Date:
20070328
Docket:
A-9-06
Citation:
2007 FCA 127
CORAM: DESJARDINS
J.A.
LÉTOURNEAU
J.A.
NOËL
J.A.
BETWEEN:
RIAZ A. LARI
Appellant
and
THE CANADIAN COPYRIGHT LICENSING AGENCY
(“ACCESS
COPYRIGHT”)
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Montreal, Quebec, on March 28, 2007)
LÉTOURNEAU
J.A.
[1]
The
appellant was found guilty of contempt of court pursuant to contempt
proceedings brought under Rules 466 to 472 of the Federal Courts Rules.
This is his third conviction for contempt of court.
[2]
As
a result of such conviction, the appellant was sentenced to a six-month term of
imprisonment and to pay to the respondent costs of the contempt proceedings on
a reasonable solicitor-client scale.
[3]
However,
the sentence of imprisonment was suspended provided the appellant:
a) obeys at all times the permanent
injunctions issued by Harrington J. in July 19, 2004; and
b)
performs, over a period of thirteen (13) months, four hundred (400)
hours of community service.
[4]
The
appeal was heard on Monday and adjourned to Wednesday for oral judgment. The
parties were informed that the written version of the reasons for judgment
would include a summary of the facts and the evidence.
FACTS AND PROCEDURAL
HISTORY OF THE CASE
[5]
The
Federal Court judge who heard the contempt proceedings summarized the
procedural history of the case in the following terms:
[5] On September 29,
2003, Justice Layden-Stevenson issued an Anton Pillar order in support of a
copyright infringement action requiring the defendants U-Compute and Mr. Lari
to deliver up all unauthorized copies of textbooks within their possession,
custody or control. The order applied to the defendants' business premises at
2159 rue MacKay, Montreal. The Anton Pillar order also contained an
interim injunction restraining the defendants from directly or indirectly
making or selling any copies of any textbooks published by any entity listed in
Appendix "A" including any copies of any textbook or parts of
textbooks listed in appendices "B" or "C" of the Anton
Pillar order. This order was only executed in early January 2004.
[6] On January 19,
2004, Justice Tremblay-Lamer, upon a review of the execution of the Anton
Pillar order issued by Justice Layden-Stevenson, continued the interim
injunction until judgment in the action or any other final disposition and
ordered that all materials delivered up by the defendants shall remain in the
custody or control of the supervising solicitor and shall be used only for
purposes of the action.
[7] On July 19,
2004, Justice Harrington issued a consent judgment in the action in the
following terms:
(1) "Lari, his
employees, partners, agents, affiliates, relatives in collaboration with him,
and all those persons under his control, or any one of them, carrying on
business at 2159 MacKay Street in Montreal, Quebec, or elsewhere, (hereinafter
"Lari") are hereby permanently enjoined from making, distributing,
selling, exposing or offering for sale, renting, exhibiting in public or
parting with possession of unauthorized copies, in whole or in substantial
part, of the works published by any of the entities listed in Schedule A hereto";
[emphasis mine]
(2) Mr. Lari is
permanently enjoined pursuant to section 39.1 of the Copyright Act;
(3) Mr. Lari shall
pay the plaintiff the sum of $500,000 as statutory damages for all
infringements involved in the proceedings;
(4) Mr. Lari shall
pay the plaintiff the sum of $100,000 as punitive damages; and
(5) Mr. Lari shall
pay the plaintiff its costs of the action on a solicitor and his own client
scale which is fixed at $100,000.
[8] On September 20,
2004, Justice Von Finckenstein of this Court granted, in paragraph 3 of his
order, the plaintiff leave to attend at 2144 MacKay Street, the basement
premises of 2144 MacKay Street (believed to be 2140 MacKay Street), 2153 and
2155 MacKay Street (the "premises"), without prior notice to Mr. Lari
or any other person to:
(1) search for and
remove all paper copies of any works published by any entity listed in Schedule
"A" to the judgment of July 19, 2004; and
(ii) search for,
inspect and remove all hard drives or other machines which, upon inspection,
contain copies of the works previously referred to.
[9] Paragraph 8 of
that order provided that "Mr. Lari or other persons in charge of the
Premises shall permit entry of the Premises to the plaintiff for the purposes
referred to in paragraph 3 above".
[10] Prothonotary
Milczynski's October 5, 2004 show cause order specified the acts which the
defendant Riaz A. Lari is charged with. They were:
(a) that in the
period January 8, 2004 to July 19, 2004, he continued to make and sell, and
collaborate with other persons who make and sell, unauthorized copies of works
published by one or more entities listed in Schedules "A" to
"C" of the Order dated September 29, 2003, in breach of paragraph
31 thereof and paragraph 2 of the Order made January 19, 2004;
(b) that in the
period July 20, 2004 to September 22, 2004, he continued to make and sell,
and collaborate with other persons who make and sell, from 2153 MacKay
Street and 2144 MacKay (basement) Street in Montreal, Quebec, unauthorized
copies of works published by one or more entities listed in Schedule
"A" to the judgment dated July 19, 2004, in breach of paragraphs
1 and 2 thereof; and
(c) on September
22, 2004, he refused access to the basement premises of 2144 MacKay Street
as required by paragraph 8 of the Order of September 20, 2004, thereby
frustrating the plaintiff's execution of the Order and avoiding the removal of
unauthorized copies of textbooks that were observed to be at those premises
from at least September 9, 2004 to September 22, 2004. [emphasis mine]
[11] Mr. Lari is the
sole defendant in this contempt proceeding, the Court being informed that
U-Compute was in bankruptcy.
[6]
In
a nutshell, the appellant was charged with violations of three Court orders
(September 29, 2003, January 19, 2004 and September 20, 2004) and a judgment of
the Federal Court dated July 19, 2004. The violations consisted in the
unauthorized copying and selling of textbooks published by Canadian and foreign
book publishers who own copyrights in those textbooks in Canada. One count
involved a refusal to give access to premises as ordered, thereby frustrating
the execution of the order and avoiding the removal of unauthorized copies of
textbooks.
THE EVIDENCE BEFORE THE
JUDGE OF THE FEDERAL COURT
[7]
The
appellant did not testify in the contempt proceedings. Seven witnesses were
heard in support of the contempt allegations. Their evidence can be summarized
as follows.
[8]
The
respondent operates under the trade name Access Copyright. It is a reproduction
rights organization and a collective society under section 70.1 of the Copyright
Act. It licences copy shops and others to copy textbooks in exchange of
royalties which it collects and distributes to the authors and publishers.
[9]
At
paragraph 18 of his reasons for judgment, the judge gave the following account
of the difficulties that the respondent had with the appellant:
(1) Following a
complaint from one of its publisher members of illegal textbook copying, the
solicitors to the plaintiff sent a cease and desist letter, dated October 8,
1999, to Mr. Lari as the controlling mind of U-Compute.
(2) Sworn affidavit
dated November 5, 1999, by Mr. Lari as President and sole Director of U-Compute
undertaking that neither U-Compute nor he personally shall at any time in the
future make or have caused to be made, sold or distributed unauthorized copies
of copyright works as prohibited under the Canadian Copyright Act.
(3) An October 31,
2000 order issued by Justice Gibson on consent whereby Mr. Lari and U-Compute
and all persons under their control are permanently restrained from making,
offering for sale, selling, distributing or exposing for sale unauthorized
copies, in whole or in substantial part, of nine specific textbooks set out in
Appendix "A" of the order.
(4) Upon determining
that the permanent injunction was being breached, the plaintiff brought
contempt proceedings against Mr. Lari and U-Compute which resulted in Justice
O'Keefe's March 19, 2001 order based on Mr. Lari's admission of having breached
the October 31, 2000 permanent injunction. Mr. Lari and U-Compute were fined
$2,500 by way of penalty and were ordered to pay $10,000 to the applicant by
way of compensation for costs. In addition, one representative of the plaintiff
was permitted access to U-Compute's premises. Furthermore, the Court ordered
that they refrain from doing the acts they were enjoined from doing by the
order of October 31, 2000.
(5) Upon further
investigation by the plaintiff, a further contempt proceeding was brought
before Justice Martineau for breach of the two aforementioned orders which led
to an admission of breach by Mr. Lari and U-Compute. They were fined $5,000,
ordered to pay solicitor-client costs and ordered to refrain from breaching the
two existing orders. Mr. Sheffer told the Court that Access Copyright decided
to waive its solicitor-client costs provided Mr. Lari complied with the orders.
(6) It was upon the
receipt of further information about infringing activities that Access
Copyright sought and was issued an Anton Pillar order issued in September 2003.
[10]
He
then reviewed the evidence adduced before him which can be summarized as
follows.
[11]
In the execution of the Anton Pillar order, over
2000 copies of infringing works were found at U-Compute’s premises, as well as
an inventory sheet of 468 works in U-Compute’s “inventory”: see paragraph 20 of
the reasons for judgment.
[12]
After further investigation, the respondent
obtained access to the appellant’s premises pursuant to an order of Von
Finckenstein J. and discovered what the witness referred to as a “large-scale
infringing activity” wherein infringing works were being sold at an unmarked
location at 2144 Mackay Street,
which was across the street from the appellant’s main place of business. In
this investigation, a new inventory list was found and showed that the
respondent’s inventory had grown by 288 titles, 181 of which were published by
the respondent’s affiliates: ibidem, paragraph 22.
[13]
The respondent hired an investigator, King-Reid
and Associates. Ms. Elena Wegner, an investigator with that firm, attended at
the appellant’s main place of business at 2153 Mackay
Street on 31 August 2004 and 1 September 2004. She
recorded her observations with a video recording device. She identified Mr.
Lari as being present on the premises. She also identified two employees who
worked as salespeople on the premises: ibidem, paragraphs 23 to 27.
[14]
Two investigators with the firm Chartand,
Laframboise captured, with the aid of videorecorders, the presence of Mr. Lari
and the same two employees identified by Ms. Wegner. These investigators
observed many young people leaving the appellant’s main business premises with
bound books. They also observed Mr. Lari sweeping the floor at the unmarked
location at 2144 Mackay. They saw Mr. Lari on many occasions directing young
people from his main premises to the location across the street. They noted
that traffic between these two locations was constant on the days of their
investigation, 8 and 9 September 2004. These investigators could not see the
titles of materials purchased from the appellant: ibidem, paragraphs 28
and 29.
[15]
A third investigator with Chartrand,
Laframboise, Ms. Natasha Schwarzl, observed that the respondent had nothing but
bound volumes for sale in the unmarked premises. She acknowledged that she
could not see the titles of these volumes. At the unmarked premises, she
purchased a copy of Organization, Development and Change, published by
Thomson-Southwestern. She also left an original copy of the book Organization
Theory with the respondent’s employee, who informed her he would copy it
for a fee of $35.00: ibidem, at paragraphs 30 to 40.
[16]
Catherine Bergeon and Alexandra Steele, attorneys
with the firm Léger, Robic, Richard, were retained to execute Von Finckenstein
J.’s order. Me Bergeron testified to finding three copied books at
the premises above the appellant’s main premises (2153 Mackay). These two
premises were connected by a stairway. Me Steele testified that that
she served the order on Mr. Lari, who provided access to his main premises as
well as the upstairs premises, but not to the unmarked premises across the
street. Me Steele also testified to finding an inventory list of 3,350
books on Mr. Lari’s computer hard-drive. Most of these books had been scanned
in to the computer for printing: ibidem, at paragraphs 41 to 50.
THE DECISION OF THE
FEDERAL COURT
[17]
The
judge made a thorough review of the testimony of the seven witnesses called by
the respondent. He then discussed the principles applicable to contempt
proceedings. He noted that Rule 469 of the Federal Courts Rules requires
that a finding of contempt be based on proof beyond a reasonable doubt. He
undertook an analysis of the concept of reasonable doubt. He noted that
circumstantial evidence can be the foundation for a finding of guilt beyond a
reasonable doubt: ibidem, at paragraph 55.
[18]
The
judge recognized that, in order to be successful in its prosecution, the
respondent had to prove beyond reasonable doubt that the appellant continued to
make and sell or, in collaboration with other specified categories of persons,
to make and sell unauthorized copies of work published by one or more entities
listed in the July 19, 2004 judgment issued by Harrington J.
[19]
Two
periods were covered by the order of Prothonotary Milczynski issued on October
5, 2004, i.e. from January 8, 2004 to July 19, 2004 and from July 20, 2004 to
September 22, 2004.
[20]
The
judge held that the respondent met its burden for the second, but not for the
first period. He came to that conclusion on the basis of a combination of
direct evidence and what he called a “massive amount” of circumstantial
evidence that was so strong as to be “inconsistent with any other conclusion
that the appellant inevitably necessarily breached the injunction against
making and selling those unauthorized copies either as the principal or in
collaboration with the persons identified as Employees # 2 and #3”: see
paragraph 69 of the reasons for judgment.
ANALYSIS OF THE DECISION
Failure to prove guilt
beyond a reasonable doubt
[21]
Counsel
for the appellant submits that the respondent failed to meet the burden of
proof put on it by the Federal Courts Rules. While there is direct
evidence relating to the sale of infringing material by the appellant, he said,
there is no real evidence to prove that the appellant was personally involved
in the making of that material. The charge being one of making and selling,
there is therefore no evidence on one of the material elements of the offence.
An acquittal should have ensued.
[22]
Furthermore,
counsel argued that the circumstantial evidence relied upon by the judge was
not consistent with the guilt of the appellant on all charges, especially the
charge of denying access to the premises located at 2144 Mackay Street. In this
last case, the circumstantial evidence could lead to another rational
conclusion, namely that the premises at 2144 Mackay Street were
operated by someone else.
[23]
With
respect, we cannot agree with the appellant’s contention. We accept the judge’s
conclusion that the direct evidence on the record proved involvement of the
appellant in the unauthorized making of textbooks either through the
intermediary of his employees or in cooperation with other persons.
[24]
As
for the circumstantial evidence, counsel for the appellant astutely tried to
isolate some of the links in the chain of events and circumstances and, from
such elements each considered in isolation, concluded that a finding of guilt
cannot be supported.
[25]
At
first blush, the argument may appear attractive. However, this is not how the
strength and probative value of circumstantial evidence are to be assessed. The
evidence must be evaluated as a whole and this is what the judge did. Such evidence
led the judge to make unassailable inferences and findings as to the
appellant’s participation in the making and selling of unauthorized material as
well as the appellant’s control of the premises where infringements took place
and where buyers were directed to by the appellant.
[26]
Notwithstanding
the efforts of counsel for the appellant, we have not legally been provided
with a reason or justification for interfering with the finding of guilt.
The need to review the
sentence
[27]
Counsel
for the appellant submits that the sentence of imprisonment is too harsh and
ought to be reformed. In addition, he argued that the judge should not have
imposed, in the circumstances of this case, more hours of community service
that the 300 hours requested by the respondent.
[28]
It
is trite law that a judge imposing a sentence is not bound by the suggestions
or recommendations of the parties. His role is to determine a sentence that
meets the principles of sentencing. These principles are expressed in the
following terms in sections 718 and 718.1 of the Criminal Code:
|
PURPOSE AND PRINCIPLES OF SENTENCING
Purpose
718. The fundamental purpose of sentencing is to
contribute, along with crime prevention initiatives, to respect for the law
and the maintenance of a just, peaceful and safe society by imposing just
sanctions that have one or more of the following objectives:
(a)
to denounce unlawful conduct;
(b)
to deter the offender and other persons from committing offences;
(c)
to separate offenders from society, where necessary;
(d)
to assist in rehabilitating offenders;
(e)
to provide reparations for harm done to victims or to the community; and
(f)
to promote a sense of responsibility in offenders, and acknowledgment of the
harm done to victims and to the community.
Fundamental principle
718.1 A sentence must be proportionate to the
gravity of the offence and the degree of responsibility of the offender.
|
OBJECTIF ET PRINCIPES
Objectif
718. Le prononcé des peines a pour objectif
essentiel de contribuer, parallèlement à d’autres initiatives de prévention
du crime, au respect de la loi et au maintien d’une société juste, paisible
et sûre par l’infliction de sanctions justes visant un ou plusieurs des
objectifs suivants :
a) dénoncer le comportement illégal;
b) dissuader les délinquants, et quiconque, de
commettre des infractions;
c) isoler, au besoin, les délinquants du reste
de la société;
d) favoriser la réinsertion sociale des
délinquants;
e) assurer la réparation des torts causés aux
victimes ou à la collectivité;
f) susciter la conscience de leurs
responsabilités chez les délinquants, notamment par la reconnaissance du tort
qu’ils ont causé aux victimes et à la collectivité.
Principe fondamental
718.1 La peine est proportionnelle à la gravité de
l’infraction et au degré de responsabilité du délinquant.
|
[29]
The
appellant cannot help but recognize, as he did, the gravity of the charges. It
is his third conviction for contempt of court after having twice before
consented to judgment against him. The charges are indeed very serious as they
undermine the administration of justice and the authority of the courts.
[30]
He
also acknowledges that deterrence, both individual and general, comes into play
in this case. He submits, however, that individual deterrence has been
accomplished since he is now out of the impugned business.
[31]
With
respect, the fact that individual deterrence has now been accomplished, as
contended by the appellant, is not a reason to vary, after the fact, the
sentence that produced that intended result. The appellant benefited on two
previous occasions from the clemency of the courts. Indeed, upon his first
conviction in 2001 for violation of a permanent injunction, he was fined $2,500
and ordered to pay compensatory costs in the amount of $10,000. That proved to
be insufficient. He subsequently, upon further contempt proceedings being
brought, was fined $5,000 and ordered to pay solicitor-client costs.
[32]
Yet,
individual deterrence remained an elusive objective. In an action for an
injunction and damages, the appellant was condemned, on July 19, 2004, to pay
$500,000 as statutory damages for all his infringements, $100,000 as punitive
damages and $100,000 as solicitor-client costs.
[33]
This
also proved to be totally insufficient as the appellant immediately carried on
with his illicit activities even when warned that a six-month term of
imprisonment would be sought if he were to be found guilty of another contempt
of court: see in appeal book, vol. III, pages 437-438 a letter to that effect
addressed to the appellant.
[34]
The
appellant was operating on a large scale. By his own admission in
cross-examination when he testified on sentencing, the illegal activities,
which lasted five years, produced “easy and good money”: see appeal book,
volume XI, at page 1559. Obviously, a denunciation of the behaviour in stronger
terms was necessary to deter the appellant and put an end to his activities.
[35]
The
judge who had the benefit of seeing and hearing the appellant saw little
remorse in him and no evidence of substantial good faith. He doubted the
sincerity of his apology: see paragraph 89 of the reasons for judgment.
[36]
In
these circumstances, we cannot say that a sentence of imprisonment was
undeserved and that the sentence imposed was disproportionate to the gravity of
the offence and the degree of responsibility of the appellant.
[37]
As
for the length of the community service, it reflects the seriousness of the
appellant’s defiance of the law and judicial process. The community service was
not meant to be an easy alternative to or a way out of imprisonment. It offers
the appellant an opportunity to benefit from lessons learned by spending time
and effort on more worthy causes: see R. v. Brand (1996), 105 C.C.C.
(3d) 225 (B.C. S.C.). While it is more than what the appellant expected, it is
not a length that requires our intervention in the circumstances of this case.
The imposition of
solicitor-client costs
[38]
It
is a customary practice in contempt cases to impose costs on a solicitor-client
basis: see Merck and Co. v. Apotex Inc. (2003), 25 C.P.R. (4th)
289, at paragraph 93. In the case of Pfizer Canada Inc. v. Apotex Inc.
(1998), 86 C.P.R. (3d) 33, at paragraph 8, Hugessen J. for the Federal Court,
Trial Division explained in the following terms the rationale for the practice:
[8]... It is, of
course, customary, in matters of this sort, to require that persons found
guilty of contempt pay costs on a solicitor and client basis to the party who
has brought the matter to the Court’s attention. The policy underlying that
jurisprudence is clear: a party who assists the Court in the enforcement of its
orders and in the enforcement of respect for its orders should not, as a rule,
be put out of pocket for having been put to that trouble.
[39]
Words
to the same effect can be found in Innovation and Development Partners/IDP
Inc. v. Canada (1993), 64 F.T.R., at page 181 (Fed. Ct. T.D.) where
Cullen J. held that the Court must ensure that a “party acting to support
compliance with an order of the court does not bear the costs of proceedings
that were necessary to maintain the orderly administration of justice”.
[40]
The
judge made no reviewable error in awarding reasonable solicitor-client costs.
The need to amend
paragraph 4 of the judge’s Order
[41]
Counsel
for the appellant seeks a clarification of paragraph 4 of the judge’s Order
issued on December 7, 2005. The paragraph authorizes the respondent to seek a
warrant of committal in the event that the appellant does not comply with one
or more terms set out in the Order. It reads:
(4) In the event the
plaintiff wishes to prove that Mr. Lari has not complied with one or more of
the terms set out in this Order, the plaintiff shall be at liberty to seek
a warrant of committal from any Federal Court Judge, on an ex parte
basis or otherwise, as directed by such Judge, and RIAZ A. LARI shall,
upon the Court finding a breach of one or more of such terms be committed to
jail for six months.
[Emphasis added]
[42]
The
payment of costs on a solicitor-client basis is part of the judge’s Order. In a
loose sense, it is a term of the Order which could result in the imprisonment
of the appellant if he failed to comply with it. Counsel for the respondent
conceded that this was not what he sought and what was intended. Rather,
compliance in paragraph 4 refers to the terms imposed for the suspension of the
sentence of imprisonment which are found in paragraph 3 of the Order. We are
satisfied that this is what the judge intended to achieve and we will adjust
the Order accordingly.
CONCLUSION
[43]
For
these reasons, the appeal will be allowed for the limited purpose of adding in
paragraph 4 of the Order, after the words “the terms set out in”, the words
“paragraph 3 of”. In all other respects, the appeal will be dismissed with
solicitor-client costs fixed at $22,000 inclusive of taxes and disbursements.
“Gilles
Létourneau”
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