Date: 20031113
Docket: T-2569-96
Citation: 2003 FC 1335
Ottawa, Ontario, Thursday, the 13th day of November 2003
PRESENT: The Honourable Madam Justice Dawson
BETWEEN:
LOUIS VUITTON MALLETIER, S.A. and
LOUIS VUITTON CANADA INC.
Plaintiffs
- and -
BAGS O'FUN INC., VEE BOUTIQUE & CLEANERS, HALLMARK GROUP,
NEW WORLD FASHION, KUN KOOK CHUNG AND PYONG LIM CHUNG DOING
BUSINESS UNDER THE TRADE NAME AND TRADING STYLE OF DAISY
GIFT CENTRE, VIRGINIA CAMPBELL DOING BUSINESS UNDER THE TRADE
NAME AND TRADING STYLE OF LEG-IN BOOTIQUE, MIDOPA GIFT SHOP,
174886 CANADA INC. DOING BUSINESS UNDER THE TRADING NAME
A. RINA CHAUSSURES, JOHN DOE AND OTHER PERSONS UNKNOWN TO
THE PLAINTIFFS DOING BUSINESS UNDER THE TRADING NAMES OF
CALIFORNIA SUNGLASSES, S & M SALES, FRANÇOIS VILLON,
JOHN DOE AND OTHER PERSONS UNKNOWN TO THE PLAINTIFFS
DOING BUSINESS UNDER THE TRADE NAME AND TRADING STYLE OF
TIM YOUNG FASHIONS, JOHN DOE AND OTHER PERSONS UNKNOWN
TO THE PLAINTIFFS DOING BUSINESS UNDER THE TRADE NAME AND
TRADING STYLE OF AKA FASHIONS, LA SCARPA EUROPEAN FASHION
LIMITED, PATRICK CHAN, JOHN DOE'S, JANE DOE'S AND OTHER PERSONS UNKNOWN TO THE PLAINTIFFS DOING BUSINESS AT A STREET MARKET LOCATED IN OR ABOUT PENDER AND KEEFER STREETS IN VANCOUVER, BRITISH COLUMBIA, CANADIAN QUALITY OUTLET, ALL BAGS DISCOUNT HANDBAGS LTD., ALL BAGS DISCOUNT (BRAND NAME
SPECIALIST), PAUL CHUN, (A.K.A. SUI KEUNG), PUN CHUN, PO KING LAM,
K.H. SUEN, JOHN DOE'S, JANE DOE'S, AND OTHER PERSONS UNKNOWN TO
THE PLAINTIFFS DOING BUSINESS UNDER THE TRADE NAME OF ALL
BAGS DISCOUNT (BRAND NAME SPECIALIST), AND OR DOING BUSINESS
UNDER THE TRADE NAME OF CANADIAN QUALITY OUTLET AND OR DOING
BUSINESS AT AN OUTDOOR MARKET LOCATED IN OR ABOUT THE
CONTINENTAL CENTER SHOPPING PLAZA IN RICHMOND, BRITISH
COLUMBIA, BOSSI TRADERS, AND JOHN DOE AND JANE DOE AND OTHER
PERSONS UNKNOWN TO THE PLAINTIFFS DOING BUSINESS UNDER THE
TRADE NAME BOSSI TRADERS AND OTHER PERSONS UNKNOWN TO THE
PLAINTIFFS WHO OFFER FOR SALE, SELL, IMPORT, MANUFACTURE,
PRINT, ADVERTISE, PROMOTE, SHIP, STORE, DISPLAY OR OTHERWISE
DEAL IN COUNTERFEIT LOUIS VUITTON ITEMS
Defendants
[1] This is a proceeding under Rules 466 and 467 of the Federal Court Rules, 1998 ("Rules") by which the defendant Paul Chun was required by a show cause order to appear before a judge to hear proof with respect to an alleged contempt of court, and to present any defence which he might have. Mr. Chun did not appear in Court to respond to the allegation of contempt contained in the show cause order.
HISTORY OF THE PROCEEDING
[2] On July 10, 2000, an Anton Piller order was issued by Mr. Justice Rouleau against a number of specifically named individuals, including Mr. Chun. The order specifically enjoined Mr. Chun from offering for sale, selling, storing or displaying counterfeit items in association with a number of specifically listed registered trade-marks owned by Louis Vuitton Malletier, S.A. ("Vuitton trade-marks").
[3] Subsequently, a motion was brought by the plaintiffs to review the execution of the Anton Piller order upon Mr. Chun. At that time, in addition to affidavit evidence relating to the service of the statement of claim and the execution of the Anton Piller order, a written consent signed by Paul Chun was filed with the Court. By that consent Mr. Chun consented to the continuation of the terms of the Anton Piller order.
[4] On the basis of the evidence before the Court, on July 31, 2000 I issued an order in this matter ("order"). It is the alleged breach of this order which gives rise to this contempt proceeding. Paragraph one of the order was as follows:
1. Paul Chun, All Bags Discount Handbags Ltd. and All Bags Discount (Brand Name Specialist) (together "these defendants") are hereby restrained and enjoined from, until the trial of this action or further Order of this Court:
(i) offering for sale, selling, importing, distributing, manufacturing, printing, advertising, promoting, shipping, storing or displaying any counterfeit VUITTON Items in association with any of the VUITTON Registered Trademarks, namely:
Trademark Registration No.
LV & Design 352,916
LV Logo 326,814
LV Logo 287,463
Keepall Bag 407,881
Noe Bag 407,882
Flower Design 401,088
L'Ame du Voyage (words) 372,032
Louis Vuitton (word) 288,667
Louis Vuitton (word) 327,219
Cuir Epi + Logo 384,607
Cuir Epi Noir 484,588
Cuir Epi 484,488
Cuir Epi Vert 448,621
Cuir Epi Jaune 455,587
Cuir Epi Fauve 455,586
Cuir Epi Gold 455,588
Cuir Epi Rouge 484,489
Cuir Epi Bleu 455,585
Toile Damier 492,021
TAIGA (word) 443,895
TAIGA + Logo 384,882
or any other trade-mark confusingly similar therewith;
(ii) infringing the rights of the plaintiffs under the VUITTON Registered Trade-marks;
(iii) infringing the rights of the plaintiffs under the VUITTON Proprietary Trade Dress;
(iv) depreciating the value of the goodwill attaching to the VUITTON Registered Trade-marks;
(v) directing public attention to their wares in such a way as to cause confusion between its wares and the wares of the plaintiffs; and
(vi) passing off their wares for those of the plaintiffs.
[5] The show cause order issued in respect of Mr. Chun was issued by Prothonotary Morneau on December 6, 2002. In the words of Rule 467(1)(b), the acts with which Mr. Chun were charged were specified as follows:
(i) The Defendant Paul Chun disobeyed the Order of Madam Justice Dawson, dated July 31st, 2000, by offering for sale, distributing, advertising, promoting, storing and displaying counterfeit Louis Vuitton products on September 2nd and 10th 2000 at the Richmond Week-End Night Market, B.C.;
(ii) The Defendant Paul Chun disobeyed the Order of Madam Justice Dawson, dated July 31st, 2000, by storing counterfeit Louis Vuitton products on October 28th, 2000, at 2288 #5 Road, Unit 140, Richmond, B.C.;
(iii) The Defendant Paul Chun disobeyed the Order of Madam Justice Dawson, dated July 31st, 2000, by offering for sale, selling, distributing, promoting, storing, displaying, making advertisement of counterfeit Louis Vuitton products on August 8th, 2001, in the parking lot of Fantasy Gardens Steveston and #5 Road, Richmond, B.C.;
(iv) The Defendant Paul Chun acted in such a way as to interfere with the orderly administration of justice or impair the authority or dignity of the Court by disobeying the Order of Madam Justice Dawson, dated July 31st, 2000, by offering for sale, distributing, advertising, promoting, storing and displaying counterfeit Louis Vuitton products on September 2nd and 10th 2000 at the Richmond Week-End Night Market, B.C.;
(v) The Defendant Paul Chun acted in such a way as to interfere with the orderly administration of justice or impair the authority or dignity of the Court by disobeying the Order of Madam Justice Dawson, dated July 31st, 2000, by storing counterfeit Louis Vuitton products on October 28th, 2000, at 2288 #5 Road, Unit 140, Richmond, B.C.;
(vi) The Defendant Paul Chun acted in such a way as to interfere with the orderly administration of justice or impair the authority or dignity of the Court by disobeying the Order of Madam Justice Dawson, dated July 31st, 2000, by offering for sale, selling, distributing, promoting, storing, displaying, making advertisement of counterfeit Louis Vuitton products on August 8th, 2001, in the parking lot of Fantasy Gardens Steveston and #5 Road, Richmond, B.C.
APPLICABLE LEGAL PRINCIPLES
[6] Rule 466(b) provides that a person is guilty of contempt of Court who "disobeys a process or order of the Court".
[7] Relevant and applicable principles are:
1. The party alleging contempt has the burden of proving such contempt, and the alleged contemnor need not present evidence to the Court.
2. The constituent elements of contempt must be proved beyond a reasonable doubt.
3. In the case of disobedience of an order of the Court, the elements which must be established are the existence of the Court order, knowledge of the order by the alleged contemnor and knowing disobedience of the order.
4. Mens rea and the presence of good faith are relevant only as mitigating factors relative to the penalties that are to be imposed.
See: Rules 469 and 470, and Tele-Direct (Publications) Inc. v. Canadian Business Online Inc. (1998), 151 F.T.R. 271.
[8] Contempt proceedings are a very serious matter. The fundamental purpose of the Court's contempt power is to ensure respect for the judicial process so as to, in turn, secure the proper and effective functioning of the judicial system.
FINDINGS OF FACT
[9] I find, first, that Mr. Chun was properly served with the show cause order of Prothonotary Morneau.
[10] The plaintiffs filed in Court a bailiff's certificate by which the bailiff certified that he served Mr. Paul Chun with the show cause order on December 7, 2002 in Laval, Québec. The plaintiffs also filed a solemn declaration in which the bailiff affirmed:
4. I then contacted Me Dussault of Léger Robic Richard, and was told that Mr. Chun might be at another location, i.e. at 2900 Le Carrefour Boulevard, suite 613, Laval, Quebec;
5. I then proceeded to this location and upon arrival, I asked the person in charge at the desk of the hotel if a Mr. Paul Chun was there, and was told that an individual under that name was in suite 613;
6. I then proceeded to the suite where I saw a person of Asian origin. As I routinely do when serving, I asked him if his name was Paul Chun, to which he answered affirmatively and therefore I served him with a copy of the Order of Mr. Prothonotary Morneau dated December 6th, 2002 and a copy of the Order of Mr. Justice Pelletier dated January 24th, 2002;
[...]
8. Before signing the Affidavit, I was shown a copy of a photograph which I am told was filed in the Court proceedings for the contempt as Exhibit P-1, a copy of which is attached as Annex "B". The individual in the right corner of said photograph, with his left arm raised, is indeed the same individual upon whom I served the Orders mentioned above and which identified himself to me as Paul Chun.
[11] The photograph referred to by the bailiff was an exhibit filed in Court as evidence in the contempt proceeding. The person who took the photograph testified. He identified the photograph and confirmed that Mr. Chun is the person depicted in the right hand corner of the photograph.
[12] While Rule 470(1) requires generally that, unless the Court directs otherwise, evidence on a motion for a contempt order shall be oral, Rule 146(1) permits proof of service by a certificate of service of a bailiff where service is effected in Québec. On the basis of the bailiff's certificate and the additional evidence contained in the statutory declaration which confirms how the bailiff identified Mr. Chun, and confirms that the person served was the person depicted in a photograph of Mr. Chun, I am satisfied beyond reasonable doubt that the show cause order was properly served on Mr. Chun.
[13] With respect to Mr. Chun's knowledge of the existence of the order, the plaintiffs were unable to prove that the order was physically given to Mr. Chun. I find, however, that Mr. Chun had actual knowledge of the order and that he learned of it on or about August 16, 2000. I am so satisfied, beyond a reasonable doubt, on the basis of the following evidence:
1. As of July and August 2000, Mr. Chun resided at 25 - 8591 Blundell Road, Richmond, B.C. Both a private investigator, Mr. Snidanko, and the solicitor who supervised the execution of the Anton Piller order testified that the Anton Piller order was personally served upon Mr. Chun and executed at that location, and that this was Mr. Chun's residence.
2. A process server testified that on August 16, 2000 he attended at 25-8591 Blundell Road, Richmond, B.C. and spoke to Mr. Chun's wife. He knew her to be Mr. Chun's wife because she had identified herself as such on an earlier occasion. The process server left the order with her in an envelope addressed to Paul Chun. The process server then returned to his office and mailed a further copy of the order to Mr. Chun at that address.
3. Mr. Chun had previously been served with the Anton Piller order on July 11, 2000. As noted above, the supervising solicitor testified to this, and further testified that at that time she explained the order to Mr. Chun, and he told her that he understood the order. She later met with Mr. and Mrs. Chun in her office on July 18, 2000. At that time the lawyer told Mr. Chun that she intended to return to Court to obtain a further order prohibiting Mr. Chun from dealing in items that infringe Louis Vuitton's trade-marks. Mr. Chun advised her that he understood this. Then, on July 20, 2000 the supervising solicitor spoke to Mr. Chun by telephone and advised him that she was faxing a letter to him. She then faxed a letter to Mr. Chun. That letter said:
Further to our telephone conversations and meeting on July 18, 2000, please sign below in the space provided, indicating that, subject to Federal Court approval, you acknowledge and agree to the following:
1. an adjournment of the matter until such time as determined by a Federal Court Justice, and in any event no later than October 2, 2000; and
2. that during the period of the adjournment Justice Rouleau's order, granted July 10, 2000 and served upon you on July 11, 2000, will be extended and remain in effect.
A copy of the letter was then faxed back to the solicitor and a signature appeared on the signature line above the words "Acknowledged & Agreed to on July 20, 2000, by: Paul Chun". The signature was compared by the solicitor to Mr. Chun's signature as it appeared on a document obtained on the execution of the Anton Piller order.
4. The private investigator testified that on September 10, 2000 he attended at the Richmond night market and watched Mr. Chun put out merchandise and sell it. Mr. Chun spoke to the investigator who asked Mr. Chun if he was aware that his sales of counterfeit Louis Vuitton products was in contempt of a court order. The investigator testified that Mr. Chun "simply shrugged and he asked if I was returning with lawyers". Mr. Chun then handed the investigator his business card and said "Phone me if you are".
[14] In Bhatnager v. Canada (Minister of Employment and Immigration), [1990] 2 S.C.R. 217 the Supreme Court of Canada considered the requirement that one must have knowledge of an order before one can be found to be in contempt of that order. The Court wrote as follows at paragraph 16:
On the cases, there can be no doubt that the common law has always required personal service or actual personal knowledge of a court order as a precondition to liability in contempt. Almost two centuries ago, in Kimpton v. Eve (1813), 2 V. & B. 349, 35 E.R. 352, Lord Chancellor Eldon held that a party could not be held liable in contempt in the face of uncontradicted evidence that he or she had no knowledge of the order. In Ex parte Langley (1879), 13 Ch. D. 110 (C.A.), Thesiger L.J. stated the principle as follows, at p. 119:
... the question in each case, and depending upon the particular circumstances of the case, must be, was there or was there not such a notice given to the person who is charged with contempt of court that you can infer from the facts he had notice in fact of the order which had been made? And, in a matter of this kind, bearing in mind that the liberty of the subject is to be affected, I think that those who assert that there was such a notice ought to prove it beyond reasonable doubt.
More recently, this Court adverted to the knowledge requirement in contempt in Baxter Travenol Laboratories of Canada Ltd. v. Cutter (Canada), Ltd., [1983] 2 S.C.R. 388, per Dickson J. (as he then was), at pp. 396-97.
[15] The Court went on to observe that knowledge is often proved circumstantially, and that "in contempt cases the inference of knowledge will always be available where facts capable of supporting the inference are proved: see Avery v. Andrews (1882), 51 L.J. Ch. 414".
[16] In the present case, I found the evidence of the witnesses to be credible. Their evidence was reasonable, and in each case was given in a straightforward manner, without hesitation or inherent contradiction. Witnesses were excluded from the courtroom until they had completed their testimony. I accept the evidence of all the witnesses who testified to be truthful. Having found the evidence to be truthful, I conclude that the evidence set out above, without doubt, supports the inference that Mr. Chun had actual knowledge of the order. It is reasonable to infer that he acquired this knowledge by on or about August 16, 2000 when the order was left with his wife at his home and also mailed to his home. On July 18, 2000, Mr. & Mrs. Chun had been told that a further court order would be obtained against Mr. Chun and on July 20, 2000 I am satisfied that he consented to the continuation of an injunction against him. On September 10, 2000, Mr. Chun made no protestation at the statement that his activities were in contempt of court. This evidence supports the inference that Mr. Chun had knowledge of the order.
[17] With respect to whether the order was complied with, I am satisfied beyond a reasonable doubt for the following reasons that it was not in the following respects.
[18] With respect to the specific allegations of contempt, while there are six allegations, items 4, 5 and 6 allege the identical conduct as alleged in items 1, 2 and 3. The only difference is that the first three items are styled to constitute contempt by disobeying an order of the Court, while the last three items are styled as interfering with the orderly administration of justice or impairing the authority or dignity of the Court by disobeying its order. In my view, the last three allegations add nothing. What is material is whether the order was disobeyed as alleged in items 1, 2 and 3 of the show cause order.
(a) Did Mr. Chun offer for sale, distribute, advertise, promote, store or display counterfeit Louis Vuitton products on September 2 and September 10, 2000 at the Richmond night market?
[19] The private investigator testified that on September 2, 2000 he went to the location of the Richmond night market. There he saw Mr. Chun operating three kiosks "loaded with merchandise including at least a hundred or so Louis Vuitton counterfeit purses, and he was doing a brisk business. And with him he had two or three assistants; it varied".
[20] The investigator returned on September 10, 2000 to the location of the Richmond night market. On that date he watched Mr. Chun arrive and unload his van with two assistants and begin to put out his merchandise at the kiosks for sale. The investigator described the merchandise to include counterfeit Louis Vuitton handbags. The investigator photographed the kiosks, taking a close-up photograph of the small leather goods which appear to bear some of the Vuitton trade-marks. Ten photographs taken by the investigator were identified by him and tendered in evidence. It was on this occasion that the investigator spoke to Mr. Chun to inquire if he was aware that he was in contempt of a court order. The investigator testified that Mr. Chun asked him "why are you bothering with me? I'm not making any money. It's going to them" waving to his assistants who were at the far end of the kiosk.
[21] The investigator was asked how he knew the goods were counterfeit. He said that he knew that genuine Louis Vuitton merchandise is only sold from two outlets in Vancouver: Holt Renfrew and the Vancouver Louis Vuitton shop. He also testified that the solicitor for Louis Vuitton had shown him counterfeit merchandise to show how the seamlines, brass and zipper qualities varied between genuine merchandise and counterfeits.
[22] Additionally, Mr. Emmanuel Barbault testified at the contempt hearing. He is a trade-mark lawyer who joined Louis Vuitton in January of 2001. On September 10, 2001 he was sent by Louis Vuitton to New York to run its anti-counterfeit program. Mr. Barbault testified in detail about the nature of his training that enables him to distinguish between genuine Louis Vuitton products and counterfeit items. He testified that genuine Louis Vuitton merchandise is only sold in Louis Vuitton stores and outlets. Paul Chun has never been an authorized dealer of Louis Vuitton product.
[23] This evidence satisfies me, beyond a reasonable doubt, that on September 2, 2000 and September 10, 2000 Mr. Chun offered for sale, promoted, stored and displayed counterfeit Louis Vuitton products at the Richmond night market.
(b) Did Mr. Chun store counterfeit Louis Vuitton products on October 28, 2000 at 2288 No. 5 Road, Unit 140, Richmond, B.C.?
[24] The private investigator testified that on October 28, 2000 after receiving "intelligence that Mr. Chun was still active in the sale of Louis Vuittons" he followed Mr. Chun to a storage complex at 2288 No. 5 Road. Mr. Chun entered unit 140. The investigator then testified:
There was paper over the windows leading into that one storage unit, however I returned later and with a flashlight and peering inside, I could see into the - through a crack I could see into the premises and there was the same type of paraphernalia that's used by Mr. Chun, the stands, the racks, and also there was leather goods. And among the leather goods I saw three handbags with the Louis Vuitton monogram design and I saw several other handbags that appeared to be in the Damier design.
[25] I am not satisfied that this evidence establishes beyond a reasonable doubt that Mr. Chun owned those goods or was storing them. I also am not satisfied that evidence obtained by peering through a crack in the window covering establishes beyond a reasonable doubt that counterfeit goods bearing the Vuitton trade-marks were stored there. This allegation of contempt therefore fails.
(c) Did Paul Chun offer for sale, sell, distribute, promote, store, display or advertise counterfeit Louis Vuitton products on August 8, 2001 in the parking lot of Fantasy Gardens?
[26] The private investigator testified that on August 4, 2001 he asked another private investigator, Heather Walker, and his daughter-in-law, Nicole Snidanko, to call Mr. Chun on his cell phone and to arrange a meeting where Nicole Snidanko could purchase a counterfeit handbag. He testified that on August 8, 2001, he gave his daughter-in-law $200.00 and showed her a picture of Mr. Chun. He then went to the location where he was told by Ms. Walker or Ms. Snidanko that the meeting was set to take place. While there, the investigator observed a van bearing a license plate number known to belong to Mr. Chun pull up to the storage facility. Half an hour later the investigator saw his daughter-in-law and Ms. Walker arrive. The driver of the van motioned them to follow his vehicle to a more private section of the parking lot. At that point the investigator was able to identify the driver of the van as Paul Chun. Afterwards, his daughter-in-law returned $100.00 to him along with a purse that she, Ms. Walker and Mr. Snidanko signed and dated. He later sent the purse to New York for inspection by representatives of Louis Vuitton. The purse was later returned to him and he produced and identified it at the contempt hearing so that it was tendered in evidence.
[27] The investigator's daughter-in-law, Nicole Snidanko, testified that she called Mr. Chun on August 4, 2001 for the purpose of purchasing a Louis Vuitton handbag from him. She arranged to meet him on August 8, 2001. On August 8, 2001, she met with her father-in-law who briefed her and gave her $200.00 with which to purchase a handbag. She also reviewed with another investigator, Ms. Walker, the procedure to follow so that Ms. Walker could videotape the meeting. She then drove with Ms. Walker to the Fantasy Gardens parking lot where she had agreed to meet Mr. Chun. Ms. Snidanko was able to identify Mr. Chun from a picture shown to her earlier by her father-in-law. After following Mr. Chun to a more quiet part of the parking lot Mr. Chun opened up the side of the van he was driving. There she saw six containers containing the items Mr. Chun had for sale. Approximately 100 of them bore the Louis Vuitton insignia. Mr. Chun told her that if she could get 25 friends together he could have a Louis Vuitton showing and everyone could purchase product. He said he would have about 200 items if he was given a month's notice. Ms. Snidanko found a bag to purchase. The asking price was $110.00, but she was able to bargain down the price to $100.00. After paying she then left with Ms. Walker. They met Mr. Snidanko and all of them signed and dated the inside of the purse she had purchased.
[28] Ms. Walker testified. She was to accompany Ms. Snidanko to the meeting with Mr. Chun as it was her job to videotape the meeting with a hidden camera carried in her own purse. After meeting with Mr. Snidanko, Ms. Walker and Ms. Snidanko went to meet with Mr. Chun at the Fantasy Gardens. Mr. Chun identified himself when they met as "Paul" and asked the two women to follow him to a more private area of the parking lot. Inside his van, Ms. Walker saw two cardboard boxes, two plastic garbage bags and two suitcases. Mr. Chun began opening everything and showing items, most of which displayed the Louis Vuitton insignia. When asked about a particular item, Ms. Walker was given a catalogue by Mr. Chun to flip through. Mr. Chun told her that she could order anything from the catalogue, but she would have to pay "upfront" and it would take two weeks for the item to arrive. When asked if he had a display room, Mr. Chun advised that he no longer maintained a show room because he had been raided and had been relieved of $35,000.00 worth of goods. If Ms. Snidanko could get a group of 25 women together he would display at least 200 Louis Vuitton items for her. Ms. Walker identified a videotape as accurately reflecting what transpired at the meeting. It was tendered into evidence.
[29] With respect to the purse which the three witnesses testified was purchased from Mr. Chun, Mr. Barbault testified that this had been sent to him for inspection. He was able to ascertain that the bag was a counterfeit because this bag does not exist as part of the Louis Vuitton collection, the grain of the canvas was not correct, the workmanship was a standard below that required by Louis Vuitton, and the label was improperly attached. After analysing the bag he returned it to Mr. Snidanko. When asked the price of a bag similar to this purse, Mr. Barbault said that a similar genuine purse would sell for approximately $800.00 Canadian at a Louis Vuitton store.
[30] This evidence, together with the testimony of Mr. Barbault set out above as to the proper outlets of trade for genuine Louis Vuitton merchandise satisfy me, beyond a reasonable doubt, that on August 8, 2001 Mr. Chun offered for sale, sold, promoted, stored, displayed, and advertised counterfeit Louis Vuitton products.
THE APPROPRIATE DISPOSITION
[31] Counsel for the plaintiffs argues that this is a most serious contempt. Additional evidence was led that Mr. Snidanko attended at the Sandman Inn in Richmond on January 17, 2002. Mr. Snidanko saw Mr. Chun and spoke with him in a suite where Mr. Chun was selling merchandise. According to Mr. Snidanko every surface in the suite was covered with leather goods and he estimated that in the order of 150 items were counterfeit Louis Vuitton merchandise.
[32] As well Madam Isabel Sallé testified. She has been a manager of Louis Vuitton retail outlets for five and a half years. She learned of Louis Vuitton goods being sold in a hotel in Montreal. She attended and spoke with a gentleman who gave her his business card. She identified the card and it was received in evidence. The card identified "Paul Chun" who was described as a "Brand Name Specialist". A sign at the hotel also identified "Brand Name Specialist, Paul Chun". Madam Sallé confirmed the gentleman she spoke with was the same person shown in the photograph taken by Mr. Snidanko and identified by him. She saw between 75-100 items marked with what appeared to be Vuitton trade-marks. Mr. Chun told her the product was not real Louis Vuitton. He said the products came from Korea and on one month's notice he could provide one thousand bags for her.
[33] Ms. Sallé purchased a cell phone holder and a key fob. She paid $40.00 for the cell phone holder and $15.00 for the key fob. They were tendered in evidence. Both bore Louis Vuitton marks, however Ms. Sallé testified that the cell phone holder is not part of the Louis Vuitton collection and a genuine key fob sells for $190.00 (Canadian).
[34] Counsel for the plaintiffs submits that "there is no room for persons like this in our society", otherwise the "word will be out" to ignore court orders. The severity of the conduct was therefore said to require the most serious sanction. The plaintiffs sought an order that Mr. Chun be imprisoned and ordered to pay a fine and costs with a further term of imprisonment in default of payment.
[35] Rule 472 deals with the penalty which may be ordered on a finding of contempt. It provides that:
| Where a person is found to be in contempt, a judge may order that (a) the person be imprisoned for a period of less than five years or until the person complies with the order; (b) the person be imprisoned for a period of less than five years if the person fails to comply with the order; (c) the person pay a fine; (d) the person do or refrain from doing any act; (e) in respect of a person referred to in rule 429, the person's property be sequestered; and (f) the person pay costs.
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Lorsqu'une personne est reconnue coupable d'outrage au tribunal, le juge peut ordonner : a) qu'elle soit incarcérée pour une période de moins de cinq ans ou jusqu'à ce qu'elle se conforme à l'ordonnance; b) qu'elle soit incarcérée pour une période de moins de cinq ans si elle ne se conforme pas à l'ordonnance; c) qu'elle paie une amende; d) qu'elle accomplisse un acte ou s'abstienne de l'accomplir; e) que les biens de la personne soient mis sous séquestre, dans le cas visé à la règle 429; f) qu'elle soit condamnée aux dépens. |
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[36] Mr. Justice Lemieux considered the principles applicable to the assessment of a penalty for contempt in Lyons Partnership, L.P. v. MacGregor (2000), 5 C.P.R. (4th) 157 (T.D.) and wrote at paragraphs 21, 22 and 23 as follows:
21. In Cutter (Canada) Ltd., supra, Urie J.A. said in assessing the amount of the fine what was relevant was "the gravity of the contempt in the context of the particular circumstances of the case as they pertain to the administration of justice" (page 562). The Federal Court of Appeal endorsed the reasons of the trial judge that the amount of the fine should reflect "the severity of the law and yet sufficiently moderate to show the temperance of justice" (p. 563).
The level of the fine, Urie J.A. indicated, could not be a token fine because this would "be inconsistent with the gravity of the contraventions and might serve to encourage others to flout the law if it is to their financial advantage to do so" (pp. 567-68).
22. This last statement by Urie J.A. echoes the words of Justice Rouleau of this Court in Montres Rolex S.A. v. Herson (1987), 15 C.P.R. (3d) 368 (F.C.T.D.), "that the primary purpose of imposing sanctions is to ensure compliance with orders of the court" (p. 371). Pinard J. of this Court in Louis Vuitton S.A. v. Tokyo-Do Enterprises Inc. (1991), 37 C.P.R. (3d) 8 (F.C.T.D.), also stressed the importance of deterrence as the principal factor in ensuring that those orders will not be breached again because "if those who get caught were to get away unscathed that would encourage such activities and consequently destroy the intended effect of the laws that have been passed" (page 13, line b). Pinard J., in assessing a fine, took into account the value of the counterfeit goods sold. He also ordered solicitor-client costs capped to a maximum.
23. To close off on the issue of first principles, other relevant factors to be taken into account are whether the contempt offence is a first offence (R. v. de L'Isle (1994), 56 C.P.R. (3d) 371 (F.C.A.)), and the presence of any mitigating factors such as good faith or apology (Baxter Travenol Laboratories, supra).
[37] I am unable to see any factors which mitigate the contempt.
[38] There are a number of factors that aggravate the contempt. First, Mr. Chun consented to the continuation of the injunction after its terms were explained to him by a lawyer. His subsequent breach was therefore wilful. His response to the statement that he was in contempt of Court was to shrug. Second, Mr. Chun ignored the injunction in order to secure financial gain.
[39] There are grounds for concern that ordering payment of a fine alone will not provide an effective remedy, because such an order will be difficult to enforce and there is evidence that it is difficult to locate and serve Mr. Chun. However, there is jurisprudence of this Court to the effect that a person cannot be incarcerated for civil contempt in their absence. See: Society of Composers, Authors and Music Publishers of Canada v. Trillion Investment Corp. (c.o.b. Copper John's Tavern), [1999] F.C.J. No. 319. Further, I am not convinced that deterrence requires the imposition of a term of imprisonment for a first offence.
[40] Accordingly, considering the gravity of the contempt in the context of all of the circumstances I conclude that the appropriate disposition is to order that Paul Chun pay a fine of $25,000.00 in respect of each of the two charges of contempt I have found him guilty of. If these amounts and the costs of this proceeding are not paid within 90 days of the date of personal service of this order upon Mr. Chun, the plaintiffs may move, without further notice to Mr. Chun, for an order pursuant to Rule 471 requesting that the Attorney General of Canada assist the Court by bringing Mr. Chun before the Court so the Court may consider whether to make an order of committal for a period not to exceed 60 days in default of payment of the monies hereby ordered to be paid.
[41] With respect to costs, where an application for an order finding contempt of Court is successful, the normal practice is to award reasonable costs on a solicitor-client basis to the party seeking enforcement of the Court order. This reflects the policy of the Court that a person who assists the Court in the enforcement of its orders and in ensuring respect for Court orders should not be put out of pocket. See, for example, Coca-Cola Ltd. v. Pardhan (c.o.b. Universal Exporters), 5 C.P.R. (4th) 333 (F.C.T.D.) aff'd (2003) 23 C.P.R. (4th) 173 (F.C.A.) on other grounds, and the authorities reviewed therein by Associate Chief Justice Lutfy (as he then was).
[42] I am satisfied that in the present case this general practice should apply so that Mr. Chun should pay to the plaintiffs their reasonable costs on a solicitor-client basis. Having heard evidence of the costs incurred to date from the private investigator and Mr. Barbault, I am prepared to fix those costs in the amount of $35,000.00 as submitted by counsel for the plaintiffs.
ORDER
[43] IT IS HEREBY ORDERED THAT:
1. The defendant Paul Chun is found to have been in contempt of the order of this Court dated July 31, 2000.
2. The defendant Paul Chun shall pay a fine in the total amount of $50,000.00.
3. The defendant Paul Chun shall pay to the plaintiffs their reasonable costs, fixed in the amount of $35,000.00 in respect of the show cause hearing and the contempt proceeding.
4. If these amounts are not paid within 90 days of the date of personal service of this order upon Mr. Chun, the plaintiffs may move, without further notice to Mr. Chun, for an order requesting that the Attorney General of Canada assist the Court by bringing Mr. Chun before it so the Court may consider whether to make an order of committal for a period not to exceed 60 days. In order that Mr. Chun be personally served with these reasons and order it is necessary for a copy of the document to be left with Mr. Chun as contemplated by Rule 128(1)(a).
"Eleanor R. Dawson"
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2569-96
STYLE OF CAUSE: Louis Vuitton Malletier, S.A. et al. v. Bags O'Fun Inc. et al.
PLACE OF HEARING: 1) Ottawa, Ontario
2) and 3) Vancouver, British Columbia
DATE OF HEARING: 1) June 18, 2003
2) March 21, 2003
3) March 17, 2003
REASONS FOR ORDER AND ORDER
OF THE HONOURABLE MADAM JUSTICE DAWSON
APPEARANCES:
1) Mr. Jacques A. Léger FOR THE PLAINTIFFS
Léger Robic Richard
Montréal, Québec
2) Mr. Robert Lesperance
Lesperance Mendes
Vancouver, B.C.
3) Mr. Jacques A. Léger
Léger Robic Richard
Montréal, Québec
No appearance FOR THE DEFENDANTS
SOLICITORS OF RECORD:
Léger Robic Richard FOR THE PLAINTIFFS
Montréal, Québec
Lesperance Mendes
Vancouver, B.C.
No appearance FOR THE DEFENDANTS