Profekta International Inc. v. Mai (T.D.) [1997] 1 F.C. 223
T-1995-95
BETWEEN:
PROFEKTA INTERNATIONAL INC.
Plaintiff
- AND -
ANH LAN MAI
carrying on business under the registered business name of
DAI NAM VIDEO
Defendant
REASONS FOR ORDER
McKEOWN J.
The plaintiff seeks an Anton Piller order on an ex parte and in camera basis, for the detention, custody and preservation of copies of video-cassette taped programs allegedly in the control of the defendant and allegedly infringing the plaintiff's rights as the exclusive Canadian licensee for those programs.
The Facts
The plaintiff filed a statement of claim on September 22, 1995. The plaintiff's statement of claim alleges that: 1) the defendant has knowingly infringed copyright in video-cassette taped programs owned by Television Broadcasts Limited of Hong Kong; 2) it is the exclusive Canadian licensee for the programs and as such possesses an interest protected pursuant to the provisions of the Copyright Act, R.S.C. 1985 c. C-42 (the Act) and the plaintiff licenses retail video stores to rent the programs to the public, and; 3) the defendant, who operates a retail store, rents out the programs on video-cassette tapes without the plaintiff's permission in violation of the Act.
This motion has been brought in the midst of an on-going action. As indicated earlier, the statement of claim was filed in September of 1995; the statement of defence was served in November of 1995. Both parties are represented by counsel. On January 23, 1996, the plaintiff served its affidavit of documents. On February 6, 1996, the defendant served an unsworn affidavit of documents which stated that the defendant had no relevant documents that were not privileged. On February 17, 1996, the plaintiff informed the defendant that video-cassette tapes are "documents" within the meaning of the Federal Court Rules. The plaintiff then requested of the defendant a further, amended affidavit of documents that listed all of the video-cassette tape copies of the programs in the defendant's possession. On March 4, 1996, prior to receiving an amended affidavit of documents, the plaintiff's private investigator rented an infringing video-cassette tape from the defendant's store. The defendant served her amended affidavit of documents on the plaintiff on May 9, 1996. This affidavit was unsworn, but on May 22, 1996, the defendant's counsel assured the plaintiff's counsel that the unsworn affidavit could be treated as though it were sworn. The second affidavit listed only two programs as being in the defendant's possession. Not included amongst these two programs were the program rented by the private investigator on March 4, 1996, and the programs rented by the private investigator in September of 1995. The plaintiff, to test the accuracy of the defendant's amended affidavit of documents, again sent the private investigator to the defendant's retail store; the private investigator rented three further copies of the programs on May 19, 1996. None of these programs was disclosed in either of the defendant's affidavits of documents.
The plaintiff has brought this motion for an Anton Piller order in part on the basis that the defendant's failure to provide an accurate and complete affidavit of documents, despite having been expressly asked to make full disclosure, is equivalent to the defendant denying that she has the infringing video-cassette tapes of the programs. The plaintiff makes two submissions: firstly, the plaintiff submits that it has met the requirements of securing an Anton Piller order and that it is the appropriate means by which to secure the evidence that the defendant denies having even as she rents it out from her store; if the defendant denies having the evidence, the plaintiff submits, it is reasonable to conclude that, in the event that the trial judge orders the delivery-up of all infringing copies of the programs, she would not hesitate to remove or destroy the evidence. Secondly, without full disclosure, the plaintiff's case for damages is rendered virtually meaningless since it can only proceed with respect to the seven infringing programs that the private investigator has rented and not with respect to what the plaintiff alleges as being the "many hundreds that are doubtless in the defendant's video store."
Analysis
An Anton Piller order is a remedy which should be granted in only the rarest of circumstances as it confers on the moving party a search and seizure power which runs contrary to the principles of private property and trespass. Accordingly, an Anton Piller order must only be granted where the moving party has satisfied a burdensome test. As was enunciated in the original case dealing with such an order, Anton Piller KG v. Manufacturing Processes Ltd. and Others, [1976] R.P.C. 719 (C.A.), the moving party must first demonstrate that it has an extremely strong prima facie case; secondly, that the potential for damage is very serious, and; thirdly, there must be clear evidence that the other party has in its possession incriminating documents or things, and that there is a real possibility that the other party may destroy such material before any application inter partes can be made. Furthermore, in my view, after an action has been commenced, I must be satisfied that it is appropriate to proceed in the absence of the other party.
I will indicate at the outset of these reasons that I am satisfied that the plaintiff has demonstrated that there is an extremely strong prima facie case. The plaintiff has provided documentary evidence of its interest in the copyright which subsists in these programs through an exclusive licensing agreement with the owners of the copyright. There is no evidence that the defendant has any authority to rent video-cassette tapes of the programs to the public. Thus, there is a serious issue to be tried. Furthermore, the potential for damage is very serious and there is clear evidence that the defendant has in her possession video-cassette tapes which she rents out without the plaintiff's permission in violation of the Act and I am satisfied that there is a real possibility that the defendant may destroy the tapes before any application inter partes can be made.
Practically speaking, so that these orders have their intended effect, Anton Piller orders are most often sought on an ex parte basis. This is to ensure the element of surprise in the sense that, as the defending party is not given notice of the order, there is no opportunity for the offending documents or things to be destroyed or removed. In addition, Anton Piller orders are, generally speaking, sought either before or at the onset of court proceedings as it is at this point that the plaintiff becomes aware that such an order is necessary. This particular motion is unusual in the sense of its timing. The plaintiff brings this motion midway through the proceedings, after the usual discovery process has begun. Because the matter is so far advanced, both parties are represented by counsel. It is because this motion is brought ex parte and because of its timing that it poses difficulties which in my view had to be addressed by counsel for the plaintiff.
The English decision, EMI Ltd. and Others v. Pandit, [1975] 1 All E.R. 418 (Ch.D.) is relevant. In that case, a copyright infringement action, the plaintiff obtained an interlocutory injunction and an interlocutory order whereby the defendant was required to provide an affidavit which was, among other things, to include copies of all documents relevant to the infringement. The defendant served the ordered affidavit but it was subsequently discovered by the plaintiffs that the affidavit was missing vital documents. On an ex parte basis the plaintiffs sought what amounted to an Anton Piller order. In EMI Ltd., Templeman J. stated, at page 422:
| In the normal course of events, a defendant will have notice of the relief which is sought against him in the exercise of the powers given by this rule and will be able to come along to the court and to give reasons why the order should not be made or why, if it is made, particular safeguards should be included. Nevertheless, in my judgment, if it appears that the object of the plaintiffs' litigation will be unfairly and improperly frustrated by the very giving of the notice which is normally required to protect the defendant, there must be exceptional and emergency cases in which the court can dispense with the notice and, either under power in the rules to dispense with notice or by the exercise of its inherent jurisdiction, making such a limited order, albeit ex parte, as will give the plaintiffs the relief which they would otherwise be unable to obtain. In the present case I am satisfied that, if notice were given to the defendant, that would almost certainly result in the immediate destruction of the articles and information to which the plaintiffs are entitled and which they now seek. |
In a somewhat similar vein is Lord Denning's decision in Yousif v. Salama and Another, [1980] 1 W.L.R. 1540 (C.A.) wherein Lord Denning granted an Anton Piller award stating, at page 1542:
| In many cases such an order would not be granted. But in this case there is evidence (if it is accepted) which shows the first defendant to be untrustworthy. The plaintiff has a legitimate fear that the documents will be destroyed. In the circumstances, it seems to me that it would be proper to make an Anton Piller order to the effect that the plaintiff's solicitor would be enabled to go and get the documents - take them into his personal custody for a while - make copies of them - and then return the originals to the defendants. The solicitor would have to keep them personally himself and not let them out of his possession. It seems to me that that would be an aid to justice. It would be preserving the evidence in the case. Under R.S.C., Ord. 29, r. 2, there is a far-reaching power for preserving documents which are the subject matter of the action. These files here are not the subject matter of the action. But they are the best possible evidence to prove the plaintiff's case. There is a genuine fear that, if the plaintiff waits till after the application is heard, the first defendant may destroy the documents before the date of the hearing. That is the sort of danger which the Anton Piller order is designed to prevent. |
In the present case, the plaintiff makes the same argument, that if the defendant were to be given advance notice of this motion, any relief which may be ordered by this Court would be rendered valueless as the evidence demonstrates that the defendant would dispose of the evidence rather than allow it to be discovered, either through the normal route of discovery or through an exceptional order such as the one contemplated here. In my view, the Court must exercise excessive caution in hearing a motion on an ex parte basis when the party being excluded is represented by counsel. While Anton Piller orders are, in the main, sought and issued on an ex parte basis, this fact alone does not justify denying opposing counsel the right to contest such a motion. Instead, compelling reasons must be offered to warrant derivation from the audi alteram partem rule. At its very essence, our civil litigation process is adversarial; to circumvent that process by proceeding on an ex parte basis should only be allowed where there remains no other effective option. In my view, the dissenting decision of Donaldson L.J. in the Yousif case is instructive on this point. Donaldson L.J. stated, at page 1543:
| Discovery can be ordered at any stage. It can be ordered even before statement of claim in an appropriate case. But the ordinary basis of litigation in the English courts is that the courts will make orders and that the parties will obey those orders. Thus it is that under an order for discovery one party gives discovery to the other - and I stress the word "gives." The party who is entitled to receive discovery has it given to him. He is not empowered to "take" discovery. What Miss Vitoria asks us to do in this case is to make an order that the plaintiff, on an ex parte application, should be entitled, armed with a warrant from this court, to enter the premises of the defendants and take discovery. |
This principle is also eloquently stated by Mr. Justice Robert J. Sharpe, in his book Injunctions and Specific Performance, Aurora, Canada Law Book Inc., 2nd ed., 1995. In addressing Lord Denning's decision in Yousif, Mr. Justice Sharpe wrote, at page 2-65:
| ... It is one thing to justify a significant invasion of the defendant's privacy where there is strong evidence of an intent to flout the ordinary process and effectively deprive the plaintiff of rights but quite another to grant such drastic relief where there is no more than a possibility that the defendant might destroy evidence which might assist the plaintiff in making out his or her case. |
| A plaintiff who has been wronged is entitled to a remedy but not at all costs. Other competing values come into play. Even a wrongdoer is entitled to certain basic protections and it is difficult to justify giving the plaintiff liberty to rummage into the defendant's private affairs unless there is compelling evidence that the defendant is bent on flouting the process of the court by refusing to abide by the ordinary procedure of discovery. [footnote omitted] |
In my view, as was the case in EMI Ltd. and in Yousif, there is compelling evidence that if the defendant were provided with notice of this motion, the plaintiff's litigation will be "unfairly and improperly frustrated". The plaintiff has, through the affidavit of its private investigator, provided this Court with compelling evidence that there is a probability, and more than a possibility, that were the defendant to be given notice of this motion, the evidence being sought would disappear. I must state, however, that I come to this conclusion reluctantly as I am loathe to proceed in any matter where there is legal counsel, without providing counsel with the opportunity to be heard.
The second issue which counsel for the plaintiff addressed was whether seeking an Anton Piller order is appropriate at this stage of the proceedings, where the parties have already begun the ordinary discovery process. The Federal Court Rules provide for discovery between parties through the exchange of affidavits of documents and in the case at bar, the parties have, at least in form, complied with this requirement. The plaintiff is not satisfied with the affidavit of documents provided by the defendant, and has tendered to the Court, evidence that the affidavit of documents is deficient. In these circumstances, I am faced with two applicable Federal Court Rules. First, there is Rule 453 which provides a remedy in circumstances where, on a motion, the moving party can satisfy the Court that the opposing party has filed an inaccurate affidavit of documents. Under ordinary circumstances, where a party is dissatisfied with an affidavit of documents, Rule 453 provides the appropriate course of action. Upon motion for an order under that Rule, the opposing parties would be afforded the opportunity to satisfy the Court as to whether or not the affidavit of documents at issue is accurate.
However, in the present circumstances, there is also Rule 470, under which Rule the plaintiff in the case at bar moves, which contemplates that this Court may make, inter alia, an order such as an Anton Piller order, for the detention, custody and preservation of property. In this case, the plaintiff is relying on the allegedly inaccurate affidavit of documents as the evidence that an Anton Piller order is required. Rather than seek to obtain an order requiring an accurate affidavit of documents, the plaintiff has chosen the more extreme route of being granted the power to enter onto the defendant's premises and seize those documents which it alleges are present there and which are not listed on the affidavit of documents. To proceed in this manner is to circumvent the ordinary discovery process in a major way. Counsel for the plaintiff has cited authority for the proposition that Anton Piller orders may be granted long after the proceedings between the parties have commenced and advanced: see, for example, Mooney v. Orr (1994), 33 C.P.C. (3d) 31, 54 (B.C.S.C.); Edmonton Northlands v. Edmonton Oilers Hockey Corp. (1994), 23 C.P.C. (3d) 72 (Alta. C.A.); LeMay v. Manitoba Metis Federation (1995), 38 C.P.C. (3d) 1 (Man. Q.B.).
In determining whether the plaintiff is seeking the appropriate remedy from this Court, it must be noted that Rule 470 specifically states that it is applicable either before or after the commencement of proceedings. At the same time, Rule 453 does not mandate that in the event that an inaccurate affidavit of documents is provided, the receiving party must find its remedy under that Rule. Thus, the plaintiff in this case had the choice of which Rule under which to proceed and it chose Rule 470; the only limitation on proceeding in that manner is, of course, that the plaintiff must meet the stringent test that is applicable to the granting of Anton Piller orders. In this case, part of that test becomes whether the plaintiff has satisfied me that, in light of the defendant's past actions, this is not a case where the ordinary discovery process will be effective. To use Mr. Justice Sharpe's words, quoted above, the plaintiff must demonstrate that this is a case where there is "compelling evidence that the defendant is bent on flouting the process of the court by refusing to abide by the ordinary procedure of discovery." In my view, the affidavit evidence of the plaintiff's private investigator provides this compelling evidence. The defendant has twice received an affidavit of documents from the plaintiff, each of which, on the evidence presented to this Court, is inaccurate; the private investigator's evidence is that he has rented seven programs which properly should have been disclosed, but have not been. The defendant has been given two opportunities to comply with this Court's Rules, and I am satisfied on the evidence that she has failed to do so. Although the plaintiff has not moved for a court order requiring the defendant to provide an accurate affidavit of documents, in my view, this is one of the rare cases where the evidence demonstrates that the ordinary discovery process will not have its intended effect and an Anton Piller order is appropriate. It should be noted that the courts are careful to ensure that Anton Piller orders are not used as tools for fishing expeditions. I am satisfied, in light of the private investigator's evidence with respect to his having rented seven allegedly infringing videos, that the plaintiff is not seeking this motion as part of a fishing expedition. On the evidence, I draw the inference that there are additional allegedly infringing video-cassette tapes at the defendant's retail premises.
In my view, the plaintiff has met the three parts of the test for an Anton Piller order. In addition, the plaintiff has satisfied me that this motion should be done on an ex parte basis and that it is a remedy which is available at this point in the proceedings.
For these reasons, an Anton Piller order is granted.
_______________________________
Judge
OTTAWA (ONTARIO)
August 29, 1996