Date: 20000208
Docket: T-1436-96
BETWEEN:
THE MANUFACTURERS LIFE INSURANCE
COMPANY
Plaintiff
-and-
GUARANTEED ESTATE BOND
CORPORATION
Defendant
REASONS FOR ORDER
DUBÉ J.:
[1] This show cause hearing launched by the plaintiff against the defendant corporation ("Guaranteed Estate") and its sole director, William James Briggs, was held pursuant to the order of Prothonotary Roger R. Lafrenière on November 1, 1999 following an injunction order issued by Associate Senior Prothonotary Peter A.K. Giles on October 19, 1998. The injunction was granted by way of a judgment by default.
[2] The statement of claim of the plaintiff alleged that Guaranteed Estate uses its trademarks Guaranteed Estate Bond Corporation and Guaranteed Estate Bond, in association with life insurance and related financial services, without the consent or authority of the plaintiff.
[3] Guaranteed Estate did not file a defence, was represented for an adjournment on October 19, 1998, but was not represented at the hearing for judgment by default. Although they were served copies of both the judgment by default and the show cause order, neither Guaranteed Estate nor its sole director, Mr. Briggs, were present at the show cause hearing.
[4] Pursuant to directions of the Court, both parties were notified that the Court would raise the issue of the validity of an injunction granted by a prothonotary in view of paragraph 50(1)(e) of the Federal Court Rules, 1998, effective April 25, 1998. The subsection reads as follows:
| 50. (1) Prothonotaries - A prothonotary may hear, and make any necessary orders relating to, any motion under these Rules other than a motion
...
(e) for an injunction;
|
50. (1) Protonotaires - Le protonotaire peut entendre toute requête présentée en vertu des présentes règles - à l"exception des requêtes suivantes - et rendre les ordonnances nécessaires s"y rapportant:
...
e) une requête pour obtenir une injonction;
|
[5] The new Rules make it quite clear that a prothonotary does not have the jurisdiction to issue an injunction.
[6] It should be noted that on August 20, 1999 the then Associate Chief Justice orally directed that motions submitted by the parties for injunctive relief are to be placed before a Judge and not a prothonotary. The direction refers to motions in writing, motions made returnable and includes motions for default judgment granting an injunction and motions on consent seeking the grant of an injunction. Prothonotaries are no longer granting injunctions by way of default judgment.
[7] At the show cause hearing, counsel for the plaintiff convinced me that the proper forum to challenge the validity of an injunction is not at the show cause hearing. Where a litigant feels that a Court decision is wrong, the appropriate course of conduct is to challenge it through the available legal channels rather than refusing to obey it. The defendant in the instant case did not challenge the validity of the injunction at any stage of the proceedings and did not even appear at the show cause hearing.
[8] Sharpe J., in Injunctions and Specific Performance (Toronto: Canada Law Book Looseleaf Service) s. 6.200 states as follows:
| It is well established that a contempt application is not answered by the assertion that the injunction was erroneously granted or even that it was void. The proper course is to move against the injunction or to appeal and the court will not permit the original order to be attacked collaterally in contempt proceedings. |
In Canada (Human Rights Commission) v. Canadian Liberty Net (1998) 1 S.C.R. 626, at 669-671 and 678, the Supreme Court of Canada upheld the finding of contempt confirmed by the Federal Court of Appeal. Bastarache J. quoted McLachlin J. as follows:
| The words of McLachlin J. in Taylor, supra, at pp. 974-75, are both definitive and eloquent on this point: |
| In my opinion, the 1979 order of the Tribunal, entered in the judgment and order book fo the Federal Court in this case, continues to stand unaffected by the Charter violation until set aside. This result is as it should be. If people are free to ignore court orders because they believe that their foundation is unconstitutional, anarchy cannot be far behind. The citizens" safeguard is in seeking to have illegal orders set aside through the legal process, not in disobeying them. |
| ... For the purpose of the contempt proceedings, [the order] must be considered to be valid until set aside by legal process. Thus, the ultimate invalidity of the order is no defence to the contempt citation. (my emphasis) |
[9] The evidence at the hearing made it crystal clear Guaranteed Estate and its only director, Mr. Briggs were and still are in contempt of Court. Mr. Briggs knew very well, for having been served copies of the aforementioned orders of the Court, that Guaranteed Estate, its officers and directors were permanently enjoined from directly or indirectly infringing the Canadian trademarks in question, yet they continued to do so.
[10] Brian James Patterson, a licensed private investigator, retained by solicitors for the plaintiff, conducted an investigation regarding the defendant"s compliance with the terms of the injunction. He obtained the Corporation Profile Report on Guaranteed Estate Bond Corporation from the Companies Branch of the Ontario Ministry of Consumer and Commercial Relations indicating that the corporation was still active on August 18, 1999. A further report filed in Court at my request shows that it is still active as of this date (February 7, 2000). Mr. Patterson accessed a website controlled by the defendant corporation which contained information regarding the "Guaranteed Estate Bond Corporation" or "GEBC" and what was described as its product, the "Guaranteed Estate Bond" or "GEB". For more information viewers are requested to contact Jim Briggs, President.
[11] Using the phone number appearing on the website, the private investigator spoke with a man who identified himself as Jim Briggs. Over the course of a long telephone conversation Mr. Patterson pretended to be financially interested and Mr. Briggs provided him with detailed information about the Guaranteed Estate Bond Corporation and its product the Guaranteed Estate Bond.
[12] Subsequently, he made an appointment to meet Mr. Briggs at his office, on Thursday, September 2, 1999. Affixed to the front door of Mr. Briggs" suite, situated above a store, was a large blue and silver sign which displayed the company name "Guaranteed Estate Bond Corporation" with a trademark symbol associated with the "Guaranteed Estate Bond" portion.
[13] They had a long discussion. Mr. Briggs stated that his Guaranteed Estate Bond Corporation was active and that he had approximately 120 associates operating throughout Canada, still more in the United States. Several of the documents provided by Mr. Briggs to Mr. Patterson were filed at the hearing all under the heading "Guaranteed Estate Bond". The documents were titled as follows: "Products Dedicated to Eliminating Elderly Poverty", "Advisory Area Development Agreement", "Executive Training for Banking Institutions", "Historical Synopsis and Operating Plan". There is even a pamphlet titled "Mother Teresa: A Tribute".
[14] Mr. Briggs also provided the private investigator with a promotional videotape and a compact disc respectively titled "Guaranteed Estate Bond" and "Guaranteed Estate Benefit Corporation". In his evidence, the witness submitted that in his view the whole operation was "the clearest attempt to defraud the public" that he has seen in his long career as a fraud investigator. He described the scheme as a "multi-level pyramid". He said he was invited to become an associate for a price over $100,000, and that "his name would be placed at the top of the pyramid".
[15] It is crystal clear from the evidence that Guaranteed Estate and its sole director acted in flagrant disregard of the order of this Court. Counsel for the plaintiff described the promotion as a "willful, fraudulent scheme deserving of stern punishment". Where a corporate defendant is found in contempt of Court, responsible officers of the defendant who have aided and abetted in its breach may also be found in contempt (see Dimatt Investments v. Presidio Clothing Inc. (1993), 48 CPR (3d) 46 (FCTD) at pp. 47, 49 and 51-52.).
[16] Rule 472 provides that where a person is found to be in contempt, a judge may order imprisonment for a period of less than five years, a fine, and costs. Counsel for the plaintiff asked for fines of $5,000 each paid by Guaranteed Estate and Mr. Briggs, plus costs on a solicitor-client basis, all payable within 30 days. I believe this to be a reasonable submission, and I will make it an order of the Court.
"J. E. Dubé"
J.F.C.C.
TORONTO, ONTARIO
February 8, 2000
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
| STYLE OF CAUSE: THE MANUFACTURERS LIFE INSURANCE |
COMPANY
GUARANTEED ESTATE BOND
CORPORATION
DATE OF HEARING: MONDAY, FEBRUARY 7, 2000
PLACE OF HEARING: TORONTO, ONTARIO
| REASONS FOR ORDER BY: DUBÉ J. |
| DATED: TUESDAY, FEBRUARY 8, 2000 |
APPEARANCES: Mr. Michael E. Charles
Ms. Christine M. Pallotta
No One
| SOLICITORS OF RECORD: Bereskin & Parr |
Barristers and Solicitors
40 th Floor, Scotia Plaza
40 King Street West
Toronto, Ontario
M5H 3Y2
67 Bronte Road,
Suite 208
Oakville, Ontario
L6L 3B7
FEDERAL COURT OF CANADA
Date: 20000208
Docket: T-1436-96
BETWEEN:
THE MANUFACTURERS LIFE INSURANCE
COMPANY
Plaintiff
GUARANTEED ESTATE BOND
CORPORATION
Defendant
REASONS FOR ORDER
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