Date: 20060802
Docket: T-764-06
Citation: 2006
FC 948
OTTAWA, ONTARIO, August 2, 2006
PRESENT: The
Honourable Mr. Justice von Finckenstein
BETWEEN:
AYNGARAN INTERNATIONAL
VIDEO & AUDIO INC.
Plaintiff
- and -
UNIVERSAL DVD INC., JEYA AND BROTHERS
LTD.,
PHOTO FAST LTD., ELANTHULIR VIDEO INC.,
MURUGAN BOOK DEPOT INC.,
SIVANANTHAN KUNASINGAM CARRYING ON
BUSINESS AS LOVELY
DIGITAL MOVIES, LOVELY DIGITAL MOVIES
INC., JEYANESAN ETHIRVEERASINGAM CARRYING ON BUSINESS AS LIONERS VIDEO
VISION, 1650045 ONTARIO INC. CARRYING ON
BUSINESS AS YAL
MARKET,
1200251 ONTARIO LTD. CARRYING ON BUSINESS
AS UTHAYAS SUPER
MARKET, UTHAYAS SUPERMARKET LTD.,
RUBAN THANGARASA CARRYING ON BUSINESS AS
NANTHA VIDEO,
1360674 ONTARIO INC. CARRYING ON BUSINESS
AS NEW SPICELAND
SUPERMARKET, YARLTON INC., KUMARANS INC.,
MARKHAM VIDEO
CENTRE LTD., RASIAH ARULANANTHAM CARRYING
ON BUSINESS AS
PRIYA VIDEO,
THE PARTY OR PARTIES WHO CARRY ON
BUSINESS WITH THE
UNREGISTERED BUSINESS NAMES OF: A.K.
VIDEO, V.I.P. VIDEO,
ARROWIN VIDEO, SHRI & BROTHERS,
NALLUR VIDEO CENTRE,
R.K.S. SALON & VIDEO;
AND OTHER PERSONS, NAMES UNKNOWN, WHO
OFFER FOR SALE, SELL,
IMPORT, MANUFACTURE, DISTRIBUTE,
ADVERTISE, OR DEAL IN THE
PLAINTIFF’S WORKS AND THE PERSONS LISTED
IN SCHEDULE “A” TO THE
STATEMENT OF CLAIM
Defendants
REASONS FOR ORDER AND ORDER
[1]
This is an
application for a review of the execution of the Anton Piller Order issued by
Justice de Montigny on May 18, 2006.
[2]
The
Plaintiff is an Ontario corporation who acquired the
copyright for numerous dramatic cinematographic works. The Plaintiff imports
and sells dramatic cinematographic works. It buys the exclusive Canadian
rights to Tamil language films and, via its retail store, sells DVD copies to
the public for private home viewing.
[3]
On May 4,
2006, the Plaintiff filed a Statement of Claim against 23 named Defendants
alleging they were infringing the Plaintiff’s copyright in motion pictures of
which 24 have been itemised. The Plaintiff is seeking by way of relief the
following:
1.
a
declaration that the unauthorized copying, selling, renting or public showing
or exhibition of the 24 motion pictures listed are an infringement of the Copyright
Act, R.S.C. 1985, c. C-42;
2.
a declaration that the
Plaintiff is the lawful exclusive commercial distributor of the Plaintiff’s
works;
3.
an injunction against the defendants;
4.
damages in
the amount of $20,000 for each infringement;
5.
punitive
damages;
6.
an
accounting of profits;
7.
statutory
damages per s. 38.1 of the Copyright Act;
8.
an order to
disclose revenues; and
9.
an order
that all materials be delivered to the Plaintiff.
[4]
On May 18,
2006, Justice de Montigny issued an Anton Piller Order that became effective
against each of the Defendants from the day it is served and was to remain in
effect for 14 days after service of the Order. The Order could be served and
executed anywhere in the Province of Ontario for 12 months after the date of issue. Justice de Montigny also
issued an order restraining each Defendant from “offering for sale, displaying,
advertising, selling, manufacturing, distributing, or otherwise dealing in the
Plaintiff’s works”.
[5]
It is
undisputed that the Order was executed against the following seven Defendants
on May 25th and 27th: Universal DVD Inc., Jeya and
Brothers Ltd., Lovely Digital Movies Inc., Photo Fast Ltd., 1360674 Ontario Inc
c.o.b. as New Spiceland Supermarket, 6161235 Canada Inc. c.o.b. Kumar Video, and
Shri & Brothers.
[6]
The
Plaintiff now brings a motion and requests an Order:
1.
reviewing
the granting and execution of the May 18, 2006 Order;
2.
directing the disposition of
the DVD’s and equipment seized pursuant to the Anton Piller Order;
3.
enjoining the defendants
from dealing in the Plaintiff’s works until a final Order is made in respect of
the Plaintiff’s claim;
4.
adding such names as may be
necessary to Schedule A of the Statement of Claim; and
5.
requiring the Defendants to
pay the Plaintiff’s costs of the May 15, 2006 motion (Anton Piller Motion) and
this motion, on a full indemnity basis.
[7]
The Defendants
are seeking to have the Order vacated alleging in essence that:
1.
there was
not full and sufficient disclosure by the Plaintiff when executing the Order;
and
2.
the Order
was not properly executed.
Analysis
Procedural issues
[8]
The Defendant
made two procedural objections:
1.
there is
no affidavit of the attending solicitor; and
2.
counsel
for the plaintiff is the same person who filed two of the six solicitors
reports.
[9]
In my view,
both of these objections are well founded. The Order of Justice de Montigny
specified in paragraph 21:
A motion for review of the
execution of this Order and its further continuation shall be supported by an
affidavit from the attending and supervising solicitor setting out a full and
accurate report of the execution or executions under review, including any
execution with respect to which the Defendant’s identify was not ascertained,
and including a full description of all goods, equipment and records seized as
described in paragraph 14.
[10]
No
affidavit from the attending and supervising solicitor was furnished. Instead,
the motion record contains seven documents entitled “solicitor’s report” which
are signed by either Mr. Russ Makepeace or Mr. Michael Romoff, both of whom
have appeared before the Court as counsel for the Plaintiff. Mr. Romoff argued
the review before me.
[11]
It is trite
law that Anton Piller Orders are exceptional instruments and require strict
compliance with its terms. In the original decision of Anton Piller K.G. v.
Manufacturing Process Ltd, [1976] 1 Ch. 55 all three judges of the Court of
Appeal made that point. Lord Denning said at page 61:
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 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 with 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.
Lord Ormrod stated at page 61:
I agree with all that
Lord Denning M.R. has said. The proposed order is at the extremity of this
court's powers. Such orders, therefore, will rarely be made, and only when
there is no alternative way of ensuring that justice is done to the applicant.
and Lord Shaw added at page 62:
The overriding
consideration in the exercise of this salutary jurisdiction is that it is to be
resorted to only in circumstances where the normal processes of the law would
be rendered nugatory if some immediate and effective measure was not available.
When such an order is made, the party who has procured the court to make it
must act with prudence and caution in pursuance of it.
[12]
On review
as to the propriety of the Order and its execution, the Court requires
affidavit evidence from a solicitor so that it can be satisfied that this
extraordinary remedy was properly executed. In the United Kingdom, the
affidavit needs to be from a solicitor, other than the Plaintiff’s solicitor;
however, no such requirement exists in Canada. Justice Reed commented on this issue
in Nike Canada Ltd. v. Jane Doe (1999), 174 F.T.R. 131 at paragraph 19:
I accept that the
proliferation of counterfeit goods is a serious problem for intellectual
property rights owners such as the plaintiffs. I agree that it was because of
the seriousness of this problem that this Court developed rolling Anton Piller
orders. I remain concerned, however, that there may be insufficient checks in
existence to ensure that abuses do not occur - not all of the defendants
against whom searches and seizures were conducted were carrying on business in
an "evanescent and surreptitious manner". I note, for example, that
in the United
Kingdom when
specific Anton Piller orders are granted, it is a solicitor other than the
plaintiff's solicitor who attends on the execution of the order. It is not
clear that rolling Anton Piller orders, as opposed to specific ones, are
granted in that jurisdiction. I am of the view that it would be preferable if
Anton Piller orders were not granted except on condition that the plaintiff
paid for a supervising solicitor or amicus curiae of the Court's choosing, who
could both monitor the plaintiff's execution of these orders as well as be
independent of the plaintiff's interests. In any event, I do not dispute
counsel for the plaintiffs assertion that counterfeiting is a serious problem
and the Court should lend its support to addressing that problem.
[13]
Without
that affidavit, on which there may very well be extensive cross-examination,
the Court has no way of ascertaining the manner in which the Order was executed
and what was seized.
[14]
The Plaintiff
asserts that, in this case, the affidavits from the interpreter, an officer of
the Plaintiff, an accompanying police officer, and from an individual who
assisted in the execution of the Order whose affidavit made reference to the solicitor’s
report, should suffice to inform this Court.
[15]
I cannot
accept such explanation, given the extraordinary nature of the remedy sought
and given the specific requirement for the solicitor’s affidavit in Justice de
Montigny’s Order. There is no direct evidence before the Court as to what was
seized in the execution of the Anton Piller Order. There is only indirect
evidence found in the affidavit of Bo Huang where he references the solicitor’s
reports. The failure to file a solicitor’s affidavit constitutes a fatal flaw
to this application.
[16]
As there
is controversy as to what occurred during the execution of the Orders, I also
do not see how Mr. Romoff can argue the motion with respect to two of the Defendants
on the basis of his own report (assuming the Court was prepared to treat the
report as tantamount to an affidavit). It is a basic rule of law that a person
cannot be counsel and give evidence at the same time. In cases where the
evidence is being contested (as in this case) the Court will not allow counsel
to make submissions on evidence furnished by counsel (see Cross-Canada Auto
Body Supply (Windsor) Ltd. v. Hyundai Auto Canada, a division of Hyundai Motor
America, 2006 FCA 133).
[17]
Accordingly,
based on these procedural flaws the Order cannot be sustained. However, should
I be wrong in respect of this finding I also found the Order to be deficient
for substantial reasons.
Substantial issues
[18]
In Netbored
Inc. v. Avery Holdings Inc., 2005 FC 1405, which is considered to be the
leading case on review of Anton Piller Orders, Justice Hughes established the
five criteria that the Court should use to determine whether an Anton Piller Order
should continue to be in force or be vacated. These can be summarized as
follows:
1.
The Plaintiff
must show an extremely strong prima facie case;
2.
Damage, potential or actual, must be very serious for the
applicant;
3.
There must be clear and convincing evidence that the Defendants
have in their possession incriminating documents and that there is a real
possibility that they may destroy such material before an application inter
partes could be made;
4.
The inspection would do no real harm to the Defendant or his
case; and
5.
Whether full and frank disclosure of all relevant facts was made
to the judge granting the Order.
[19]
A strong prima
facie case, in the circumstances of this case, requires the Plaintiff to establish
good title to the goods in question and that the actions of the Defendants
amount to breach of copyright.
[20]
The Plaintiff
never registered the copyright to the 24 films in question in Canada. Instead, the affidavit of
Nithiyaluxmy Mathysoody, sole shareholder and officer of the Plaintiff,
establishes a chain of title regarding the copyright for all 24 films from the
original producer. In some cases it is from the original producer to an Indian
intermediary to Ayngaran International Films PVT Limited (“Ayngaran India”) and then to the Plaintiff. In others,
it is from the producer direct to Ayngaran India and then to the Plaintiff.
[21]
If we look
at one film, AATHI, the following discrepancies in the chain of title appear:
1.
The rights
assigned by the producer, Sooriyan Arts, to Ayngaran India make no reference to the copyright in CD
format (see M.R. p.47 schedule ‘C’). On the other hand, the assignment from
Ayngaran India to the Plaintiff specifically
includes copyrights in CD format (see M.R. p. 23 schedule B).
2.
The
assignment from Sooriyan Arts to Ayngaran India provides that any VCD, DVD or
LD of the picture will only be released 100 days from the release in India (see
M.R. p. 46 para 13). On the other hand, the assignment from Ayngaran India to the Plaintiff provides that the
period of assignment subsists for the period of 10 years from the date of
general release in India (see M.R. p. 43 schedule F). No
mention of the 100 days delay is made. In addition, the assignment from
Sooriyan Arts to Ayngaran India indicates that the expected release date for India is January 2006 (see M.R. p. 46 schedule
A). The assignment from Ayngaran India
to the Plaintiff is dated January 25, 2006 and there is nothing to indicate
that it did not take effect as of that date.
[22]
I only use
the film Aathi as an example. The same type of inconsistencies can be found in other
films all of which are set out in detail in the Defendants’ memorandum of fact
and law.
[23]
It is not
for me to determine at this point whether these inconsistencies impair the Plaintiff’s
title. However, it is up to the Plaintiff to establish that it has a strong prima
facie case. It has failed to do this. Rather on the face of it, the title
is prima facie not free from doubt.
[24]
Accordingly,
I fail to see how it can be held that the Plaintiff has established a strong prima
facie case in terms of title.
Conclusion
[25]
For the
reasons quoted above, both on procedural and substantive grounds, I find that the
Plaintiff’s application must fail. I hasten to add, however, that I have in no
way accepted the Defendants’ explanation that they were authorized to make
copies of the films in question by one Ganesh (no first name nor any address or
phone number has been provided for this individual), allegedly an employee of
the Plaintiff. The Plaintiff claims not to know or to have employed Ganesh.
[26]
Nothing
herein shall be taken as restricting the Plaintiff from applying for another
Anton Piller Order or from proceeding with its action for copyright against the
Defendants. Costs for this application to follow the cause.
[27]
Given that
I find the Defendants’ explanation (that an employee of the Plaintiff called
Ganesh, whom no one can produce, allegedly authorized the copying of videos and
CD’s) devoid of plausibility, I will delay the return of the goods seized until
September 1, 2006 to give the Plaintiff an opportunity to remedy the
substantive and procedural defects above mentioned and to bring another
application for an Anton Piller Order.
ORDER
THIS COURT ORDERS that the Anton Piller Order
granted on May 18, 2006 is vacated and costs for this application are to follow
the cause. The goods seized are to be returned to the Defendants no earlier
than September 1, 2006.
“Konrad
W. von Finckenstein”
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