BETWEEN:
and
THE CANADIAN COPYRIGHT LICENSING AGENCY
(“ACCESS COPYRIGHT”)
Heard at Montreal, Quebec, on March 26 and March 28, 2007.
Judgment delivered from the Bench at Montreal, Quebec, on March 28, 2007.
REASONS FOR JUDGMENT OF THE COURT BY: LÉTOURNEAU J.A.
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)
[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:
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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.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-9-06
(APPEAL FROM AN ORDER OF THE FEDERAL COURT DATED DECEMBER 7, 2005, DOCKET NO. T-1758-03)
STYLE OF CAUSE: RIAZ A. LARI v. THE CANADIAN
COPYRIGHT LICENSING AGENCY
PLACE OF HEARING: Montreal, Quebec
DATES OF HEARING: March 26 and 28, 2007
REASONS FOR JUDGMENT DESJARDINS J.A.
OF THE COURT BY: LÉTOURNEAU J.A.
NOËL J.A.
DELIVERED FROM THE BENCH BY: LÉTOURNEAU J.A.
APPEARANCES:
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FOR THE APPELLANT
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FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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Montreal, Quebec
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FOR THE APPELLANT
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Toronto, Ontario |
FOR THE RESPONDENT
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