Date: 20000831
Docket: T-2569-96
Ottawa, Ontario, this 31st day of August 2000
PRESENT: THE HONOURABLE MR. JUSTICE PELLETIER
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 CHUN 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, 174866 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 TRADER 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
REASONS FOR ORDER AND ORDER
PELLETIER J.
[1] On July 7, 2000, investigators for the plaintiffs determined that counterfeit Louis Vuitton goods were being sold in the Chinatown Night Market, and in particular in stalls 1, 2, 3 and 4. On the strength of that information, Mr. Justice Rouleau issued an order on July 10, 2000 which was effective against a number of persons including "John Doe's and Jane Doe's operating a market stall at a street market located in or about Pender and Keefer Streets in Vancouver, B.C." That order was a more or less typical Anton Piller Order in that it ordered the plaintiffs to consent to a search of their premises, ordered them to deliver up all infringing goods, and provided for a review of the execution of the order within 14 days of service of the order upon the defendants.
[2] On July 15, 2000, the order was executed against certain persons including those carrying on business from stalls K5 and K23 of the Chinatown Night Market which I take to be the stalls 1, 2, 3 and 4 referred to in the affidavit of the investigator. Goods were seized from both stalls. However, there were difficulties with service of the order. In the case of stall K5, the occupants refused to accept the documents which were tendered to them in an envelope so the lawyer, Mr. Simon Adams, "set the documents on the vendor's stool behind the stall". His affidavit is silent as to whether the materials were left in place or not but for reasons which will become apparent, it seems likely that the materials were not left with the person apparently in charge of the stall.
[3] In the case of stall K23, the persons in charge of the stall refused to take responsibility for the documents so the lawyer directing the execution of the order took the documents away with her.
[4] There is evidence in the form of the sworn opinion of Nathalie Bueno that the goods which were seized are counterfeit.
[5] Information received from the market management on July 15th, established that the occupant of stall K5 was Stacey Lin and that the occupant of stall K23 was Yu Fai Chan ("the K5 and K23 defendants").
[6] It appears that attempts were made to serve the order of Rouleau J. on Ms. Lin and Mr. Chan at their residences on July 17th but no one answered the door.1
[7] From the representations of counsel and a perusal of the Court file, it appears that after the execution of the Rouleau order on July 15th, it was discovered that confidential information had inadvertently been included in the order. Counsel for the plaintiffs was able to persuade Madam Justice Heneghan to hear her on an emergency basis and on July 18, 2000 she issued an order in much the same terms as Rouleau J. against the same "John Doe's and Jane Doe's operating a market stall at a street market located in or about Pender and Keefer Streets in Vancouver B.C." but deleting the confidential information. The intention in proceeding in this way was to protect the confidential information. It appears that counsel believed that this order could be served in substitution for the order of Rouleau J.2 The order issued by Heneghan J. does not make any reference to the order of Rouleau J.
[8] It appears from the representations of counsel dated July 27, 2000 that envelopes containing the Heneghan order and copies of material relied upon to obtain the Heneghan order were left with adults at the addresses of Ms. Lin and Mr. Chan3. No mention is made of service of a Notice of Motion for review of the execution of the order of Rouleau J.
[9] The order of Heneghan J. was said to be effective until August 1, 2000. On July 31, 2000, Dawson J. was faced with a motion which requested continuation of the injunction contained in the Heneghan order and an order with respect to the interim custody of the property seized pursuant to the Rouleau order. However, the draft order included in the Motion Record was to the effect that "the terms and conditions of the order granted by The Honourable Mr. Justice Rouleau on July 18, 2000 shall be extended and remain in force against the defendants renting or otherwise operating stall No. K5 and stall No. K23 at the Chinatown Night Market ... until such time as a further order of this Court or judgment is entered." There is no order of Mr. Justice Rouleau dated July 18, 2000.
[10] Dawson J. was rightly concerned about the absence of a review of the execution which had taken place on July 15th. She made orders in respect of each of the stall occupants enjoining them from dealing in counterfeit VUITTON goods. She then required the plaintiffs to attend before the Court on August 14, 2000 to seek review of the execution of the Heneghan order dated July 18, 2000 and ancillary relief. I am satisfied that the reference to the execution of Heneghan order dated July 18 was the result of the representations of counsel that it was the Heneghan order which was served upon the defendants even though the plaintiffs relied upon the Rouleau order at the time of execution. Because of the plaintiffs' concerns about the confidential information in the Rouleau order, the plaintiffs had no interest in drawing attention to it.
[11] I am now asked to review the execution of the Heneghan order pursuant to the order of Madam Justice Dawson. It is clear that there was only one execution which can be the subject of review, that which occurred on July 15, 2000.
[12] The orders of Rouleau J. and Heneghan J. both provide that:
| 5. The New Defendants [John Doe's and Jane Doe's operating a market stall at a street market in or about Pender and Keefer Streets in Vancouver British Columbia] ...shall deliver, immediately upon service of this Order, to the solicitors for the Plaintiffs ... following the taking of any copies required, all the following items articles, printed material ... which may be in their possession or control: |
| a) all counterfeit VUITTON Items or other articles bearing the VUITTON Proprietary Trade Dress, the VUITTON Registered Trade-marks or any trademark or trade dress confusingly similar therewith; and |
| b) any printed material... or other articles bearing the VUITTON Registered Trade-marks or the VUITTON Proprietary Trade Dress. |
| 10. The persons serving this Order shall serve upon any Defendant so served with this Order a Notice of Motion to have this Order reviewed, such Notice of Motion to be returnable at the sittings of this Court within fourteen (14) days of the service of this Order or so soon thereafter as an application may be heard. |
Emphasis added.
[13] In my view, it makes no difference whether the review of the execution is conducted under the Rouleau order or the Heneghan order. Both orders provide that the defendants were only required to consent to the removal of their goods upon service of the order upon them. The plaintiffs had no legal authority to seize the goods of Ms. Lin and Mr. Chan except under the terms of the orders. The orders are in a form drafted by the plaintiffs' solicitors and its contents should have been known to them in any event. The failure to serve the order by leaving it with the persons in charge of the stalls is an instance of non-compliance with the order.
[14] It is no answer to say that the persons in the stalls would not accept service of the documents. Service, except in the case of solicitors, is not a matter of acceptance. The documents should have been removed from the envelopes and left with the occupants. If service were challenged by Ms. Lin or Mr. Chan, the plaintiffs could have relied upon Rule 128 (1)(c) of the Federal Court Rules, 1998, and, if need be, Rule 147.4
[15] The effect of the lack of service is not attenuated by the consent of the occupants of the stall to the search of the stalls by the plaintiffs' representatives. This order was obtained ex parte. Courts would not issue such orders if they could not rely upon those obtaining them to make full disclosure in obtaining them, and to comply with them strictly in executing them. This obligation to the Court is not displaced by anything done or not done by those upon whom the order is executed. The obligation is owed to the Court.
[16] In addition, the orders also imposed a positive obligation on the plaintiffs to seek review of their execution within 14 days of service. This obligation cannot be avoided by failing to serve the order pursuant to which the execution purports to be authorized. It is the seizure of the goods which calls for the review, and time begins to run from that date. The plaintiffs only moved for review of the execution when ordered to do so by Dawson J. The failure to seek review of the execution as provided in the order is a breach of the order, and a breach of the confidence reposed by the Court in the solicitors who obtained the order.
[17] These breaches cannot be excused by the fact that there is a prima facie case that the goods are in fact counterfeit and that the persons whose property has been seized have not taken the trouble to appear to defend their interests. The purpose of the review is to allow the Court to assess the conduct of the plaintiffs' agents in their execution of an extraordinary remedy. The fact that the plaintiffs' rights have been infringed is the raison d'être for the Anton Piller Order. It cannot be the justification for the failure to comply with its terms.
[18] In Nike Canada Ltd v. Jane Doe, [1999] F.C.J. No. 1183, (1999), 174 F.T.R. 131, Reed J. was faced with a situation where an Anton Piller Order had been executed in connection with a criminal investigation of trade mark infringement. The plaintiffs disclaimed any reliance upon the seizure provisions of the order but came to Court on the return of the review motion seeking injunctive relief against the various persons upon whom the order had been served. Reed J. found that the order was intended to be used exclusively in connection with civil proceedings and declined to make the order sought. She simply dismissed the review motions, the effect of which is that the interim injunctions against the proposed defendants simply lapsed . She did not have to deal with the issue of the seized property because it was in the custody of the police.
[19] In this case, counsel for the plaintiffs took strong objection to the possible return of the seized goods to Ms. Lin and Mr. Chan since the evidence is that they are counterfeit and their only use to the individuals in question is as inventory. The difficulty is that the prima facie proof of counterfeiting was obtained as a result of an unlawful seizure. To ignore the unlawful seizure is to condone it. I decline to do so.
[20] In the result, there will be an order dismissing the plaintiffs' motion and ordering the return of the goods to the persons from whom they were seized. The interim injunctions contained in the orders obtained by the plaintiffs have all since lapsed and will not be replaced. At the hearing of the motion, I made an oral order that Ms. Lin and Mr. Chan would be added as defendants to the Statement of Claim. That order will be set aside and replaced by an order that they may be added as defendants to the Statement of Claim upon filing of proof of service of the Statement of Claim upon them. Since no one appeared on the motion on behalf of the defendants, there will be no order as to costs.
[21] A copy of these reasons for order will be served upon Ms. Lin and Mr. Chan by leaving them with the person apparently in charge of the stalls where the goods were seized. They should note carefully that the Court has not approved in any way their right to sell the goods which are the subject of this motion. There is evidence before the Court that the goods are counterfeit. It they are counterfeit and Ms. Lin and Mr. Chan continue to sell them, they expose themselves to the possibility of further action including injunction, and a claim for damages including punitive damages. The dismissal of this motion is without prejudice to the right of the plaintiffs to apply for a new order, but upon fresh evidence only, should it be shown that counterfeit goods are being sold.
ORDER
Upon reviewing the plaintiffs' Notice of Motion and the material filed in support thereof, it is hereby ordered that the execution of the order of Mr. Justice Rouleau is hereby set aside upon the following terms:
| 1) the plaintiffs shall forthwith return to Stacey Lin and Yu Fai Chan the goods seized from stalls K5 and K23 at the Chinatown Night Market, Vancouver, on July 15, 2000 by returning the goods to those stalls during the hours of operation of the Night Market. |
| 2) to the extent that the injunctions against Stacey Lin and Yu Fai Chan have not otherwise lapsed, they are hereby dissolved. |
| 3) a copy of this order shall be served upon Stacey Lin and Yu Fai Chan by leaving it with the person apparently in charge of stalls K5 and K23 of the Chinatown Night Market. |
| 4) this order is without prejudice to the rights of the plaintiffs to apply for a fresh order for an injunction and ancillary relief in the event that it can be shown, by fresh evidence, that goods which infringe upon the plaintiffs' valuable intellectual properties are being sold from these or other locations. |
| 5) there shall be no order as to costs. |
"J.D. Denis Pelletier"
Judge
__________________1 Paras 8 and 9 in plaintiffs' written representations dated July 27, 2000 contained in Motion Record filed as no 238.
2 Para 10 in plaintiffs' written representations dated July 27, 2000 contained in Motion Record filed as no. 238
3 Paras 11 and 12 in plaintiffs' written representations dated July 27, 2000 contained in Motion Record filed as no. 238
4 128 (1) Personal service of a document on an individual, other than an individual under a legal disability, is effected: ... (c) where the individual is carrying on a business in Canada, other than a partnership, in a name or style other than the individual's own name, by leaving the document with the person apparently having control or management of the business at any place where the business is carried on in Canada;
128. (1) La signification à personne d'un document à une personne physique, autre qu'une personne qui n'a pas la capacité d'ester en justice, s'effectue selon l'un des modes suivants : ... c) lorsque la personne exploite une entreprise au Canada, autre qu'une société de personnes, sous un nom autre que son nom personnel, par remise du document à la personne qui semble diriger ou gérer tout établissement de l'entreprise situé au Canada;
147. Where a document has been served in a manner not authorized by these Rules or by an order of the Court, the Court may consider the document to have been validly served if it is satisfied that the document came to the notice of the person to be served or that it would have come to that person's notice except for the person's avoidance of service.
147. Lorsqu'un document a été signifié d'une manière non autorisée par les présentes règles ou une ordonnance de la Cour, celle-ci peut considérer la signification comme valide si elle est convaincue que le destinataire en a pris connaissance ou qu'il en aurait pris connaissance s'il ne s'était pas soustrait à la signification.