REASONS PROVIDED
HEREIN:
THE COURT ORDERS THAT:
1.
The Anton
Piller Order granted January 26, 2010 herein is hereby set aside as against the
following named Defendants, hereinafter the Affected Defendants:
·
1557768
Ontario Inc. o/a Golumbia Video
·
Arangesan
Paramsothy
·
1691731
Ontario Inc. o/a Bollywood 4 U
·
Abulsama
Jibhai
·
2148409
Ontario Inc. o/a Video Station
·
Kulwant
Kaur Singh
·
215151872
Ontario Inc. o/a Singh Video Station
·
Mohan
Singh
·
2031221
Ontario Inc. o/a Old Karachi Bazar
·
Royal Paan
Inc.
·
Neerad
Upadhyay
·
Anmol
Records Inc.
·
Rajesh
Syal
·
2122308
Ontario Inc. o/a Albion Audio & Video
·
Kulbir
Singh Mokha
2.
This
action as against the Affected Defendants is dismissed without prejudice to the
right of the Plaintiffs to bring a further action based on evidence of alleged
infringement other than the evidence of alleged infringement presented herein in
respect of the original Anton Piller Order or the review thereof;
3.
The Affected
Defendants are entitled to their reasonable costs on a full indemnity basis;
4.
Tayyabi
Huma shall not be a named Defendant in this action and any proceedings as may
involve her herein are dismissed. She represents herself and cannot recover a
lawyer’s costs but is entitled to recover her out-of-pocket disbursements. If
she chooses not to tax such disbursements I award her the sum of $250.00.
"Roger T. Hughes"
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