Date: 20000224
Docket: T-1697-98
BETWEEN:
LYONS PARTNERSHIP, L.P.
(a.k.a. THE LYONS GROUP)
Plaintiff
- and -
PAUL MacGREGOR
Defendant
REASONS FOR ORDER
LEMIEUX J.:
[1] BARNEY is a television character " a purple dinosaur. He is the subject of trade-mark and copyright registrations in Canada owned by Lyons Partnership, L.P., known as the Lyons Group.
[2] On January 11, 1999, Pinard J. of this Court issued an interlocutory injunction until final judgment in an action launched by the Lyons Group against Paul MacGregor, a children's entertainer, as defendant. The injunction restrained Mr. MacGregor from:
| a. Advertising and providing entertainment services in association with the BARNEY character without the consent or authority of the Applicant; |
| b. Making unauthorized use of the BARNEY character and thereby directing public attention to his services or business in such a way as to cause or be likely to cause confusion in Canada between the Respondent's services or business and the wares, services or business of Lyons contrary to Section 7(b) of the Trademark Act, supra; |
| c. Passing off his services for those of Lyons, contrary to section 7(c) of the Trade-mark Act, supra; |
| d. . . . |
| e. . . . |
| f. Using in Canada, as a trademark, tradename or otherwise the BARNEY character, the name BARNEY, or any name confusingly similar therewith in association with services other than those of Lyons. |
| g. . . . |
[3] The Lyons Group claimed Paul MacGregor breached the interlocutory injunction amounting to a contempt of court under section 466 of the Federal Court Rules, 1998. The Lyons Group obtained from this Court an ex parte order, pursuant to subsection 467(2) of the Rules, requiring Paul MacGregor to appear before the Court at a contempt hearing. These reasons relate to those contempt proceedings.
The Federal Court Rules with respect to contempt proceedings
[4] Contempt proceedings are governed by the Rules. Section 466, 467, 469, 470 and 472 read:
| 466. Subject to rule 467, a person is guilty of contempt of Court who
467. (1) Subject to rule 468, before a person may be found in contempt of Court, the person alleged to be in contempt shall be served with an order, made on the motion of a person who has an interest in the proceeding or at the Court's own initiative, requiring the person alleged to be in contempt
(2) A motion for an order under subsection (1) may be made ex parte. (3) An order may be made under subsection (1) if the Court is satisfied that there is a prima facie case that contempt has been committed. Service of contempt order (4) An order under subsection (1) shall be personally served, together with any supporting documents, unless otherwise ordered by the Court. 469. A finding of contempt shall be based on proof beyond a reasonable doubt. 470. (1) Unless the Court directs otherwise, evidence on a motion for a contempt order, other than an order under subsection 467(1), shall be oral. (2) A person alleged to be in contempt may not be compelled to testify. 472. Where a person is found to be in contempt, a judge may order that
[emphasis mine] |
466. Sous réserve de la règle 467, est coupable d'outrage au tribunal quiconque :
467. (1) Sous réserve de la règle 468, avant qu'une personne puisse être reconnue coupable d'outrage au tribunal, une ordonnance, rendue sur requête d'une personne ayant un intérêt dans l'instance ou sur l'initiative de la Cour, doit lui être signifiée. Cette ordonnance lui enjoint :
(2) Une requête peut être présentée ex parte pour obtenir l'ordonnance visée au paragraphe (1). (3) La Cour peut rendre l'ordonnance visée au paragraphe (1) si elle est d'avis qu'il existe une preuve prima facie de l'outrage reproché. (4) Sauf ordonnance contraire de la Cour, l'ordonnance visée au paragraphe (1) et les documents à l'appui sont signifiés à personne. 469. La déclaration de culpabilité dans le cas d'outrage au tribunal est fondée sur une preuve hors de tout doute raisonnable. 470. (1) Sauf directives contraires de la Cour, les témoignages dans le cadre d'une requête pour une ordonnance d'outrage au tribunal, sauf celle visée au paragraphe 467(1), sont donnés oralement. (2) La personne à qui l'outrage au tribunal est reproché ne peut être contrainte à témoigner. 472. Lorsqu'une personne est reconnue coupable d'outrage au tribunal, le juge peut ordonner :
|
The Test
[5] An allegation of contempt of court is a matter of criminal or quasi-criminal dimension; a finding of guilt subjects a defendant to a fine and the possibility of imprisonment to a maximum of five (5) years. The Federal Court Rules, 1998, which themselves on this point are a codification of the common law, require the constituent elements of contempt must be proven beyond a reasonable doubt (Bhatnager v. Canada (M.E.I.), [1990] 2 S.C.R. 217. Those constituent elements, the onus of proof which is upon the plaintiff, are: a defendant's actual personal knowledge of the Court's order; the defendant is the primary actor either actually or by express or implied authorization; and the required degree of mens rea.
The evidence
[6] The Lyons Group presented its evidence through the testimony of Carl Galetta, a private investigator. Mr. MacGregor, who was represented by counsel, did not testify as was his right not to.
[7] Mr. Galetta testified he was mandated by the Lyons Group to attend a scheduled performance at Hazelridge Hall, Hazelridge, Manitoba, on Wednesday, October 6, 1999 at 7:00 p.m. As Exhibit P-1, counsel for the Lyons Group filed a poster advertising the live musical performance displaying four Teletubbies "Impersonators"; the poster called attention the musical would also be featuring "a Famous 'Purple' Mystery Guest". Admission was $8.00; a photo of a child with all five characters was $10.00. The poster indicated the performance was "presented by Char "actors" for Kids Productions and the proceeds would go to community groups.
[8] Mr. Galetta testified he travelled to Hazelridge, saw the poster, purchased a ticket featuring the four (4) Teletubbies and calling attention to the famous purple mystery guest. The ticket bore the number 394.
[9] Mr. Galetta said he got in touch with the person organizing the show itself and, posing as a newspaper reporter, obtained access at 6:30 p.m. to the Hall's backstage on October 6, 1999, the night of the advertised performance at 7:00 p.m. He had seen Mr. MacGregor in the Hall looking at the layout of the stage. He met the defendant in a dressing room; he identified him in the courtroom. He said Mr. MacGregor was putting on his costume as the purple mystery guest " BARNEY, the purple dinosaur.
[10] Mr. Galetta said, after seeing the defendant, he stayed in the audience which he estimated to be 400 in number, watched the performance which included BARNEY who sang and danced. He attended a children's photo session which included the five characters. He purchased a balloon (P-3) with a representation of BARNEY, with a copyright notice bearing the name of the Lyons Group. He said he saw 50 or 60 people buying the balloons.
[11] Also entered as Exhibit P-4 was a copy of the Winnipeg Sun dated October 7, 1999, showing a photograph of a visit by BARNEY to a children's hospital; the headline was "Bogus Barney boffo". The photo of BARNEY was subtitled "Paul MacGregor, AKA Barney the dinosaur".
[12] In cross-examination, Mr. MacGregor's counsel suggested there were only 300 persons who purchased tickets (versus those in attendance) to which Mr. Galetta said he was told he had bought the four hundredth and first ticket. Mr. MacGregor's counsel suggested Mr. MacGregor was not engaged in selling the balloons; Mr. Galetta was questioned on the purchase price; he said he paid $4.00.
[13] Counsel for Mr. MacGregor concentrated his cross-examination on the blind spot which might have existed between the time Mr. Galetta saw Mr. MacGregor dressing up and the time Mr. Galetta left the dressing room, was in attendance and left the Hall. Mr. Galetta admitted not seeing Mr. MacGregor taking off his BARNEY costume. The performance could have been by someone other than Paul MacGregor, his counsel supported. Mr. Galetta clearly answered he did not see any other person in a BARNEY costume but Paul MacGregor.
[14] Based on the evidence described, I am satisfied, beyond a reasonable doubt, Mr. MacGregor performed as BARNEY at Hazelridge Hall on October 6, 1999 in breach of several paragraphs of the injunction issued by Pinard J., namely paragraph (a), (b), (c) and (f). There can be no doubt Mr. MacGregor was in Hazelridge that night, was at the Hall, was dressing up in a BARNEY costume for the purpose of giving a live musical performance as advertised and there were no other BARNEY persons there. I can come to no other conclusion Paul MacGregor performed as BARNEY that night.
[15] Counsel for the Lyons Group attempted to prove another instance of breach of injunction through the filing of sheriff's documentation relating to a performance on December 8, 1999 at the Centennial Auditorium in Saskatoon, Saskatchewan. Paul MacGregor was served with a writ of seizure at the Centennial Auditorium by the Sheriff's Office; some items seized were a large purple and green dinosaur costume and an advertising poster. Counsel for Mr. MacGregor objected. I did not allow this evidence in. Rule 470(1) is clear "[U]nless the Court directs otherwise, evidence on a motion for a contempt order, ... shall be oral". The documentation related to the Saskatoon event could not be admitted as Mr. MacGregor's counsel could not cross-examine anyone on it.
[16] Another matter should be addressed. Counsel for the Lyons Group referred to the Court record indicating the seizure of two packages of BARNEY balloons, 100 computer generated BARNEY photos and a BARNEY costume in January 1999 in Toronto. Counsel for Mr. MacGregor did not object to the mention of this seizure and said his understanding was the seizure was at the defendant's father's address. I consider this an admission of the fact the seizure of the items described took place and Paul MacGregor was a principal actor in possession of material breaching the injunction.
Penalty
[17] Counsel for the Lyons Group seeks a fine of $20,000 and solicitor-client costs. He cites the injunction, the January 1999 seizure, an attempted settlement which did not materialize and the Hazelridge performance. He says, in respect of that performance, the defendant obtained 100% of the proceeds, 80% as his normal share and 20% which the organizers of the performance waived in his favour if he would attend the Children's Hospital in Winnipeg which he did.
[18] Counsel for the Lyons Group argues the defendant breached many aspects of the injunction order issued by Pinard J. He relies on Baxter Travenol Laboratories v. Cutter (Canada) Ltd., [1987] 2 F.C. 557 (F.C.A.).
[19] Counsel for the defendant left the matter of the fine to my discretion pointing out, however, the defendant is an individual who does not have a lot of money; he argued the reason the agreement between the parties was not concluded was because the Lyons Group had sought the payment of $5,000 which the defendant could not afford. This statement was not contradicted by counsel to the Lyons Group. Counsel for the defendant said his client was repentant.
[20] In this case, neither party submitted to the Court a range of fines assessed in similar circumstances which would guide me in levying the appropriate fine here. I am therefore left to first principles.
[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". 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".
[22] This last statement by Urie J.A. echoes the words of Justice Rouleau of this Court in Montres Rolex S.A. et al. v. Herson et al., 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". Dubé J. of this Court in Louis Vuitton S.A. v. Tokyo-Do Enterprises Inc. et al., 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). Dubé 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 et al. (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).
[24] Applying these principles, I believe it is fair and reasonable to assess a fine against the defendant for this first contempt offence of $3,000 and solicitor-client costs of up to a maximum of $2,000. In assessing the fine, I have taken into account the amount of revenue earned by the defendant for the performance at Hazelridge, including related activities of balloon sale. There was no evidence as to the number of children at the photo op. I adjusted the revenues by an amount I estimated in order to yield no profit to the defendant for his Hazelridge adventure so as to not provide him with an incentive to further disobey the Court's injunction which is the primary purpose in assessing the fine. I find no strong mitigating factors in favour of the defendant. It seems to me he had knowingly breached the injunction against him. The only element which tempers my comments is an indication by the defendant through his counsel that he wanted to turn the page on this issue and come to terms with the entire BARNEY question. I encourage the defendant to do so. If there are further contempt convictions against the defendant related to the proprietary rights of the Lyons Group arising out of a breach of Pinard J.' interlocutory injunction, those repetitions will undoubtedly augment the amount of any future fine.
DISPOSITION
[25] The defendant is guilty of contempt of the order of Pinard J. dated January 11, 1999. I assess a fine of $3,000 and solicitor-client costs to a maximum of $2,000 payable within 60 days from the date of this order.
(Sgd.) "F. Lemieux"
Judge
VANCOUVER, BRITISH COLUMBIA
FEBRUARY 24, 2000
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS ON THE RECORD
| COURT FILE NO.: T-1697-98 |
| STYLE OF CAUSE: Lyons Partnership, L.P. |
(a.k.a. The Lyons Group)
v.
Paul MacGregor
| PLACE OF HEARING: Montreal, Quebec |
| DATE OF HEARING: December 21, 1999 |
| REASONS FOR ORDER OF Lemieux, J. |
| DATED: February 24, 2000 |
APPEARANCES:
| Mr. Norhand Laurendeau For the Plaintiff |
| Mr. Harvey Toulch For the Defendant |
SOLICITORS OF RECORD:
Robin Sheppard Shapiro
| Montreal, Quebec For the Plaintiff |
Mr. Harvey Toulch
| Montreal, Quebec For the Defendant |