Date: 20050907
Docket: T-1323-04
Citation: 2005 FC 1214
Ottawa, Ontario, September 7, 2005
Present: The Honourable Mr. Justice Martineau
BETWEEN:
BRILLIANT TRADING INC.
Plaintiff
- and -
TUNG WAI WONG and
ZHEN HING ENTERPRISE LTD.
Defendants
REASONS FOR ORDER AND ORDER
[1] This is a hearing for contempt pursuant to show cause orders respectively issued by Mr. Justice Rouleau on October 4, 2004 and Prothonotary Hargrave on April 4, 2005.
[2] The Plaintiff, Brilliant Trading Inc., seeks an order finding the Defendants Tung Wai Wong and Zhen Hing Enterprise Ltd. (Zhen) in contempt of the Order of Mr. Justice Gibson dated September 20, 2004 (the Order).
[3] The same was issued on a motion for default judgment in a trademark infringement action whereby the Defendants were found to have infringed the Plaintiff's trademark registration TMA463981. The Defendants were also found to have directed public attention to their wares and business in such a way as to cause or be likely to cause confusion in Canada at the time they commenced so to direct attention to them, between the wares and business of the Plaintiff and that of the Defendants. Those actions are contrary to paragraph 7(b) and section 20 of the Trade-Marks Act, R.S.C. 1985, c. T-13 (the Act).
[4] The injunctive part of the Order provided, so far as it is relevant here, as follows:
3. The Defendant Tung Wai Wong is enjoined from using, advertising, marketing, or selling wares associated with the trademark consisting of the Chinese characters design transliterated as "GAH GAH BOH" or any other trademark or trade name that is confusingly similar to the Plaintiff's registered trademark, including but not limited to the trademark consisting of the Chinese characters design transliterated as "GAH BOH", and from further directing public attention to his wares and business in a manner likely to cause confusion between his wares and business and that of the Plaintiff;
...
5. The Defendant Zhen Hing Enterprise Ltd., its officers, directors, employees, agents, and all those over whom it exercises control is enjoined from using, advertising, marketing, or selling wares associated with the trademark consisting of the Chinese characters design transliterated as "GAH GAH BOH" or any other trademark or trade name that is confusingly similar to the Plaintiff's registered trademark, including but not limited to the trademark consisting of the Chinese characters design transliterated as "GAH BOH", and from further directing public attention to their wares and business in a manner likely to cause confusion between their wares and business and that of the Plaintiff;
6. The Defendants shall, within 20 days of the date of service on them of this Order, deliver up to the Plaintiff any kitchen range hoods, rice cookers, slow cookers, kettles, and any packaging, promotional material, documents (in any medium), or other material as may offend the injunctions in paragraphs 3 to 5 hereof and that are in the possession, custody, or control of the Defendants; ...
[5] It is now alleged by the Plaintiff that the Defendants continued to advertise, offer for sale and sell products bearing an infringing trademark in contravention of the injunctive terms of the Order. In addition, it is alleged that the Defendants failed to deliver up all infringing products and material to the Plaintiff within 20 days of the service of the Order in contravention of same.
[6] The matter was heard on August 9, 2005 in Vancouver. Counsel appeared for the Plaintiff. Mr. Wong, who has chosen to represent himself lately, was granted leave to act as representative of Zhen. Indeed, he confirmed at the hearing that he acts as president, secretary and sole director of Zhen (which also appears on the corporate search document filed as Exhibit P-10), which he entirely owns.
[7] As there was no agreement between the parties on essential facts, the Plaintiff called as witnesses Messrs. Peter Yeung, David Marr and Lawrence Chan, while Mr. Wong testified on behalf of himself and Zhen. An interpreter assisted Mr. Wong throughout the hearing. The following facts were established through the Plaintiff's witnesses whom I find, in all respects, credible and trustworthy.
THE EVIDENCE
[8] Peter Yeung is the managing director of the Plaintiff. He explained at the hearing that the Plaintiff is in the business of importing, distributing and selling various home appliances including kitchen range hoods, rice cookers and electric tea kettles. One of the Plaintiff's trademarks is the Chinese character trademark transliterated as "GAH GAH BOH" (the Trademark) used by the Plaintiff in Canada since 1996.
[9] Mr. Wong was an employee at Practical Plumbing and Hardware (Practical), an appliance and hardware business which was run by Mr. Yeung, in Vancouver's Chinatown from about 1996 to 1999. Mr. Wong, whose first name in English is Tony, was working there as a salesman. Mr. Wong was familiar with the Plaintiff's GAH GAH BOH products which were sold at the store. In the latter case, all the instructions of the products sold in the store are written in English. While many customers were Chinese (Mr. Wong speaks Cantonese), there were also many tourists who came to the store. Mr. Yeung saw Mr. Wong giving directions in English to customers and also helping them with the products. Despite the fact that Mr. Wong would want this Court to believe that he can hardly read or speak English, I prefer Mr. Yeung's testimony that Mr. Wong is able to communicate with customers in English and that he also reads English. I also note that Mr. Wong, who has been in Canada since 1995, admitted during his cross-examination that he had successfully passed his English tests and was accepted as a Canadian citizen in 2003. Moreover, Mr. Wong, who is an educated man, admitted during his cross-examination that, in the course of doing business, he will have to handle or sign a number of documents written in English (such as bills of lading, corporate resolutions, etc.).
[10] Mr. Yeung testified that besides working at Practical's premises during this period, Mr. Wong also worked at the Plaintiff's own premises unloading the containers and packing the shipments. After leaving the employment of Practical, Mr. Wong began his own appliance and hardware business under the name of "Universal Hardware and Appliance " (Universal) located at 221 East Georgia Street, Vancouver. Mr. Wong then approached both the Plaintiff's Chinese manufacturer directly and Mr. Yeung with an offer to purchase GAH GAH BOH range hoods for resale in Canada. Both declined to sell to Mr. Wong or to his company. Mr. Wong threatened to cut off the Plaintiff's supply of range hood motors if the GAH GAH BOH range hoods were not sold to him. Mr. Wong then arranged, sometime in 2004, for the acquisition and importation in Canada by Zhen of range hoods bearing the Chinese character trademark transliterated as "GAH BOH" (the Infringing Trademark) for resale at Universal. Mr. Lawrence Chan, an associate at Paul Smith Intellectual Property Law, testified that following a search made at the City of Vancouver Business License Department, he found out that the business license of Universal is registered to Zhen.
[11] A cease-and-desist letter was sent by the solicitors for the Plaintiff to Mr. Wong on May 3, 2004. After dispatch of the cease-and-desist letter, Mr. Wong confirmed receipt of the letter and told Mr. Yeung that if Mr. Yeung sued, Mr. Yeung might be killed the next time he visited China. A further cease-and-desist letter was sent by the solicitors for the Plaintiff to Mr. Wong on May 26, 2004. Two days later, Mr. Wong phoned Mr. Yeung and made reference to a traffic accident in Vancouver's Chinatown pretending to act surprised that it was not Mr. Yeung who had been involved.
[12] This action was commenced in July 2004. The Defendants failed to file a Statement of Defence and Mr. Justice Gibson granted default judgment to the Plaintiff on September 20, 2004. As part of the default judgment order, the Defendants were enjoined from selling and offering to sell any wares bearing the Infringement Trademark and were ordered to deliver all infringing wares and documents within 20 days of the service of the Order. Mr. Wong, both in his personal capacity and in his capacity as the president, secretary and sole director of Zhen, was personally served by Mr. Chan with a copy of Mr. Justice Gibson's default judgment order on September 23, 2004 in an alleyway between Keefer and Georgia streets. This alleyway opens up to Georgia Street and opens up close to where Universal is located. As they were proceeding down the alleyway, they saw Mr. Wong coming toward them down the alley. Mr. Yeung and Mr. Geoffrey Tsang were accompanying Mr. Chan and helped him to identify Mr. Wong. At the time of service, Mr. Wong was advised by Mr. Tsang, in Cantonese, that the documents he was being served with were court documents. Mr. Wong took the documents and started to walk away. Mr. Chan testified at this hearing that he started to try to explain the terms of the Order but Mr. Wong walked away, got into his car and drove off.
[13] Despite this and further warnings from the solicitors for the Plaintiff, the Defendants continued to sell and offer to sell products bearing the Infringing Trademark. On October 1, 2004 Mr. David Marr, a friend of Mr. Yeung who taught him his trade 15 years ago, visited (at Mr. Yeung's request) the Defendants' store, Universal, and saw rice cookers and range hoods bearing the Infringing Trademark on sale. He also purchased a rice cooker bearing the Infringing Trademark which was produced at the hearing together with the receipt of purchase (Exhibits P-8 and P-9). The Defendants also advertised products bearing the Infringing Trademark on at least two occasions, on October 2, 2004 and January 1, 2005, in publications (Sing Tao newspaper and Sing Tao Weekly magazine: Exhibits P-6 and P-7). Furthermore, the Defendants failed to deliver up all infringing products and material within the 20-day deadline mandated by the Order.
[14] In his defence, Mr. Wong explained that when it comes to doing his business in English, he receives a lot of flyers and ads which he will simply put aside. When it comes to correspondence, and this includes, in Mr. Wong's own admission, legal correspondence coming from the Plaintiff's law firm, if it does not say "Important Document" or if it is not a registered letter, he would just treat it as a flyer and set it aside. However, despite any difficulty he may encounter with reading or speaking English, Mr. Wong testified that when it comes to filling out tax returns and corporate declarations, applying for licenses or otherwise completing banking and other business documents which need to be written in English, he will have them reviewed or prepared in English by his accountant or another member of his staff. Besides, Mr. Wong also testified that from October 2 to November 4, 2004 he was in China. Accordingly, Mr. Wong asserts that it was only after he came back from China and after all infringing products imported through Zhen in Canada and sold at Universal were seized, that he decided to consult a lawyer and found out that the Defendants were infringing the Plaintiff's trademark registration and not complying with the Order.
THE LAW
[15] Subsection 466(b) of the Federal Court Rules, 1998, SOR/98-106 (the Rules) provides that a person is guilty of contempt of court "who disobeys a process or order of the Court". In the case at a bar, the Defendants were under an obligation to take effective steps to secure full compliance with the order, including causing any advertisements to be discontinued (Dimatt Investments Inc. v. Presidio Clothing Inc. (1993), 48 C.P.R. (3d) 46 (F.C.T.D.)). Court orders are to be followed strictly. Any failure to do so interferes with the orderly administration of justice and impairs the authority or dignity of the Court (Dimatt Investments Inc. v. Presidio Clothing Inc., supra). A finding of contempt shall be based on proof beyond a reasonable doubt (section 469 of the Rules). That being said, the requisite elements of contempt are knowledge of a court order and a failure to comply with that order (Lifegear, Inc. v. Urus Industrial Corp., 2004 FC 21; [2004] F.C.J. No. 19 (F.C.) (QL) at para. 24). In this regard, a party's knowledge of a court order may be shown by personal service of that order (Coca-Cola Ltd. v. Pardhan (c.o.b. Universal Exporters), [1999] F.C.J. No. 1764 (F.C.T.D.) (QL) at para. 20; Desnoes & Geddes Ltd. v. Hart Breweries Ltd. (2002), 17 C.P.R. (4th) 20 at para. 21(F.C.T.D.). On another note, the lack of mens rea or the presence of good faith are relevant only to the question of penalty. The lack of contumacious intent is not a defence to a finding of contempt (Merck & Co. v. Apotex Inc. (2003), 25 C.P.R. (4th) 289 (F.C.A.) at paras. 55-56; Tele-Direct (Publications) Inc. v. Canadian Business Online Inc., [1998] F.C.J. No. 1306 (F.C.T.D.) (QL) at para. 20). That being said, evidence of good faith may be a relevant element to consider when it comes to imposing the appropriate sentence. This latter factor has to be weighted with other factors. Deterrence, both general and specific is an important factor in sentencing (Merck & Co. v. Apotex Inc., supra, at paras. 82-84 and cases cited in these paragraphs).
FINDING OF CONTEMPT AND SENTENCE
[16] I find that the Defendants' continued offering for sale of the range hoods and rice cookers and their sale of the rice cookers bearing the Infringing Trademark, as well as their continued advertising of products bearing the Infringing Trademark is a clear violation of Mr. Justice Gibson's default judgment order. I also find that the Defendants' failure to deliver up all infringing products and material within the 20-day deadline mandated by the Order also constitutes a clear violation of same. These findings are based on proof beyond a reasonable doubt.
[17] Mr. Wong's willful blindness and his disregard for court documents are not a defence to contempt (Canada (Minister of National Revenue - M.N.R.) v. Iwaschuk, 2004 FC 1602; [2004] F.C.J. No. 1953 (T.D.) (QL) at paras. 12-14). I find his testimony not credible and I dismiss his explanations for not having complied with the Order. Before his departure to China sometime in October 2004, he should have ensured himself that the Order would be respected. In the present case, the Order was personally served on Mr. Wong on September 23, 2004 on behalf of himself and Zhen. Mr. Wong was further told in Cantonese that the served documents were "court documents". The Defendants have made no effort to comply with the Order. Indeed, I find that Mr. Wong's actions, before and after these proceedings were commenced, show a complete disregard for this Court's process. He appeared to show no interest in the proceedings and took no steps to ensure compliance with the Order until the infringing products were actually seized. Even after the seizure, he took no steps whatsoever to inform the newspapers that the infringing products should no longer be advertised.
[18] Moreover, throughout this hearing, the Defendants have shown no regret and have offered no excuse. Quite the contrary, Mr. Wong who threatened Mr. Yeung if he sued him, asserts that, as a newcomer to Canada, he is powerless. Indeed, he now accuses the Plaintiff, together with the law firm representing the Plaintiff, to have hidden facts and created evidence. These allegations are totally gratuitous and unfounded and cast serious doubts as to whether the Defendants actually intend to amend themselves in the future.
[19] Therefore, taking into account the threats made by Mr. Wong, the complete disregard by the Defendants of the legal and court process and all other relevant factors, I find that a fine of $10,000, assessed jointly against the Defendants, is appropriate in these circumstances.
COSTS
[20] The Plaintiff seeks costs on a solicitor-client basis. The well-established practice is to do so, as a party prosecuting the contempt to ensure compliance with a court order should not be required to bear the costs of doing so (Merck & Co. v. Apotex Inc., supra, at paras. 93-94; Dimatt Investments Inc. v. Presidio Clothing Inc., supra). There is no reason here to depart from this practice.
ORDER
THIS COURT ORDERS that:
1. The Defendants are guilty of contempt of court, as it has been found by this Court, beyond a reasonable doubt:
(a) that the Defendants did, having been duly served with the Order of Mr. Justice Gibson dated September 20, 2004 fail to thereafter cease using, advertising, marketing, or selling wares associated with the trademark consisting of the Chinese characters design transliterated as "GAH GAH BOH" or any other trademark or trade name that is confusingly similar to the Plaintiff's registered trademark including, but not limited to, the trademark consisting of the Chinese characters design transliterated as "GAH BOH", and did continue to do so;
(b) that the Defendants have failed, as required by the September 20, 2004 order of Mr. Justice Gibson, to deliver up, within 20 days of service of that order, any kitchen range hoods, rice cookers, slow cookers, kettles and other documents and materials which offend the order or its injunctive aspects.
2. The Defendants shall pay a fine to the Court in the amount of $10,000, within 30 days of this Order, by way of penalty for the said breach of the Order of Mr. Justice Gibson, dated September 20, 2004;
3. The Plaintiff shall be entitled to costs against the Defendants on a solicitor-and-client scale. Costs shall include all reasonable fees and disbursements incurred by the Plaintiff at the hearing and all costs reserved in the show cause orders respectively issued by Mr. Justice Rouleau on October 4, 2004 and Prothonotary Hargrave on April 4, 2005 to be agreed upon or assessed by an assessment officer.
"Luc Martineau"
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1323-04
STYLE OF CAUSE: Brilliant Trading Inc. v. Tung Wai Wong et al.
PLACE OF HEARING: Vancouver, BC
DATE OF HEARING: August 9, 2005
REASONS FOR ORDER
AND ORDER: The Honourable Mr. Justice Martineau
DATED: September 7, 2005
APPEARANCES:
Mr. Paul Smith FOR THE PLAINTIFF
Mr. Tung Wai Wong ON HIS OWN BEHALF
FOR THE DEFENDANTS
SOLICITORS OF RECORD:
Paul Smith Intellectual Property Law FOR THE PLAINTIFF
Vancouver, BC
Mr. Tung Wai Wong ON HIS OWN BEHALF
Vancouver, BC FOR THE DEFENDANTS
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