A-111-87
Maison des Semiconducteurs Ltée/House of
Semiconductors Ltd. (Appellant) (Defendant)
v.
Apple Computer, Inc. and Apple Canada Inc.
(Respondents) (Plaintiffs)
INDEXED AS: APPLE COMPUTER, INC. V. MACKINTOSH COM
PUTERS LTD. (CA.)
Court of Appeal, Heald, Hugessen and Stone
JJ.—Toronto, March 10; Ottawa, March 17,
1988.
Practice — Contempt of court — Affidavit evidence and
cross-examination thereon basis for guilty finding in contempt
proceedings — No viva voce evidence — Conflicting versions
of facts resolved in favour of respondent on balance of
probabilities — Contempt proceedings criminal — Proof
beyond reasonable doubt required — Restricted opportunity to
present viva voce evidence involving disclosure of defence
without knowing particulars of accusation — Right to remain
silent until knowing case to be met.
This was an appeal from an order finding the appellant guilty
of contempt of Court for breach of an injunction. The material
on the motion for contempt consisted of affidavits and the
transcripts of the cross-examinations upon some of them. On an
application for leave to adduce viva voce evidence at the
hearing of the contempt motion, the Motions Judge ordered the
applicants to file affidavits of their proposed evidence, with the
respondents having the right to cross-examine on the affidavits
and the applicants having leave to elect to repeat their evidence,
viva voce, at the hearing. Counsel for the appellant elected not
to "repeat" viva voce at the hearing the affidavit evidence, as
this would give the other side two chances to cross-examine
witnesses and then an opportunity of calling rebuttal evidence.
Held, the appeal should be allowed.
The Motions Judge was faced with innumerable conflicts in
the affidavit evidence, which she attempted to resolve. This
resulted in some adverse findings of credibility in respect of
some of the deponents who swore affidavits in support of the
appellant's position. It was unfortunate that she was forced to
make such crucial findings of fact without the advantage of
hearing the viva voce testimony of the witnesses, observing their
demeanour in the witness box and assessing their responses to
searching cross-examination by opposing counsel. The Motions
Judge resolved the conflict in favour of the respondent based on
a balance of probabilities. Contempt of court is, however, a
criminal offence and proof beyond a reasonable doubt is
required. That test had not been met. The decisions of the
Ontario Court of Appeal in R. v. Jetco Manufacturing Ltd.,
(standard of proof governing the trial of criminal offences must
be satisfied in contempt proceedings) and R. v. B.E.S.T. Plat
ing Shoppe (alleged contemner entitled to trial of an issue with
the calling of witnesses to give viva voce evidence) were
persuasive.
Although the Motions Judge gave the appellant an opportu
nity to adduce viva voce evidence, the offer was highly restric
tive in that it was only given leave to "repeat its affidavit
evidence." Also, the order was objectionable for the reasons
mentioned by appellant's counsel. More importantly, the proce
dure obligated the person charged with contempt to disclose by
way of affidavit his defence before he knew the particulars of
the accusation. The contemner has the right to know, specifi
cally, the case he has to meet and to remain silent until that
time.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Federal Court Rules, C.R.C., c. 663, RR. 319(4), 2500.
CASES JUDICIALLY CONSIDERED
APPLIED:
In re Bramblevale Ltd., [ 1970] Ch. 128 (C.A.); R. v.
Jetco Manufacturing Ltd. and Alexander (1987), 57
O.R. (2d) 776 (C.A.); R. v. B.E.S.T. Plating Shoppe Ltd.
and Siapas (1987), 59 O.R. (2d) 145 (C.A.); Selection
Testing Consultations International Ltd. v. Humanex
International Inc., [1987] 2 F.C. 405; 14 C.P.R. (3d) 234
(T.D.).
COUNSEL:
Robert H. C. MacFarlane for appellant.
Alfred S. Schorr and Joseph I. Etigson for
respondents.
SOLICITORS:
Fitzsimmons, MacFarlane, Toronto, for
appellant.
Alfred S. Schorr, Toronto, and Hughes, Etig-
son, Concord, Ontario, for respondents.
The following are the reasons for judgment
rendered in English by
HEALD J.: This is an appeal from an order of
the Trial Division dated January 30, 1987 [[1987]
3 F.C. 452], wherein the appellant was found
guilty of contempt of Court by reason of being in
breach of an injunction contained in a judgment of
the Trial Division issued on April 29, 1986 [[1987]
1 F.C. 173].
The motion for contempt was made pursuant to
the provisions of Rule 2500 [Federal Court Rules,
C.R.C., c. 663]. The learned Motions Judge had
no viva voce evidence before her at the hearing of
the motion. The material on the motion consisted
of some 14 affidavits and the transcripts of the
cross-examinations on nine of those affidavits. The
order here in issue ordered the appellant to pay
into Court "the sum of $100,000 by way of cash or
such bond as may be approved by the Registrar of
this Court as security against any future infringe
ment." By a further order dated September 10,
1987, the Motions Judge stayed the order for
payment into Court on terms that the appellant
"pay $10,000 into Court by way of a fine."
In the Trial Division, by the injunction issued on
April 29, 1986 and referred to supra, the appellant
and its servants and agents were restrained from:
"importing, selling or distributing computers or
computer components under the name Mackintosh
or otherwise which contain a copy or substantial
copy of either of the literary works `AUTOSTART
ROM' or `APPLESOFT', or in any other way infring
ing the plaintiffs' copyright in those works." The
order further required the appellant to "deliver up
to the plaintiffs all copies or substantial copies of
the plaintiffs' literary works `AUTOSTART ROM'
and `APPLESOFT' in whatever material form they
might be and which are in the possession, power,
custody or control of' the defendant and "includ-
ing any contrivances or devices containing such
copies or substantial copies."
It should be noted, at this juncture, that the
respondent Apple Canada Inc., was not a party at
the trial of this action. The Federal Court of
Appeal by judgment dated October 13, 1987
affirmed the judgment of the Trial Division dated
April 29, 1986 but varied it so as to delete all
references to Apple Canada Inc. as a plaintiff.
The hearing on the contempt motion was sched
uled to commence on November 24, 1986. On
November 12, 1986, the appellant, along with its
co-accused, brought a motion pursuant to Rule
319(4) for leave to adduce viva voce evidence from
several witnesses at the hearing on the contempt
motion. The learned Motions Judge ordered inter
alia:
1. IT IS ORDERED that the Applicants shall serve and file
affidavits of their proposed evidence on or before the 19th of
November, 1986, if evidence is to be called.
2. AND IT IS FURTHER ORDERED that if affidavits are deliv
ered aforesaid, the Respondent shall have leave to cross-exam
ine thereon prior to the hearing and to seek such adjournment
of the hearing, as may be required in that regard.
3. AND IT IS FURTHER ORDERED that the Applicants shall
have leave to elect to repeat their evidence, viva voce, at the
hearing and in that event counsel for the Respondent shall have
a right to further cross-examine the Applicants who testify.
4. AND IT IS FURTHER ORDERED that the Respondent shall
have leave to call evidence by way of Reply.
Counsel for the appellant advised us, at the
hearing of the appeal, that he decided not to
accept the invitation implicit in paragraph 3 supra,
to "repeat" viva voce at the hearing the affidavit
evidence filed in support of the appellant's position
on the contempt motion. He said that, in his view,
the November 12 order supra, was prejudicial to
the interests of the appellant in that it afforded to
the respondent two opportunities to cross-examine
the appellant's witnesses as well as giving to the
respondent an opportunity to call rebuttal evidence
thereafter.
In the result, no viva voce evidence was called at
the hearing of the contempt motion before the
learned Motions Judge. She decided this motion
on the basis of the affidavits before her together
with the transcripts of the cross-examinations
mentioned supra.
The Decision of the learned Motions Judge
The learned Motions Judge delivered detailed
and carefully considered reasons for her decision.
A perusal of her reasons makes it abundantly
clear, in my view, that she struggled throughout
those reasons to resolve the innumerable conflicts
in the affidavit evidence before her. She made
several references to irreconcilability of the
evidence.' Time after time throughout her reasons,
she was forced to resolve these conflicts, all con
tained in affidavit evidence and the cross-examina
tions thereon. As a result she made some rather
forceful adverse findings of credibility in respect of
some of the deponents who swore affidavits in
support of the appellant's position. I think it most
unfortunate that she was forced to make such
crucial findings of fact without the benefit of the
traditional and irreplaceable tool so vital to the
performance of the function of a trier of fact,
namely the advantage of hearing the viva voce
testimony of the witnesses, of observing their
demeanour in the witness box and of assessing
their responses to searching cross-examination by
opposing counsel.
To properly consider the impact of the complete
absence of viva voce evidence on this motion, I
think it important to keep in mind the context in
which this deficiency took place. This is a con
tempt of Court procedure. Lord Denning M.R.
articulated the proper approach succinctly in the
case of In re Bramblevale Ltd., [1970] Ch. 128
(C.A.), at page 137:
A contempt of court is an offence of a criminal character. A
man may be sent to prison for it. It must be satisfactorily
proved. To use the time-honoured phrase, it must be proved
beyond reasonable doubt
Where there are two equally consistent possibilities open to the
court, it is not right to hold that the offence is proved beyond
reasonable doubt.
In the case at bar, there has been advanced
through the various affidavits filed two diametri
cally opposite versions of the facts relevant to the
subject-matter of this motion. The learned
Motions Judge considered the opposing versions of
the facts as set out in the affidavits and the
cross-examinations thereon and decided in favour
of the respondent's version.
If it were possible to decide this motion on a
balance of probabilities, I can say quite frankly
that I would not interfere with the disposition
arrived at by the learned Motions Judge. However,
as noted supra, that is not the test on a motion of
' See for example:
(a) at p. 460—a reference to "conflicting evidence";
(b) at p. 462—a further reference to "the conflicting version
of the facts";
this kind. The test is the one required for offences
of a criminal nature—namely, proof beyond a
reasonable doubt. I am not prepared to say, on this
record, that contempt has been shown, beyond a
reasonable doubt.
I am fortified in this conclusion by two recent
decisions of the Ontario Court of Appeal. I refer to
the Jetco case 2 and the B.E.S.T. Plating case.'
The Jetco case, involved an accused corporation
and its president who had been found in contempt
of Court of a prohibition order made pursuant to
provisions of the Ontario Municipal Act [R.S.O.
1980, c. 302]. The contempt application was
decided solely on affidavit evidence and cross-
examinations thereon. No viva voce evidence was
heard. The Ontario Court of Appeal set aside the
conviction for contempt of Court. Brooke J.A. in
delivering the judgment of the Court said (page
780):
Thus, while civil procedures are involved, because the allega
tion is that a public wrong was done and the liberty of the
subject is at stake, the proceedings are essentially criminal in
nature. The standard of proof governing the trial of criminal
offences must be satisfied. The appellants are entitled to the
presumption of innocence, and the onus is on the prosecution to
prove their guilt beyond a reasonable doubt.
And, at page 781:
When there are controverted facts relating to matters essential
to a decision as to whether a party is in contempt of court,
those facts cannot be found by an assessment of the credibility
of deponents who have not been seen or heard by the trier of
fact, as was done in this case. The judge here quite simply was
in no position to make the factual determination upon which his
contempt order was predicated. On the disputed state of the
evidence before him he could not properly conclude that the
municipality had established beyond a reasonable doubt that
the appellants were aware of the prohibition order of the justice
of the peace. In the circumstances of this case, a trial of the
issue raised by the application ought to have been ordered.
There is a striking similarity between the facts
in Jetco, supra, and the case at bar. Accordingly, I
find the well-reasoned statements by Mr. Justice
Brooke supra, to be persuasive indeed. To like
2 R. v. Jetco Manufacturing Ltd. and Alexander (1987), 57
O.R. (2d) 776 (C.A.).
3 R. v. B.E.S.T. Plating Shoppe Ltd. and Siapas (1987), 59
O.R. (2d) 145 (C.A.).
effect is the B.E.S.T. case, also a decision of the
Ontario Court of Appeal. The headnote reads [at
page 146]:
Where affidavits filed by the parties to contempt proceedings
contain contradictory statements with respect to material facts
or issues in the case, an alleged contemner is entitled to have a
trial of an issue with the calling of witnesses to give viva voce
evidence if he so requests. A refusal to order a trial of an issue
in those circumstances would amount to a breach of the
principles of fundamental justice.
It is to be noted that in the B.E.S.T. case, the
Motions Judge refused to direct the trial of an
issue. In the Jetco case, it is not apparent from the
reasons whether there was a request for and a
refusal of an oral hearing. In any event, I do not
think that the presence or absence of a refusal to
hear viva voce evidence materially affects the per
suasive nature of these two unanimous decisions of
the Ontario Court of Appeal. In the case at bar,
the learned Motions Judge by her order of Novem-
ber 12, 1986, did afford to the appellant an oppor
tunity to adduce viva voce evidence. However, that
offer was highly restrictive in scope. For example,
the appellant was only given leave to "repeat its
affidavit evidence". It was also subject to the
objection alluded to by counsel for the appellant in
his submissions to us supra. More importantly
however, the procedure followed by the Motions
Judge in this case obligated the person charged
with contempt to disclose by way of affidavit his
defence before the onus which the accusor carries
had been discharged. The contemner has the right
to know, specifically, the case he has to meet. As
stated by Rouleau J. in the Selection Testing
case: 4
Whether contempt of Court proceedings are characterized as
criminal or civil, the person charged shall always be entitled to
the unassailable bastion of common law, that is the right to
know the particulars of the accusation and the right to remain
silent until the accusor has met and discharged the onus.
Remedy
The order dated January 30, 1987, found the
appellant guilty of contempt of Court and ordered
Selection Testing Consultations International Ltd. v.
Humanex International Inc., [1987] 2 F.C. 405, at p. 410; 14
C.P.R. (3d) 234 (T.D.), at p. 238.
it to pay into Court the sum of $100,000 by way of
cash or such bond as may be approved by the
Court's Registrar as security against any future
infringement. The appeal should be allowed and
the conviction for contempt and the above-
described penalty therefore should be set aside. As
a consequence, the further order dated September
10, 1987, staying portions of the order of January
30, 1987, must, necessarily, be set aside. The
matter should be referred back to the Trial Divi
sion on the basis that the respondent, if so advised,
is at liberty to reapply for an order of contempt
against the appellant in proceedings which will
involve a trial of the issue on viva voce evidence.
In so far as costs are concerned, I would make
no order as to costs either here or in the Trial
Division.
HUGESSEN J.: I agree.
STONE J.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.