Bell Media Inc. v. Marshall Macciacchera

Bell Media Inc. v. Marshall Macciacchera
Court (s) Database
Federal Court Decisions
Date
2024-08-21
Neutral citation
2024 FC 1292
File numbers
T-1257-22
Decision Content
Date: 20240821
Docket: T-1257-22
Citation: 2024 FC 1292
Ottawa, Ontario, August 21, 2024
PRESENT: The Honourable Madam Justice Rochester
BETWEEN:
BELL MEDIA INC.
ROGERS MEDIA INC.
COLUMBIA PICTURES INDUSTRIES, INC.
DISNEY ENTERPRISES, INC.
PARAMOUNT PICTURES CORPORATION
UNIVERSAL CITY STUDIOS LLC
UNIVERSAL CITY STUDIOS PRODUCTIONS LLLP
WARNER BROS. ENTERTAINMENT INC.
Plaintiffs
and
MARSHALL MACCIACCHERA dba SMOOTHSTREAMS.TV
ANTONIO MACCIACCHERA dba SMOOTHSTREAMS.TV
Arm Hosting Inc.
STAR HOSTING LIMITED (hONG KONG)
ROMA WORKS LIMITED (HONG KONG)
ROMA WORKS SA (pANAMA)
Defendants
ORDER AND REASONS
Table of Contents
I. Overview 2
II. The Order at Issue and its Subsequent Treatment 9
III. The Charging Order 12
IV. The Witnesses Called by the Parties 15
V. Issues 17
VI. Analysis 17
A. The Law of Contempt 17
B. Anton Piller Orders 20
C. The Protections Against Self-Incrimination 23
D. Contempt is Not a Distinct Proceeding 26
E. Collateral Attack on the Interim Order 30
F. The Alleged Unlawful Execution of the Order 35
G. The Independence of ISS Drapeau 38
H. A Clear and Unequivocal Order 44
I. The Charged Defendants’ Knowledge of the Interim Order 50
J. Charged Defendants Intentionally Failed to Comply with the Interim Order 51
(1) Paragraph 20 52
(2) Paragraph 24 56
(3) Paragraph 25 64
(4) Paragraph 30 66
K. The Court’s Discretion 68
VII. Conclusion 70
VIII. Costs 71
IX. Confidentiality Order 78
I. Overview [1] The Plaintiffs seek an order finding Marshall Macciacchera, Arm Hosting Inc., Star Hosting Limited, and Roma Works Limited, in contempt of court for failing to comply with the terms of an order that contained, among other things, an Anton Piller order and a range of injunctive relief. The underlying dispute between the parties is one of copyright infringement. The Plaintiffs allege that the Defendants have been distributing their television and film content without authorization.
[2] The Plaintiffs, Bell Media Inc. [Bell] and Rogers Media Inc. [Rogers], are Canadian broadcasters that own and operate a number of television stations on which they broadcast a wide variety of programming. Bell and Rogers also broadcast television programming on their respective subscription-based on demand internet streaming services. The Plaintiffs, Columbia Pictures Industries, Inc., Disney Enterprises, Inc., Paramount Pictures Corporation, Universal City Studios LLC, Universal City Studios Productions LLLP, and Warner Bros. Entertainment Inc., are engaged in the production and distribution of motion pictures and television content.
[3] The Defendants are alleged to be operating unauthorized subscription services through which they deliver the Plaintiffs’ copyrighted content through internet infrastructures. As described in detail by Justice Roger Lafrenière in Bell Media Inc v Macciacchera (Smoothstreams.tv), 2022 FC 1139, unauthorized subscription services typically operate on a subscription-based revenue model and provide access to extensive content at a significantly lower price than legitimate services (at paras 29-30). The operators of unauthorized subscription services often process payments through a separate website that is under their control but appears to belong to an unrelated business, thereby distancing themselves from the infringing activities and making it extremely difficult for rights holders to lodge complaints with third-party payment platforms (ibid at para 32).
[4] On June 17, 2022, the Plaintiffs commenced the present action against the Defendants alleging that they have been operating a number of unauthorized subscription services, whereby they sold and delivered television and motion picture content to subscribers through the internet without obtaining authorization from the copyright owners. The Plaintiffs allege that the Defendants have jointly engaged in the development, operation, maintenance, updating, hosting, distribution and sale of unauthorized subscription services, including by operating ancillary payment processing services and distributing ancillary software applications that provide access to the streaming services. The Plaintiffs allege that these unauthorized streaming services provide access to a vast amount of television content and motion pictures for which the copyright is owned by the Plaintiffs.
[5] The Defendants, Antonio Macciacchera and his son, Marshall Macciacchera, are alleged to be the directing minds of the corporate Defendants. The Defendants are alleged, either alone or with associates, to have been operating a number of unauthorized subscription services under an umbrella brand called “Smooth Streams” [SSTV Services]. At the time the action was instituted, the Plaintiffs were aware of three active services under the SSTV Services, known as Live247, StreamTVNow, and StarStreams TV.
[6] In conjunction with commencing the present action, the Plaintiffs brought an ex parte motion for an interim injunction, an Anton Piller Order, and other ancillary orders against the Defendants. Following an in camera hearing, on June 28, 2022, I granted the Plaintiffs’ motion and issued the order for an interim injunction pursuant to Rule 374 of the Federal Courts Rules, SOR/98-106 [Rules], an Anton Piller Order pursuant to Rule 377 of the Rules, and other ancillary orders [Interim Order].
[7] The Interim Order contained, among other things, an interim injunction which enjoined the Defendants from engaging in certain activities related to the operation of SSTV Services or other unauthorized streaming services. It also enjoins the Defendants from dissipating, transferring or otherwise concealing assets, along with ordering them to disclose certain financial information. It authorizes an independent supervising solicitor [ISS] to search the premises identified in the Interim Order in order to seize and preserve certain evidence. In addition, the Interim Order notifies the Defendants that if they fail to comply they risk being found to be in contempt of Court and subject to a fine and/or imprisonment. The contents of the Interim Order are described in detail in Section II of the present Order and Reasons.
[8] The Interim Order was served on the Defendants on July 14, 2022. With respect to Marshall Macciacchera, the Interim Order was executed over a period of two days by an ISS, Me Daniel Drapeau [ISS Drapeau], and his team, at two locations located in Barrie, Ontario: (a) Marshall Macciacchera’s residence [Residence]; and (b) a commercial facility [Commercial Premises] [collectively, the Premises]. With respect to Antonio Macciacchera, a separate ISS sought to execute the Interim Order at his residence in Woodbridge, Ontario, but Antonio Macciacchera refused entry.
[9] Upon being served with the Interim Order, and prior to the commencement of the search of the Premises, Marshall Macciacchera was provided with a detailed explanation by ISS Drapeau, in plain language, of the terms of the Interim Order and the consequences should he fail to comply. Marshall Macciacchera was equally provided with the opportunity to ask questions and to seek the advice of counsel. The execution of the Interim Order, including the detailed explanation by ISS Drapeau and the subsequence search of the Premises, was captured on video by a videographer forming part of ISS Drapeau’s team.
[10] Following the execution of the Interim Order, the Plaintiffs sought an order pursuant to Rule 467 of the Rules charging Marshall Macciacchera, and three of the corporate Defendants, Arm Hosting Inc., Star Hosting Limited, and Roma Works Limited [Corporate Defendants] with contempt of the Interim Order. Marshall Macciacchera is the president of Arm Hosting Inc. and the sole director of each of the Corporate Defendants. The Plaintiffs alleged that Marshall Macciacchera and the Corporate Defendants refused to comply with many aspects of the Interim Order.
[11] On July 28, 2022, Justice Lafrenière concluded, based on the evidence before him, that a prima facie case of contempt had been made out by the Plaintiffs (Bell Media Inc v Macciacchera, 2022 FC 1139 at para 58 [Charging Order]). Justice Lafrenière found that the Plaintiffs “were able to uncover evidence of a sophisticated operation running out of Marshall’s residence and the [Commercial Premises].” (Charging Order at para 46). He further noted that, during the execution of the Interim Order, the Plaintiffs had “seized and preserved evidence that includes dozens of television receivers, encoders, and servers allegedly responsible for capturing and redistributing infringing television content on a massive scale through the SSTV Services.” (ibid). Justice Lafrenière concluded that Marshall Macciacchera and the Corporate Defendants had, on a prima facie basis, failed to comply with the Interim Order, notably deliberately failing to make the required financial disclosures, refusing to answer numerous questions regarding their assets, various login credentials, and certain unauthorized streaming services (Charging Order at paras 55-59).
[12] Consequently, Justice Lafrenière charged Marshall Macciacchera and the Corporate Defendants with contempt [Charged Defendants]. The Charging Order required them to appear before a judge of this Court for a contempt hearing in order to (i) hear proof of the acts purportedly committed by them with which they are charged; and (ii) to be prepared to present any defence they may have.
[13] The contempt hearing proceeded before me over four days in April 2023, during which five witnesses gave evidence. Further submissions were filed on June 2, 2023, June 19, 2023, July 4, 2023, January 23, 2024, and January 29, 2024. This is the resulting judgment. To be clear, Antonio Macciacchera and Roma Works SA [Antonio Defendants] were the subject of separate contempt proceedings before Chief Justice Paul S. Crampton (Bell Media Inc v Macciacchera (Smoothstreams.tv), 2023 FC 801 [Contempt Judgment Antonio Defendants]) and are thus not the subject of the present Order and Reasons.
[14] It is the Plaintiffs’ position that the Interim Order was clear and that ISS Drapeau spent considerable time explaining it to Marshall Macciacchera, such that there was no confusion or lack of understanding as to what was required under its terms. The Plaintiffs submit that the Charged Defendants, despite having actual knowledge of the Interim Order, have intentionally failed to perform multiple obligations contained therein. The Plaintiffs allege that the Charged Defendants have lied, concealed and attempted to conceal evidence - and remain in breach of their obligations to this day.
[15] The Charged Defendants allege that the ISS Drapeau was not independent and thus this begs the question as to how the Charged Defendants can have confidence that they are being treated fairly by the Court. They submit that the manner in which ISS Drapeau executed the search robbed Marshall Macciacchera of his dignity and was “out of bounds”. The Charged Defendants further submit that reasonable doubt exists as the Plaintiffs have failed to lead expert evidence on what ought to have been produced under the Interim Order. They plead that the three Corporate Defendants are not interchangeable pieces and one must have sufficient evidence of contempt for each Corporate Defendant, which they submit is lacking. Finally, the Charged Defendants allege that the combination of their levels of compliance with the Interim Order, and the egregious nature of the search, means that the Court ought to exercise its residual discretion and show mercy.
[16] For the reasons that follow, based on the evidence before me, I am satisfied beyond a reasonable doubt that the Charged Defendants knowingly breached the terms of the Interim Order and are guilty of contempt of Court. The defences raised by the Charged Defendants do not, in my view, excuse their breaches of the Interim Order.
[17] Finally, the issuance of the present Order and Reasons was delayed as a result of an injury following an accident. While the parties were kept updated by way of directions, I nevertheless thank the parties for their patience. Waiting for a judgment on the issue of contempt is almost certainly an unsettling experience and I have been very mindful of that.
II. The Order at Issue and its Subsequent Treatment [18] As noted above, the Interim Order contained an interim injunction which enjoined the Defendants from, among other things (i) engaging in certain activities related to the operation of SSTV Services or other unauthorized streaming services, and (ii) dissipating, transferring or otherwise concealing assets. It further orders them to disclose certain banking and financial information to the ISS and authorize financial institutions to share records with the ISS for the purpose of the present case.
[19] In addition, the Interim Order orders the Defendants to provide access to, and transfer control over, the infrastructure of SSTV Services to the ISS, as a custodian, and for that infrastructure to be shut down. The Interim Order also authorizes the ISS, assisted by computer forensic experts and investigators, to search the premises described in the Interim Order, and to seize and preserve evidence and equipment related to the SSTV Services and the Defendants’ assets.
[20] The Interim Order requires that the ISS and the Plaintiffs’ solicitors serve on the persons on whom the order is executed, copies of (i) the Interim Order, (ii) the materials in support thereof, (iii) the Statement of Claim, and (iv) the Notice of Motion for a review of the execution of the order that is returnable within 14 days from the service of the Interim Order. The Interim Order further requires that the ISS and the Plaintiffs’ solicitors explain the order to the person served in plain language, in English or French, at the person’s preference, including the right to seek legal advice and to segregate documents over which legal privilege is claimed.
[21] The Interim Order, in the section entitled “Notice to the Defendants”, notifies the Defendants that the execution of the Interim Order will be reviewed within 14 days, and that they may ask the Court to vary or set it aside, either at that time or earlier upon request.
[22] Following the execution of the Interim Order by ISS Drapeau and his team at the Premises, the hearing of the motion to review the Interim Order was held before Justice Lafrenière (Bell Media Inc v Macciacchera (Smoothstreams.tv), 2022 FC 1602 [Interlocutory Order]).
[23] During the hearing of the motion to review the Interim Order, the Defendants did not contest the validity of the Interim Order vis-à-vis any of the Defendants, nor did they contest the Interim Order itself or its conversion into an interlocutory order. There was also no request to vary or set the Interim Order aside. Rather, the Defendants challenged the Plaintiffs’ assertion that the Interim Order was lawfully conducted. In Justice Lafrenière’s words, “[t]he Defendants do not take issue with the terms of the Interim Order. The focus of their arguments in opposing the motion is rather on the manner in which the Interim Order was executed, which they say was unlawful.” (Interlocutory Order at para 60). In a subsequent order, the Federal Court of Appeal has noted that there “is no challenge to the validity of the Anton Piller Order itself” (Macciacchera (Smoothstreams.tv) v Bell Media Inc, 2023 FCA 180 at para 2 [Bell Media]).
[24] In support of their motion to review the Interim Order, the Plaintiffs relied on the evidence that was before me in support of the Interim Order, along with the affidavit of ISS Drapeau, dated July 22, 2022, as corrected, two affidavits of a second ISS, Mark Davis dated July 14, 2022, and the affidavits of two investigators pertaining to their role in the execution of the Interim Order at the Premises.
[25] As described by Justice Lafrenière, “the Defendants did not file any affidavit evidence in response to the Plaintiffs’ motion. They chose instead to cross-examine ISS Drapeau on his affidavit, leaving the remaining affidavits unchallenged. In opposing the Plaintiffs’ motion, the Defendants rely mainly on the transcript of the cross-examination of ISS Drapeau and video footage taken by videographers who attended the execution on the [Premises] […]” (Interlocutory Order at para 13).
[26] The issues before Justice Lafreniere were: 1) Whether the Court should issue a declaration that the execution of the Interim Order was lawfully conducted; 2) If so, whether the Court should authorize the return of the Plaintiffs’ security for damages; and 3) Whether a portion of the interim relief provided by the Interim Order should be converted to interlocutory relief (Interlocutory Order at para 15).
[27] Following an extensive review of the evidence, Justice Lafrenière found that the executions of the Interim Order at the various premises were lawful and that the Defendants’ arguments in this regard were unfounded and without merit (Interlocutory Order at para 105). He concluded that the two ISS, Me Drapeau and Me Davis, conducted themselves professionally and in a manner that protected the rights of the Defendants (ibid).
[28] As to whether an interlocutory injunction should be granted pending the determination of the proceedings on its merits, Justice Lafrenière concluded as follows:
[110] Based on the evidence before me, which is not challenged by the Defendants, I find that the execution of the Interim Order directly corroborates and bolsters the evidence presented at the ex parte motion before Justice Rochester. A strong case has been established by the Plaintiffs that the Defendants have infringed the Plaintiffs’ copyrights. I further find that in the absence of an interlocutory injunction enjoining the Defendants from being involved in unauthorized subscription services, the Plaintiffs will suffer irreparable harm that cannot be adequately compensated in damages. Finally, I conclude that the balance of convenience favours granting the interlocutory injunction on the terms requested by the Plaintiffs.
[29] Consequently, many of the terms of the Interim Order were continued, notably that the Defendants were enjoined from directly or indirectly developing, operating, maintaining, hosting, promoting, providing support for, or selling subscriptions to unauthorized subscription services, including under the SSTV Services brands, and were ordered to disclose certain information concerning the unauthorized subscription services and their financial assets to ISS Drapeau.
III. The Charging Order [30] As noted above, on July 28, 2022, Justice Lafrenière issued the Charging Order. Justice Lafrenière commented that “content piracy is not a victimless crime” and that “[t]he deleterious impact of such acts of copyright infringement cannot be understated.” (Charging Order at para 34).
[31] Justice Lafrenière noted that in order to charge the Defendants Marshall Macciacchera, Arm Hosting Inc., Star Hosting Limited, and Roma Works Limited, with contempt, the Plaintiffs must present evidence that there is a court order, that the alleged contemnor has knowledge of the order and that they deliberately disobeyed the order (Charging Order at para 53).
[32] Justice Lafrenière found that the Interim Order was personally served on Marshall Macciacchera in his personal capacity and in his capacity as the sole director of Arm Hosting Inc., Star Hosting Limited, and Roma Works Limited, and that each of the three corporations were responsible for operating the subscription management/payment portals for one of the SSTV Services (Charging Order at para 54).
[33] Justice Lafrenière concluded that a prima facie case of contempt had been made out by the Plaintiffs, highlighting Marshall Macciacchera’s refusal to answer questions about a number of topics and his refusal to provide the password for his computer. Accordingly, the Charged Defendants were charged with contempt of Court under Rule 466(b) of the Rules. The Charging Order sets out the specific charges as follows:
8. The acts with which the Defendants Marshall Macciacchera, Arm Hosting Inc., Star Hosting Limited, and Roma Works Limited are charged with contempt of Court under Rule 466(b) of the Federal Courts Rules is that they, by their conduct or inaction breached paragraph 20 of the Interim Order by refusing to provide to the independent supervising solicitor and/or to the Plaintiffs’ solicitors the technical information related to the SSTV Services and/or any other unauthorized subscription services under their control.
9. The acts with which the Defendants Marshall Macciacchera, Star Hosting Limited, and Roma Works Limited are charged with contempt of Court under Rule 466(b) of the Federal Courts Rules is that they, by their conduct or inaction:
(a) breached paragraph 24(a) of the Interim Order by refusing to disclose the assets, revenues, expenses and profits referred to in said paragraph.
(b) breached paragraph 24(b) of the Interim Order by refusing to provide all information pertaining to these assets, including by refusing to provide the documents likely to contain that information.
(c) breached paragraph 24(c) of the Interim Order by refusing to provide the identity and contact information of the banks, financial institutions or other service providers with which these assets are registered or through which they are controlled.
(d) breached paragraph 25 of the Interim Order by refusing to provide their written consent to authorise banks, financial institutions or other service providers to disclose information pertaining to their assets to the independent supervising solicitor and to the Plaintiffs’ solicitors.
10. The acts with which the Defendant Marshall Macciacchera is charged with contempt of Court under Rule 466(b) of the Federal Courts Rules is that he, by his conduct or inaction breached paragraph 30 of the Interim Order by refusing to disclose the login credentials for his home computer necessary to enforce the Interim Order in accessing the evidence to be preserved thereunder.
[34] In summary, each of the Charged Defendants are charged with deliberately disobeying paragraph 20 of the Interim Order. In addition, Marshall Macciacchera, Star Hosting Limited, and Roma Works Limited are charged with deliberately disobeying paragraphs 24 and 25 of the Interim Order. Finally, Marshall Macciacchera is charged with deliberately disobeying paragraph 30 of the Interim Order.
IV. The Witnesses Called by the Parties [35] An overview of the parties’ positions is set out in paragraphs 11 and 12 of the present Order and Reasons, above.
[36] As noted previously, five witnesses testified during the hearing. I found each of the witnesses to be credible and forthright. The testimonial evidence will be referred to in greater detail in Section VI (Analysis) of the present Order and Reasons, however, a brief overview is warranted.
[37] Three of the witnesses were called by the Plaintiffs to testify. First, Daniel Stephan Drapeau, an intellectual property lawyer who acted as the ISS during the execution of the Interim Order at the Premises. ISS Drapeau testified extensively on various matters relating to the execution of the Interim Order. His testimony addressed, among other things, the discussions that took place with Marshall Macciacchera, and the documents, information, and equipment that was seized and/or obtained. As noted previously, a videographer and member of ISS Drapeau’s team captured the execution of the Interim Order on video, which ISS Drapeau authenticated.
[38] Second, Branko Vranesh, a digital forensics consultant who was present during the execution of the Interim Order at the Premises. Mr. Vranesh testified as to what he observed at the Premises, the equipment he witnessed, and the disconnection and seizure of certain equipment. He further testified as to which login credentials have been provided to him and which ones have not.
[39] Third, Anthony Martin, an investigator with the integrity team of Bell Canada. Mr. Martin testified as to his observations when monitoring certain SSTV Services remotely before, during and after the execution of the Interim Order. He also provided testimony on the investigation by the Plaintiffs into Marshall Macciacchera, which ultimately led to the motion for the Interim Order.
[40] The fourth and fifth witnesses were called by the Charged Defendants to testify. First, Mark Davis, who is an intellectual property lawyer who acted as the ISS for the execution of the Interim Order at the residence of Antonio Macciacchera. He testified as to his understanding of the scope of the Interim Order with respect to personal information. He was questioned on an alleged oral direction from Justice Lafrenière and testified as to his communications with Plaintiffs’ counsel by text message.
[41] Second, Ryan Evans, a lawyer at Smart & Biggar and counsel for the Plaintiffs, who was present during the execution of the Interim Order at the Residence. He was questioned on an alleged oral direction from Justice Lafrenière and testified that he had not communicated with ISS Drapeau by text message.
V. Issues [42] The sole issue in this contempt proceeding is whether one or more of the Charged Defendants are guilty of civil contempt for failing to comply with the terms of the Interim Order, specifically paragraphs 20, 24, 25 and 30.
[43] At the outset of the hearing of this matter, a number of objections were raised by the Charged Defendants concerning the admissibility of certain evidence. Over the course of the hearing, I provided my decisions and reasons orally from the bench. Given the nature of certain objections, however, it is worthwhile to also set out the reasoning for those rulings in the present Order and Reasons. As such, several sections of the analysis below address evidentiary matters, namely subsections C (The Protections Against Self Incrimination), D (Contempt is Not a Distinct Proceeding), and E (Collateral Attack on the Interim Order).
VI. Analysis A. The Law of Contempt [44] The law of contempt in this Court is governed by the Rules and the common law (King v Federation of Newfoundland Indians Inc, 2021 FC 1312 at para 34).
[45] As stated recently by Chief Justice Crampton, “[t]hose who decide when and under what circumstances they will comply with a court order essentially take the law into their own hands. That cannot be countenanced in a society governed by the rule of law.” (Contempt Judgment Antonio Defendants at para 1). Contempt of Court rests on the ability of the courts to enforce their process and uphold their dignity and respect (Carey v Laiken, 2015 SCC 17 at para 30 [Carey]). The contempt powers granted to the courts foster compliance with court orders by sanctioning those who flout them (Carey at para 30; Bell Canada v Adwokat, 2023 FCA 106 at para 18 [Adwokat FCA]). As stated by Justice Tremblay-Lamer “[t]he deliberate disobedience of a court order represents a defiance of judicial authority which depreciates and makes a mockery of our system of justice.” (Canada (Human Rights Commission) v Heritage Front (TD), [1994] 3 FC 710 at 718 [Heritage Front]).
[46] Rules 466 through 472 of the Rules govern contempt of Court. A person who disobeys a process or order of the Court or who impairs the authority or dignity of the Court is guilty of contempt of Court (Rule 466(b) and (c)).
[47] The parties and the Court agree that in Carey, the Supreme Court set out the three cumulative elements necessary for a finding of civil contempt (at paras 33-35). First, the order alleged to have been breached must clearly and unequivocally state what should and should not have been done (ibid at para 33). Second, the party alleged to have breached the order must have had actual knowledge of it or have been willfully blind to it (ibid at para 34). Third, the party allegedly in breach must have intentionally done the act that the order prohibits or intentionally failed to do the act that the order compels (ibid at para 35).
[48] With respect to the third element, it is not necessary to prove that the party allegedly in breach intended to (i) interfere with the administration of justice; or (ii) impair the authority or dignity of the Court; or (iii) disobey the order. Rather, it is sufficient to find that the person committed an act that is in fact a breach of a clear order of which they had knowledge (Contempt Judgment Antonio Defendants at para 28; Apotex Inc v Merck & Co Inc, 2003 FCA 234 at para 60 [Apotex]; Carey at para 38). In other words, in civil contempt cases, the person must have intended to commit the prohibited act – the act must not have occurred accidentally (Apotex at para 60).
[49] A finding of contempt shall be based on proof beyond a reasonable doubt (Rule 469; Carey at para 32). Justice John Norris in Bell Canada v Red Rhino Entertainment Inc, 2019 FC 1460 [Red Rhino] explains in detail the concept of reasonable doubt in the context of contempt proceedings:
[50] [15] Unusually for a civil proceeding, the plaintiffs must establish the elements of contempt beyond a reasonable doubt before Red Rhino or Mr. Adwokat can be found guilty (see rule 469). As is well-known from criminal proceedings, this is a demanding standard of proof. To meet their burden, the plaintiffs are not required to establish the elements of contempt to an absolute certainty or beyond any doubt. But they must establish them beyond a reasonable doubt. A reasonable doubt is not an imaginary or frivolous doubt or a mere hypothetical possibility. It is not based on sympathy for or prejudice against anyone involved in the proceedings. Rather, it is a doubt that is based on reason and common sense. It is a doubt that is logically connected to the evidence or absence of evidence. Proof beyond a reasonable doubt is stronger than proof on a balance of probabilities. Indeed, if placed on a scale of standards of proof, proof beyond a reasonable doubt sits much closer to absolute certainty than to probable guilt. Thus, it is not sufficient for me to conclude merely that Red Rhino and Mr. Adwokat are probably guilty or likely guilty. If that is all the evidence establishes, they must be found not guilty. I may find Red Rhino and Mr. Adwokat guilty of contempt of Court only if no reasonable doubt remains and I am therefore sure they are guilty.The party charged with contempt is presumed to be innocent, and the burden of proving contempt rests with the accuser and never shifts to the accused (Canadian Standards Association v PS Knight Co Ltd, 2021 FC 770 at para 23 [PS Knight Co]; Sweda Farms Ltd v Ontario Egg Producers, 2011 ONSC 3650 at paras 24-25). Furthermore, the party charged with contempt cannot be compelled to testify (Rule 470(2)).
[51] The Court’s contempt powers are both exceptional and discretionary. The Court retains a residual discretion not to enter a finding of guilt even if all the requisite elements have been proven. In Carey, the Supreme Court declined to delineate the full scope of this discretion, but noted the possible examples of where an alleged contemnor acted in good faith in taking reasonable steps to comply with an order and where imposing a contempt finding would work an injustice in the circumstances of the case (at para 37).
B. Anton Piller Orders [52] As noted above, the Interim Order provided injunctive relief, an Anton Piller Order, and other ancillary relief. It authorized ISS Drapeau and his team to inspect the Premises and make copies of documents pertaining to the unauthorized subscription services, the Corporate Defendants, and certain financial records. It equally authorized ISS Drapeau to remove certain materials and make mirror images of digital devices. It further authorized ISS Drapeau to ask various questions about the Defendants, the unauthorized subscription services and financial assets. The Interim Order also enjoined the Defendants from concealing or destroying any evidence and ordered them to disclose certain information. Given the contents of the Interim Order, the facts of this particular case, and the nature of the contempt charges, it is worthwhile to briefly consider the nature of an Anton Piller Order.
[53] Anton Piller Orders find their origin in the English Court of Appeal case of Anton Piller KG v Manufacturing Processes Ltd, [1975] EWCA Civ 12, where Lord Denning, citing the Court’s inherent jurisdiction, permitted the plaintiff’s solicitor to enter the defendants’ premises, with their permission, albeit under the threat of contempt, in order to examine and copy evidence in the defendants’ possession so as to avoid its destruction. The defendants in the case were alleged to have been disclosing the plaintiff’s trade secrets to competitors and there was a real concern that they would destroy evidence. Lord Denning highlighted that should a defendant refuse entry to his premises, “he refuses at his peril. It puts him in peril not only of proceedings for contempt, but also of adverse inferences being drawn against him; so much so that his own Solicitor may often advise him to comply.” (at 61).
[54] In order to obtain an Anton Piller Order pursuant to Rule 377 of the Rules, a moving party must establish: (1) that there is a strong prima facie case; (2) that the damage to the plaintiff caused by the defendant’s alleged misconduct, potential or actual, is very serious; (3) that there is clear and convincing evidence that the defendant has in its possession incriminating documents or things; and (4) that there is a real possibility that the defendant may destroy such material before the discovery process can do its work (Bell Canada v Lackman, 2018 FCA 42 at para 10; Celanese Canada Inc v Murray Demolition Corp, 2006 SCC 36 at para 35 [Celanese]).
[55] In cases involving unauthorized subscription services, including the present case, the destruction of relevant evidence and the transfer of control over the websites and servers is a very real possibility (see Warner Bros Entertainment Inc v White (Beast IPTV), 2021 FC 53). When the Interim Order was issued, I was satisfied that the four criteria set out in Celanese had been met. In particular, I was satisfied that but for the issuance of the Anton Piller Order, there was a real possibility that the Defendants may destroy or conceal incriminating documents. The record before me evidenced the Defendants Marshall and Antonio Macciacchera’s previous involvement with unauthorized subscription services and how, once the Plaintiffs’ had launched a separate action and obtained a permanent injunction, the Defendants Marshall and Antonio Macciacchera indicated to subscribers that they were eligible to transfer their memberships to SSTV Services. As described by Justice Lafrenière, “the Plaintiffs appear to be drawn into an endless game of whack-a-mole to try to prevent the online theft of their copyrighted content by disparate actors who seek to take advantage of any vacuum created in the illicit market by the Plaintiffs’ efforts.” (Charging Order at para 35).
[56] One must bear in mind that the Interim Order was issued, among other things, for the purpose of seizing and preserving evidence, and avoiding the transfer of assets and control over the SSTV Services outside this Court’s jurisdiction. With respect to information stored on digital media, it can be concealed, erased, and/or access can be denied. It was made very clear to the Charged Defendants at the time the Interim Order was served that the penalty for non-compliance is contempt of Court. In the words of Lord Denning, a refusal to comply on the part of the Charged Defendants is “at [their] peril”.
C. The Protections Against Self-Incrimination [57] As noted above in the issues section of the present Order and Reasons, a number of objections were raised by the Charged Defendants at the outset of the hearing. Among them was an objection based on the principle against self-incrimination protected by the Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11 [Charter]. The Charged Defendants objected to the use of evidence collected during the execution of the Interim Order, including the video recordings, any observations made by people present at the time, seized equipment, and documents copied or collected while at the Premises. The Charged Defendants also objected to the use of any documents produced in the underlying action, including the affidavits of documents. The Charged Defendants pled that the protections against self-incrimination include the use of incriminating evidence given under compulsion. During their submissions, they highlighted video taken during the execution of the Interim Order and sought to underscore its “highly prejudicial” nature and the “serious, irreparable damage” that it could cause if admitted into evidence. It was submitted that certain things, put simply, “look really bad”.
[58] At the time, I suggested to counsel for the Charged Defendants that if the Charged Defendants were correct in their view that all evidence that may incriminate them must be excluded from the contempt proceedings, then the only situations where one could be found in contempt would be where the alleged contemnor admits contempt or where the act was committed in the presence of a judge as per Rule 468 of the Rules. I sought to explore with counsel for the Charged Defendants whether self-incrimination was something beyond, to use their words, something that is “bad for my client”. Counsel clarified that it was any evidence that the Charged Defendants were compelled to provide that may tend to support their finding of guilt, and thus would cause prejudice to them.
[59] The Plaintiffs submitted that Rule 470 of the Rules ensures that the Charged Defendants cannot be compelled to testify, which they have not been - thereby respecting both Rule 470 of the Rules and section 11 of the Charter. Moreover, a witness who testifies in any proceedings has the right to not have any incriminating evidence used to incriminate that witness in another proceeding pursuant to section 13 of the Charter. The Plaintiffs pled that the law is clear that in any event, the responses to questions during the execution of the Interim Order are not “testimony”, Anton Piller defendants are not “witnesses”, and Anton Piller defendants lie outside the protections of sections 11 and 13 of the Charter.
[60] The Plaintiffs further underscored the history and purpose of Anton Piller orders to deal with those who infringe people’s rights, seek to evade the jurisdiction of the courts, and hide and destroy evidence. The Charged Defendant’s position cannot stand because it would mean that evidence of falsehoods, destruction of documents, and refusals to comply could not be used to establish contempt. In such a world, there is no way, in the Plaintiffs’ view, that Anton Piller orders would ever be respected.
[61] After considering the parties’ submissions, I ruled from the bench that the objection was overruled. I concluded that the protections against self-incrimination in the context of a motion for contempt are contained in Rule 470(2) of the Rules, which provides that a person alleged to be in contempt may not be compelled to testify. I found the protection against self-incrimination was far narrower than the Charged Defendants’ stated position and rather was in line with the Plaintiffs’ representations.
[62] It cannot be, in the context of a motion for contempt in the Federal Court, that any evidence obtained during the execution of an Anton Piller order or during the underlying proceedings generally is excluded on the basis that it may be prejudicial to the alleged cont