Digests

Coca-Cola Ltd. v. Pardhan

T-2685-95

Lutfy J.

19/1/00

14 pp.

Penalty and costs--Defendant guilty of contempt of court for breaching interlocutory injunction restraining him from exporting Coca-Cola products from Canada--As contumacious acts committed before coming into force of Federal Court Rules, 1998, applicable penalty set out in former Federal Court Rules, R. 355--R. 355 providing anyone guilty of contempt of court liable to fine not exceeding $5,000 or to imprisonment for not more than one year--Dismissal of action, dissolution of injunction prior to show cause hearing not defence to contempt action, but mitigating matter--Dire consequences should not result from violation of invalid order: Canada (Human Rights Commission) v. Canadian Liberty Net, [1996] 1 F.C. 787 (C.A.)--Defendant should not be sentenced to imprisonment for conduct which would have been legal were it not in breach of Court order--Plaintiffs' argument total fine should reflect multiple of number of shipments of Coca-Cola product exported from Canada, rejected for four reasons--(1) Show cause order cast in general terms--(2) Imposition of fine of magnitude suggested by plaintiffs ($105,300) contrary to plain meaning of r. 355(2) providing fine shall not exceed $5,000 in case of individual--(3) No case law supporting plaintiffs' submission multiple fines could be imposed where, as here, single show cause order, directly linked to single injunction, cast in general terms--Louis Vuitton S.A. v. Tokyo Do Enterprises Inc. (1990), 37 C.P.R (3d) 8 (F.C.T.D.); Polo Ralph Lauren Corp. v. Cato, [1990] 3 F.C. 541 (T.D.) distinguished--(4) Plaintiffs submitting not making sense from policy perspective to treat series of separate acts which violate order as if only one act of contempt; if only one finding of contempt, one penalty can result from multiple breaches of order, contemnors will be encouraged to flout process of Court repeatedly--R. 472(c) of Federal Court Rules, 1998 placing no limitation on quantum of fine--Strength of policy submission cannot be used to detriment of defendants where former Rules specifically provided for maximum monetary penalty of $5,000 and where show cause order issued in such general terms--Dismissal of plaintiffs' action, dissolution of injunction principal mitigating factor--Coupled with subject-matter of litigation, dictating penalty limited to monetary fine--At end of hearing on penalty, costs, defendant offering form of apology to Court--Appropriate penalty fine of $4,000--Policy underlying practice of awarding costs on solicitor and client basis in matters of contempt that party who assists Court in enforcement of orders and in enforcement of respect for orders should not be out of pocket for having been put to that trouble: Pfizer Canada Inc. v. Apotex Inc. (1998), 86 C.P.R. (3d) 33 (F.C.T.D.)--Plaintiffs suggesting costs on solicitor and client basis approximately $125,000, not including disbursements of $100,000 paid to investigators, and $33,000 to a solicitor for time spent in preparation for and actual attendance at trial to testify concerning factual matters--Court informed, after pronouncing penalty imposed, that offers to settle made during contempt trial, subject to Court's approval--Although plaintiffs' role in prosecuting contempt proceedings serving to protect integrity of order issued by Court, balance should be struck in awarding costs between public interest and plaintiffs' private interest in litigation i.e. protection of reputation of trade-marks--Two guiding principles in assessment of costs against defendant: (1) in matters of contempt, plaintiff may be awarded reasonable costs, on solicitor and client basis; (2) imposition of costs should not result in undue punishment, particularly where order violated found to be invalid--Offer to settle also considered, in accordance with r. 400(3)(e), keeping in mind not accepted during limited period open for acceptance--Party and party costs representing approximately one third of solicitor and client costs, excluding disbursements, being sought by plaintiffs--Even taking into account dissolution of injunction, no reason to limit plaintiffs to party and party costs--In June and July 1998 defendant, with knowledge of substantially all plaintiffs' evidence adduced in Court, refused offer to admit liability on contempt charge and to pay fine of $4,000 and costs on party and party scale--That refusal unduly extended litigation considered in determination of reasonable costs--Costs fixed at $80,000 inclusive of all disbursements, except for additional amount of $15,000 with respect to investigators--Federal Court Rules, C.R.C., c. 663, R. 355--Federal Court Rules, 1998, SOR/98-106, rr. 400, 472.