Chum Ltd. et al. v. Stempowicz et al., (2003) 236 F.T.R. 215 (TD)

• Judge: Snider, J.
• Court: Federal Court (Canada)
• Case Date: June 16, 2003
• Jurisdiction: Canada (Federal)
• Citations: (2003), 236 F.T.R. 215 (TD)

Chum Ltd. v. Stempowicz (2003), 236 F.T.R. 215 (TD)

MLB headnote and full text

Temp. Cite: [2003] F.T.R. TBEd. JL.032

Chum Limited, CTV Inc., Astral Media Inc., Groupe TVA Inc., Cogeco Cable Canada Inc., Cogeco Cable Halton Inc., Cogeco Cable Lindsay Inc., Rogers Cable Inc., Rogers Cablesystems Ontario Ltd., Vidéotron Ltée, CF Cable TV Inc., Vidéotron (Régional) Ltée, and Mountain Cablevision (plaintiffs) v. David Stempowicz (c.o.b. as Lizard King's Playhouse), Dawn Elizabeth Branton, 1254719 Ontario Inc. (c.o.b. as Tech Electronic Services), Halton Sight & Sound Inc., Jonathan Shapira, Atilla Gyurko (c.o.b. as Sat-Toys), Bill Destounis (c.o.b. as Roxy Stereo), Intracommar Inc., Afonso Januario, Orit Sheck (a.k.a. Orit Scheck), and Jane Doe and John Doe and Other Persons, Names Unknown, Who Deal in Unauthorized Equipment or Devices (defendants)

(T-541-03; 2003 FCT 800)

Indexed As: Chum Ltd. et al. v. Stempowicz et al.

Federal Court of Canada

Trial Division

Snider, J.

June 27, 2003.

Summary:

The plaintiffs, Canadian media companies and cable television service providers, brought an action for an injunction and damages, alleging that the defendants breached ss. 9 and 10 of the Radiocommunication Act (RCA) because they operated businesses which sold equipment and devices used to facilitate or permit the unauthorized reception and decoding of encrypted direct-to-home subscription programming signals. An ex parte Anton Piller Order was granted, which required the defendants to allow persons enforcing the order to search for and seize such equipment or devices. The plaintiffs brought a motion for a review of the execution of the Anton Piller Order and its continuation. Some of the defendants brought motions requesting that the Anton Piller Order be dissolved on the grounds, inter alia, that the order was obtained on the basis of material non-disclosure and that the plaintiffs had failed to show any loss or damage. The defendants also moved for a stay of the action pending the completion of an application brought in the Ontario Superior Court with respect to the issue of whether ss. 9 and 10 of the RCA violated s. 2(b) of the Charter.

The Federal Court of Canada, Trial Division, granted the plaintiffs' motion and dismissed the defendants' motions.

Courts - Topic 4033.1

Federal Court of Canada - Jurisdiction - Trial Division - Stay of proceedings where claim proceeded with in another court - The plaintiffs, Canadian media companies and cable television service providers, brought an action, alleging that the defendants breached ss. 9 and 10 of the Radiocommunication Act (RCA) because they sold equipment and devices used to facilitate or permit the unauthorized reception and decoding of encrypted direct-to-home subscription programming signals - The defendants moved to stay the action on the ground that an application was being proceeded with in the Ontario Superior Court with respect to the issue of whether ss. 9 and 10 of the RCA violated s. 2(b) of the Charter - The Federal Court of Canada, Trial Division, declined to grant a stay - There were a number of differences between the action and the Charter application and, with the exception of one plaintiff who had intervened on the Charter application, the parties were different - The defendants had not established irreparable harm - The balance of convenience favoured the plaintiffs - Given the nature of the Charter application, the public interest had to be weighed along with that of the parties - See paragraphs 49 to 54.

Injunctions - Topic 1785

Interlocutory or interim injunctions - Preservation of status quo - Seizure (Anton Piller Order) - [See first Practice - Topic 3379 ].

Practice - Topic 3379

Interim proceedings - Preservation of property - Anton Piller Order - Evidence - The plaintiffs, Canadian media companies and cable television service providers, brought an action against the defendants in relation to the unlawful sale of devices designed to facilitate the unauthorized reception and decoding of direct-to-home satellite television signals - An ex parte Anton Piller Order was granted, which authorized the search for and seizure of such equipment and devices from the defendants - The Federal Court of Canada, Trial Division, held that the three part test for an Anton Piller Order was met and that the order should be continued as an interlocutory injunction - An extremely strong prima facie case was established - The plaintiffs also established very serious actual or potential damage, which included loss of market share, lost subscription and advertising revenue and the threat that the "grey market" posed to the long-term interests of the industry - Given the difficulty in quantifying damages of that type, the requirement of specific evidence of those damages was not stringent - The plaintiffs had also provided clear evidence of possession and the real possibility of destruction - See paragraphs 34 to 47.

Practice - Topic 3379

Interim proceedings - Preservation of property - Anton Piller Order - Evidence - The plaintiffs, Canadian media companies and cable television service providers, brought an action against the defendants in relation to the unlawful sale of devices designed to facilitate the unauthorized reception and decoding of direct-to-home satellite television signals - An ex parte Anton Piller Order was granted, which authorized the search for and seizure of such equipment and devices from the defendants - The defendants moved to dissolve the Anton Piller Order on the basis of material non-disclosure because the plaintiffs failed to disclose that their well-being had improved since the 2002 ruling in Bell ExpressVu (S.C.C.) - The Federal Court of Canada, Trial Division, dismissed the motion - The harm alleged by the plaintiffs included lost subscription and advertising revenue and an adverse impact on Canadian culture - The fact that the plaintiffs' financial well-being may have improved did not mean that the plaintiffs had not suffered those losses, i.e., profits would have been even higher if the defendants had not been providing unauthorized products and services - Given the difficulty in quantifying damages of this nature, the requirement that specific evidence be provided was not stringent - See paragraphs 30 to 31.

Practice - Topic 3379.1

Interim proceedings - Preservation of property - Anton Piller Order - Conditions precedent - [See first Practice - Topic 3379 ].

Practice - Topic 3379.3

Interim proceedings - Preservation of property - Anton Piller Order - Setting aside - [See second Practice - Topic 3379 ].

Practice - Topic 3379.3

Interim proceedings - Preservation of property - Anton Piller Order - Setting aside - The plaintiffs, Canadian media companies and cable television service providers, brought an action alleging that the defendants breached ss. 9 and 10 of the Radiocommunication Act (RCA) because they sold equipment and devices used to facilitate or permit the unauthorized reception and decoding of encrypted direct-to-home subscription programming signals - An ex parte Anton Piller Order was granted, which authorized the search for and seizure of such equipment and devices from the defendants - The defendants moved to dissolve the Anton Piller Order on the basis of material non-disclosure where the plaintiffs had failed to disclose that an application had been brought before the Ontario Superior Court with respect to the issue of whether ss. 9 and 10 of the RCA violated s. 2(b) of the Charter - The Federal Court of Canada, Trial Division, dismissed the motion - The fact that ss. 9 and 10 of the RCA would be subjected to a Charter challenge before the Ontario Superior Court at some point in the future was not relevant to the test for an Anton Piller Order - See paragraphs 21 to 22.

Cases Noticed:

Adobe Systems Inc. et al. v. KLJ Computer Solutions Inc. et al., [1999] 3 F.C. 621; 166 F.T.R. 184 (T.D.), refd to. [para. 13].

Bell ExpressVu Limited Partnership v. Rex et al. (2002), 287 N.R. 248; 166 B.C.A.C. 1; 271 W.A.C. 1 (S.C.C.), refd to. [para. 18].

Brink's-Mat Ltd. v. Elcombe et al., [1988] 3 All E.R. 188 (C.A.), refd to. [para. 20].

Incredible Electronics Inc. et al. v. Canada (Attorney General) et al., [2002] O.T.C. 366 (Sup. Ct.), refd to. [para. 22].

Bell ExpressVu Limited Partnership v. Tedmonds & Co. et al., [1999] O.T.C. Uned. 849 (Sup. Ct.), refd to. [para. 31].

Bell Expressview Limited Partnership v. Pomeroy, [2002] O.J. No. 4064 (Sup. Ct.), refd to. [para. 31].

Nintendo of America Inc. v. Coinex Video Games Inc. et al., [1983] 2 F.C. 189; 46 N.R. 311 (F.C.A.), refd to. [para. 32].

Titan Linkabit Corp. et al. v. S.E.E. See Electronic Engineering Inc. et al. (1993), 62 F.T.R. 241 (T.D.), refd to. [para. 42].

Titan Sports Inc. et al. v. Mansion House (Toronto) Ltd. et al., [1990] 1 F.C. 448; 31 F.T.R. 25 (T.D.), refd to. [para. 43].

WIC Premium Television v. Levin et al., [1999] F.T.R. Uned. 295 (T.D.), refd to. [para. 44].

RJR-MacDonald Inc. et Imperial Tobacco Ltd. v. Canada (Procureur général), [1994] 1 S.C.R. 311; 164 N.R. 1; 60 Q.A.C. 241, refd to. [para. 52].

Brocklebank v. Canada (Minister of National Defence) et al. (1994), 86 F.T.R. 23 (T.D.), refd to. [para. 52].

Pineview Poultry Products Ltd. et al. v. Canadian Egg Marketing Agency et al. (1993), 151 N.R. 195 (F.C.A.), refd to. [para. 53].

Harper v. Canada (Attorney General), [2000] 2 S.C.R. 764; 262 N.R. 201; 271 A.R. 201; 234 W.A.C. 201, refd to. [para. 53].

Compulife Software Inc. v. Compuoffice Software Inc. (1997), 143 F.T.R. 19 (T.D.), refd to. [para. 54].

Counsel:

John A. Campion, Richard B. Swan and Andrea Kokonis, for the plaintiffs;

Milton Davis and Charles Wagman, for the defendants.

Solicitors of Record:

Fasken Martineau DuMoulin, LLP, Toronto, Ontario, for the plaintiffs;

Davis Innes, LLP, Toronto, Ontario, for the defendants;

Wagman Sherkin, Toronto, Ontario, for the defendants.

These motions were heard on June 16, 2003, at Toronto, Ontario, before Snider, J., of the Federal Court of Canada, Trial Division, who delivered the following decision on June 27, 2003.