Warner Bros. Entertainment Inc. v. White (Beast IPTV)

Warner Bros. Entertainment Inc. v. White (Beast IPTV)
Court (s) Database
Federal Court Decisions
Date
2021-01-14
Neutral citation
2021 FC 53
File numbers
T-1176-20
Decision Content
Date: 20210114
Docket: T-1176-20
Citation: 2021 FC 53
Ottawa, Ontario, January 14, 2021
PRESENT: The Honourable Mr. Justice Roy
BETWEEN:
WARNER BROS. ENTERTAINMENT INC.
AMAZON CONTENT SERVICES LLC
BELL MEDIA INC.
COLUMBIA PICTURES INDUSTRIES, INC.
DISNEY ENTERPRISES, INC.
NETFLIX STUDIOS, LLC
NETFLIX WORLDWIDE ENTERTAINMENT, LLC
PARAMOUNT PICTURES CORPORATION
SONY PICTURES TELEVISION INC.
UNIVERSAL CITY STUDIOS PRODUCTIONS, LLLP
Plaintiffs
and
TYLER WHITE dba BEAST IPTV
COLIN WRIGHT dba BEAST IPTV
Defendants
JUDGMENT AND REASONS
[1] The Plaintiffs executed on November 24, 2020, an interim injunction issued pursuant to rule 374 of the Federal Courts Rules, SOR/98-106, as amended [FCR]. The interim injunction was granted following an ex parte motion because giving notice to the Defendants would defeat the purpose of the motion. It was extended, on consent of all parties, to allow for the Defendants to hire counsel to represent their interests. The terms of the interim injunction continued to apply until judgment is to be rendered on the motion brought by the Plaintiffs, dated December 1, 2020. This is the said judgment.
[2] The two Defendants brought their own motions on December 14 (cross-motions), asking that the interim injunction be set aside, in whole or in part.
I. The Plaintiffs’ motion
A. The interim injunctions
[3] The interim orders, one for each Defendant, provided that their execution was to be reviewed by the Court. The said orders, which were executed simultaneously on November 24, require, among other things, the transfer of control of the infrastructure of the Beast IPTV Service to the independent supervising solicitors.
[4] In order to achieve that purpose of transferring the control of the infrastructure of the Beast IPTV Service, the Defendants were ordered to:
provide the independent supervising solicitors the identity of the registrar accounts with which certain domains and subdomains are registered; the Defendants were also to provide the independent solicitors with the login credentials for each account;
provide the independent supervising solicitors the identity and location of the servers and hosting provider accounts for the servers associated with the Beast IPTV Service and with certain domains and subdomains; the Defendants were to provide the login credentials (or other credentials) necessary to access the highest available privilege level to the servers and accounts;
disclose any other domain (and subdomain), registrar account, hosting provider account, and server associated with the development, hosting, operation and promotion of the Beast IPTV Service and sale of subscriptions to the Beast IPTV Service; the independent supervising solicitors are to be provided with the login credentials (or any other credentials) necessary to access the highest available privilege level for these.
[5] For that same purpose, computer forensic experts were authorized:
to log into the accounts and servers using the credentials thus obtained;
to modify the login credentials for the accounts and servers;
to deactivate any domain, subdomain, server or service associated with the accounts or servers;
to transfer control over the accounts, domains, subdomains and servers to the independent supervising solicitors as custodians; the independent supervising solicitors, assisted by the computer forensic experts, are to act as custodian of the modified login credentials.
[6] The interim orders were enjoining and restraining the Defendants, by themselves or through various other persons or entities, from:
developing, operating and maintaining, promoting, providing support, selling subscriptions, or authorizing any one to sell subscriptions to unauthorized IPTV Services, including the Beast IPTV Service, that provide users with unauthorized access to cinematographic works for which the copyright is owned by the Plaintiffs;
developing, maintaining, updating, hosting, distributing, promoting or selling any software application that provides access to unauthorized IPTV services, including the Beast IPTV Service, the Beast IPTV Android Application and the Beast IPTV Perfect Player;
operating, maintaining, updating, hosting, promoting or selling access to domains (and subdomains) through which IPTV (which includes the Beast IPTV Service) is made available, or indirectly made available, advertised, offered for sale or sold;
from communicating the Plaintiffs’ works to the public by telecommunication, including by transmitting or making available, without authorization, the television channels owned and operated by one of the Plaintiffs, Bell Media Inc. on which are broadcast the Bell Programs (“Bell channels”);
making available to the public the Plaintiffs’ works and the Bell Channels, by telecommunication so that members of the public have access from a place and at a time individually chosen by them.
[7] The Defendants were ordered to disclose to the independent supervising solicitors and to the Plaintiffs’ solicitors various financial information concerning the Beast IPTV Service, as well as assets and revenues, in Canada or abroad.
[8] The Defendants were enjoined and restrained from disposing of their assets.
[9] The Plaintiffs’ solicitors and the independent supervising solicitors were ordered to inform the Defendants (or the persons on whom the order was executed) about rights they have, including their right to seek advice from counsel. The Notice to the Defendants appended to the interim order runs for 14 paragraphs. Moreover, the Statement of Claim was served on the Defendants as part of the execution of the interim orders.
[10] The interim orders also provided for the execution of the orders by authorising the presence of representatives of the Plaintiffs, law enforcement officers only to the extent necessary and the independent supervising solicitors to record all or parts of the execution of the orders. The Plaintiffs were ordered to treat as confidential the information and material obtained in accordance with the execution of the interim orders; the information and material can be filed with the Court under seal; it was to be marked as confidential. The independent supervising solicitor and the Plaintiffs’ counsel were authorized to consult the material and information obtained, but only for the purpose of preparing the independent supervising solicitors’ report and also for the purpose of continuing the orders as interlocutory injunctions, the review motions and, more generally, for the purpose of this proceeding.
[11] Other specific elements of the interim orders deserve to be mentioned in view of allegations of the violation of the orders:
a person on whom the order was served, or who has notice of the order, had to refrain during the execution of the order from using a computer, telephone, or other communication device, except in the presence of the independent supervising solicitor; furthermore, that person was ordered to refrain, for a period of 48 hours after service of the order, from disclosing to, or discussing with, any other person, the existence of the order or the proceeding (except of course for the purpose of obtaining legal advice). Moreover, the orders extended to the prohibition to inform or warn anyone that the Plaintiffs might execute the order against her or him.
[12] Given the nature of the proceedings, the Court record was to be held in sealed envelopes in the Court registry until 48 hours following the service of the various documents (Statement of Claim, Motion seeking interim injunction, the order, etc.).
B. What is now sought
[13] The present motion before the Court addresses the review ordered by the Court of the execution of the interim orders. The reports were filed by the two independent supervising solicitors, Mr. David Hutt from Nova Scotia, and Mr. David Lipkus from Ontario. It is said that the execution of the two orders was done lawfully and properly, although both Defendants are alleged to have largely refused to comply with the terms of the orders. Hence, the Plaintiffs seek an order pursuant to rule 467 of the FCR, the purpose of which is to charge the Defendants, Mr. Tyler White and Mr. Colin Wright, with contempt of the interim order, together with a declaration that the execution of the interim order was proper and lawful.
[14] The Plaintiffs ask for an order converting the interim injunction into an interlocutory injunction, in accordance with rule 373 of the FCR.
[15] They also ask that the affidavits of Andew McGuigan and Yves Rémillard submitted for the purpose of the current motion, both dated November 30, 2020, be kept under confidentiality seal in accordance with rule 151 of the FCR.
[16] Finally, the Plaintiffs seek an order directing David Lipkus, the independent supervising solicitor involved in the execution of the interim order on the Defendant, Colin Wright, to disclose to the Plaintiffs’ counsel the financial disclosure provided by Mr. Wright to Mr. Lipkus on November 24, 2020.
II. Mr. Colin Wright’s cross-motion
[17] In his Notice of Motion of December 14, 2020, Mr. Wright asks the Court to set aside, in whole or in part, the interim injunction that applies to him, as well as dismissing the interlocutory injunction motion.
[18] Mr. Wright claims that the show cause motion concerning the alleged contempt of court should also be dismissed.
[19] A number of paragraphs from the affidavits of Andrew McGuigan and Yves Rémillard should be stricken from the record according to Mr. Wright. They are:
(a) affidavits of September 29, 2020, relating to the granting of the interim order:
(i) Andrew McGuigan: paras 73, 147, 159, 160, 165, 167, 230 to 234, 261 to 267 (and related exhibits);
(ii) Yves Rémillard: paras 14 to 16, and 18 to 21;
(b) affidavits of November 30, 2020, relating to the Plaintiffs’ motion about the review of the execution of the interim order, an order converting the interim order into an interlocutory order and an order charging the Defendants with contempt of court:
(i) Andrew McGuigan: paras 6, 7, 12 to 21, 29, 30 to 39 (and related exhibits);
(ii) Yves Rémillard: paras 5 to 7.
[20] Mr. Wright also argues that an adverse inference ought to be drawn in view of the failure of the Plaintiffs to offer evidence of persons having personal knowledge of “material facts”.
[21] The argument advanced by Mr. Wright is that the interim injunction did not meet the requirement of an Anton Piller order and a Mareva injunction. Furthermore, the use of evidence coming from a confidential informant should be stricken as inadmissible or, at least, be given no weight.
[22] There was no evidence to support the inference that Mr. Colin Wright would dispose of his assets or destroy materials before the discovery process, or that he would render himself judgement-proof. At any rate, the confidential evidence constitutes hearsay evidence which is inadmissible because it is neither necessary nor reliable.
III. Mr. Tyler White’s cross-motion
[23] Defendant Tyler White also characterized the interim injunction as an Anton Piller order. As such, it failed the test for its issuance in that sufficient admissible evidence was not proffered that the issue is very serious and that there is irreparable harm. Furthermore, there lacked evidence that Mr. White was in possession of incriminating evidence or that he would destroy incriminating material before discovery. The Defendant claimed that the interim order was overbroad and “would not even be available after trial”.
[24] It is also claimed that the secrecy of even the existence of this proceeding, resulting in the non-availability of a publicly available docket, ought to be corrected. This resulted from a Direction issued by a member of the Court on October 2, 2020, at the outset of the present proceedings. It should be noted that the Direction specifically provides that the confidentiality lasts only until “la Cour ait entendu ladite requête, ou jusqu’à ordonnance contraire de la Cour” [translation] “The Court has heard the motion, or unless the Court orders otherwise”. Indeed, the hearing which took place on December 18, 2020 was open to the public, except for some segments which were held in camera at the parties’ request.
[25] The Defendant also seeks for certain parts of the affidavits of Andrew McGuigan to be stricken on the basis that they contain inadmissible hearsay evidence and fail to identify an alleged “confidential source”.
[26] It is argued that the Plaintiffs failed to disclose to the Court the existence of a recent decision from the Federal Court of Appeal which, argues the Defendant, undermines the main basis for the alleged infringement set out in the Statement of Claim. The argument is in respect to subsection 2.4(1.1) of the Copyright Act, RSC, 1985, c C-42. It is said that the Federal Court of Appeal decision in Entertainment Software Association v Society of Composers, Authors and Music Publishers of Canada, 2020 FCA 100 [ESA] makes the Plaintiffs’ prima facie case less than strong, thus not meeting the test for the issuance of an Anton Piller order. According to this Defendant, the true state of the law was not disclosed, as it should have been on an ex parte motion. It is alleged that the Court of Appeal “clearly ruled that so-called “making available” right in subsection 2.4(1.1) of the Copyright Act does not constitute a cause of action as such” (Notice of cross-motion on behalf of Defendant Tyler White, p. 3).
IV. The Plaintiffs’ case
[27] The Plaintiffs ask that the execution of the interim injunction be declared to be lawful and proper. They seek to convert the interim injunction into an interlocutory injunction to remain valid until the final determination of the proceeding on the merits. In view of the alleged failure of the Defendants to abide by the terms of the interim order, the Plaintiffs seek an order pursuant to rule 467 to appear before a judge to hear the evidence and present any defence to a charge of contempt.
A. The execution of the interim orders
[28] The interim orders concerning the Defendants were served and executed simultaneously on November 24, 2020. The reports of independent supervising solicitors David Hutt (concerning Tyler White) and David Lipkus (concerning Colin Wright) have not been challenged by the Defendants.
[29] In essence, Mr. Hutt’s report, dated November 30, 2020, states:
Mr. White indicated he would not cooperate, after having consulted counsel; he was advised that this may result in adverse inferences or a finding of contempt of court, yet he maintained his refusal;
“upon arrival at Mr. White’s house, he was advised that the court documents being served on him related to Beast IPTV, to which Mr. White immediately replied “never heard of it” ” (D. Hutt’s affidavit, para 20);
later on, Mr. White continued to assert having no knowledge of Beast IPTV and not knowing Colin Wright. For instance, paragraph 28 of D. Hutt’s affidavit reports:
28. As he led us into the house Mr. White asked me, “so what are these people suing me for anyway?” I began to reply, referencing control of Beast IPTV, but Mr. White interrupted me, saying, “I don’t control shit. I don’t even have a computer in my house.”
He repeated having not heard of Beast IPTV and not even having a computer, which was corrected by his partner, Ms. Gallant-Osmond:
38. At 10:01am Mr. White interrupted my explanation of the Order’s terms to ask, “you need a computer to do that, don’t you? I don’t even have a computer.” Ms. Gallant-Osmond then reminded Mr. White, in the presence of Ms. Kean, Mr. Ford, Mr. White and me, that he owned a laptop, and he clarified: “I got one laptop that I just bought.”
In the end, Mr. White refused to cooperate, having been advised more than once of the possible consequences and having confirmed that he understood the warnings given to him.
[30] As for the report of Mr. Lipkus, he states in his affidavit that Colin Wright understood the explanations that were given to him concerning the terms of the order to be executed. He denied any involvement with Beast IPTV, having stopped after receiving a letter two years ago. Mr. Wright indicated he could not comply with the order “because he is no longer involved in any way with Beast IPTV” (D. Lipkus’ affidavit, para 16).
[31] I prefer to quote verbatim paragraphs 18 and 19 of Mr. Lipkus’ affidavit which report on the denegations by Mr. Wright:
18. Following the telephone conversation [with counsel], Colin Wright told me that he was previously involved in selling IPTV services, including Vader, Nitro, Beast and others, but he stopped after he received a cease and desist letter from the Alliance of Creativity sometime in 2018/2019. He told me that he spoke with Sundeep Chauhan, the author of the letter, and believed that the matter was resolved because he ‘took down’ his websites. He advised me that he was not connected, even though he used to be a “big seller” of these IPTV services. He asked to review the motion materials that referred to him specifically, and he reviewed the Affidavit of Mr. Andrew McGuigan at paragraphs 161-173, and 224- 266, and the written representations at paragraphs 58-67, and 70-71.
19. He further told me that he is not the owner of the domain names (or subdomain names) listed in the Beast IPTV Order, nor with the following domain names identified to me by the Plaintiffs’ legal representative: billing.beastsoftware.net, billing.strikeforcetvip.com, billing.thebeastbox.net, clients.gamersetv.com, and whmcs69.com. He again confirmed to me that he had no login credentials nor access to the accounts, and that the Plaintiffs’ could not link him to any of the accounts.
It should be noted that Mr. Lipkus reports further that “Colin Wright told me that he was not comfortable complying with the Beast IPTV Order without having his lawyer review the entirety of the materials served” (D. Lipkus’affidavit, para 22).
[32] Mr. Wright nevertheless agreed to supply some financial information to the independent supervising solicitor, as well as a list of his assets, as long as these were sealed in an envelope marked confidential. Here is how the matter was handled according to paragraph 22 of Mr. Lipkus’ affidavit:
22. … He agreed to fill out the consent forms provided to him by Ryan Evans, and he obtained the bank account numbers for TD Bank, and a joint RBC account - he listed the information on the consent forms provided, and signed them. He took photos of the forms, and I placed them into a sealed envelope marked CONFIDENTIAL DISCLOSURE (1 of 2). I placed a piece of tape over the words SEALED on the back of the envelope. He disclosed his assets to me and I wrote down this information on a sheet of paper. Colin Wright also took a photo of that sheet of paper. I then placed the handwritten document into a sealed envelope marked CONFIDENTIAL DISCLOSURE (2 of 2). I placed a piece of tape over the words SEALED on the back of the envelope. The sealed envelopes remain in my secure custody in a locked cabinet at Kestenberg Siegal Lipkus LLP’s office, located at 65 Granby Street, Toronto, Ontario, M5B1H8. Attached hereto and marked as Schedule “C” are digital copies of the front and back of the sealed envelopes I placed into the locked cabinet.
According to the evidence before the Court – no evidence was offered by Mr. Wright on the execution of the interim order, and Mr. Lipkus was neither contradicted nor cross-examined – that is the extent of the cooperation in the execution of the interim order by Mr. Wright.
B. Further information compiled and offered as evidence as a result of the execution of the two interim orders
[33] During the execution of the interim order concerning Tyler White, Andrew McGuigan, an investigator acting on behalf of the Plaintiffs, was monitoring the execution of the order from a remote location; in the days following, Global Content Protection (GCP), for whom Mr. McGuigan works, monitored “for any activities or changes to the Beast IPTV Service related to these enforcement efforts” (A. McGuigan’s second affidavit of November 30, 2020 at para 6). It is important that the contents of the affidavit be reviewed in some detail.
[34] Mr. McGuigan reports on the following:
the Defendants’ attempts to conceal evidence during the execution of the orders;
contact and/or coordination between the Defendants within hours of the execution of the interim orders;
transfer and/or deletion of the Beast IPTV Service domains and subdomains by the Defendants;
misrepresentations and deception by the Defendants concerning their involvement with the Beast IPTV Service;
Mr. White’s strategies to evade enforcement and to conceal assets;
Mr. Wright’s misrepresentations concerning his involvement with Beast IPTV Service.
I note that the evidence proffered by Mr. McGuigan was not contested other than the use made of information obtained from confidential sources.
[35] Thus, while the interim order concerning Mr. White was being executed, a confidential source advised GCP that Mr. White contacted a third party on Skype. The instructions given by Mr. White were to delete immediately the beastiptv.cc and the powergraphics.shop domains. They are both associated with the Beast IPTV Service, the powergraphics.shop domain being the payment portal associated with beastiptv.cc domain. Screen captures are put in evidence and the exchange involves “Ty” Mr. McGuigan’s affidavits identify “Ty” as being the user name associated with the Skype account “tylerdwhite1”. The Skype exchange shows the surprise of Ty’s interlocutor and how adamant Ty is about the deletions. At the end of the exchange, Ty explains “No. I [sic] getting sued”. Both domains were not online anymore within hours and their associated websites had been suspended. Mr. White remained in possession of his phone during the execution of the interim order.
[36] On November 25, there was a conversation, which was recorded, between Mr. White and a confidential source, which indicates that a third party would have reactivated beastiptv since Mr. White did not secure its registrar account. This short exchange refers to “Brad”, who is alleged to refer to Colin Bradley Wright, the other Defendant, thereby suggesting the continued involvement of “Brad”:
[11min05sec]
Third Party: I don't know man. You need to talk to Brad. You need to stop.
Mr. White: We are stopped… it's done. I already had Beast down… I took it down today. Somehow it came back up… and then when I try to login into the domain registrar I can't get into it now.
In the same recorded conversation, Mr. White indicates he may need the assistance of his interlocutor “in the next couple of days”:
[26min44sec]
Mr. White: I might need you… so… like in the next couple of days. Like if I'm paying you… I might need you to like to wipe wipe stuff… like wipe servers or wipe…. You know what I mean… so just be… ahh…
[37] The connection with Colin B. Wright is further referred to during the same conversation:
[4min03s]
3rd Party: …What… what happened, like they sent you a Court letter or how did it go down?
White: Oh they came and served me with this load of evidence… Yeah…It's like Columbia Pictures, [muffled] Netflix, Amazon, [Muffled]
…
[4min25s]
3rd Party: Did you talk to Brad about it?
White: Oh yeah… Oh yeah…. He knows.
I know. But it is what it is. You know.
…
[17mins15sec]
White: Well you know man… I don't … listen… I don't even look for sympathy. We did it ourselves we knew we knew what [muffled] risks are. I just need basically get them to know that… like to get them to think that I'm not the ring leader or I'm not in charge I don't control everything….
3rd Party: Did they talk to you about Brad and all that
White: Oh they did the same thing to Brad on the same day…
Mr. Colin B. Wright was the only other person served on November 24, 2020 in relation to the Beast IPTV Service:
3rd Party: What about all the mods and all that all the helpers and stuff?
White: No… No. That's what I’m telling them… I'm just a helper… you know.
…
[24min46s]
White: …When I talked to Sal… he said I need to find a lawyer that's with a big firm. So tomorrow I'm going to start calling around. It’s hard to find someone to take this case though… right?
3rd Party: That's always been an issue when these things happen there's always a few good ones in a few states but never in your area.
White: Yes. It doesn't matter because of my area b/c its federal court….So that's why like… All over Canada I could find one…But the problem is everybody we call… because even Brad is having a hard time… everybody we call, there's a conflict…
In his first affidavit, Mr. McGuigan had already testified as to the connection between the pseudonym “Brad B” and the username “@CVOmam” on Telegram, an instant messaging platform online used by the operators of the Beast IPTV Service to communicate with subscribers. GCP was monitoring user @CVOmam (“B”) on the morning of November 24. That user was signed in on Telegram when the team executing the interim order at the premises of Mr. Wright arrived. The user logged off at around 8:40 am. A photograph taken at 8:38:40 am, as members of the team were entering the premises, shows Mr. Wright using his phone. The Plaintiffs advance that Mr. Wright was in the process of signing out of the Beast IPTV Telegram group. Just minutes before, Colin Wright had told the independent supervising solicitor not having been involved in IPTV in over two years.
[38] The concealment of assets is also discussed during the November 25 telephone conversation with a third party:
[14min43sec]
Mr. White: …[muffled] to the bank took everything I could out and then you know obviously they'll see that and they'll say ‘where's that’… and I’ll be like ‘I don’t know. I stashed it, sorry. I f****d up’. Whatever it's civil court not criminal… right… but I'll still have what I took out, you know what I mean.
[16mins15sec]
Mr. White: I think if I …if I just friggen you know… just take out what I've got and then they sue me for whatever but I claim bankrupt and say I don’t have it … at least then I know that with the amount I can take out… I know that... you know… I'm good.
… what are they gonna do… I mean the amount to keep will keep me going for a while, right?
[21mins43s]
3rd Party: Ahhh… man… this is bad news, man.
White: Ah whatever man. Like I said… worst case scenario I'll friggin I got I guess I got enough to keep me keep me going…. You know… you know what I mean
[22min46sec]
3rd Party: Did they tell you not to take not to erase evidence and things like that…not to start wiping things down? Did they warn you about that?
Mr. White: Yeah.. They said don't… yeah…in the order it says I can't sell… I can't sell my house or nothing… I can't sell any assets… I can't move like… wire money or transfer money and I can't like change it into cryptocurrency or anything like that.
3rd Party: This is a court order or what they said?
Mr. White: Yeah it’s a court order… for 14 days… the Court order only lasts 14 days.
But like I said… yeah sure it’s a court order… but like even if they look and say you didn't listen to the court… I don't know I could even play it off… my dad's here… 'tell them you're a drug addict'… I could play it off say ‘sorry man I friggen went on a bender’… what [muffled] I need help… you know what I mean.
[39] As for the involvement of Mr. Wright, the Plaintiffs refer to information provided by a confidential source that “Brad” had requested moving two domains associated with Beast IPTV Service payment portals to a new server. A copy of the chat log is in evidence (Exhibit AM-73).
V. Submissions, arguments and discussion
[40] Two issues may be disposed of quickly. First, it is not disputed that the interim injunctions were executed properly and legally. Neither counsel for Mr. Wright nor counsel for Mr. White even allude to the issue, although both counsel raise issues concerning the orders themselves. At any rate, the evidence led by the Plaintiffs makes it plain that the duties incumbent on the Plaintiffs and the independent supervising solicitors were fully met. Among the various duties, I note the duty to explain the interim orders and to advise of the right to seek the assistance of counsel. The Statement of Claim, the Interim Order applicable to each Defendant, materials filed in order to be granted the said interim injunctions as well as a Notice of Motion the purpose of which was to review the interim orders were all served on November 24. A declaration that the execution of the interim orders was done properly and lawfully will be made.
[41] Second, the Plaintiffs seek an order authorizing the withdrawal of their deposit of $100,000. That sum of money was deposited with the Court as a security for damages that may have arisen out of an improper execution of the two interim injunctions. Given that there have not been any, the Plaintiffs are entitled to the order for the return of their deposit.
A. Contempt of court
[42] The matter of the issuance of an order pursuant to rule 467 of the Federal Courts Rules (show cause) can also be dealt with quickly. The Plaintiffs contend that both Defendants disobeyed the orders of the Court; as a matter of fact the Plaintiffs argue that both Defendants declined to cooperate fully. Only Mr. Wright provided some disclosure of financial information and a list of assets, left under seal in the hands of Mr. Lipkus, the independent supervising solicitor. The Defendants’ argument is to contend that if the interim orders are to be vacated, then not only an interlocutory injunction should not be issued, but there should not be an order pursuant to rule 467 of the Federal Courts Rules.
[43] With all due respect, this falls short of the mark. A court order is valid until it is quashed. In Wilson v The Queen, [1983] 2 SCR 594, Justice McIntyre stated at page 599:
It has long been a fundamental rule that a court order, made by a court having jurisdiction to make it, stands and is binding and conclusive unless it is set aside on appeal or lawfully quashed. …
The principle has not disappeared as it has been cited by the Federal Court of Appeal in Canada (Attorney General) v Lewry, 2012 FCA 125, at para 17 and Canada (Attorney General) v Siggelkow, 2012 FCA 123, at para 17.
[44] The principle of the validity of a court order, whether it is subsequently quashed or not, is discussed at length in Canada (Human Rights Commission) v Canadian Liberty Net, [1996] 1 FC 787 at paragraphs 16-19:
16 Our legal system is anchored in the rule of law. Hence, it is clear that, where a court issues an order, that order must be obeyed even if it turns out, for some reason, that it was issued in error. This is so because more is at stake than the simple question of the validity of a particular order. What is at stake is the very integrity and authority of the judicial institutions of Canada.
17 Citizens cannot choose to disobey court orders which they feel are wrong. That would be a recipe for chaos. In this country of "peace, order and good government," we must abide by court orders even while they are being legally challenged in the courts in an orderly way. This does not mean that courts never make mistakes; they clearly do. That is why we have an appeal system. If a litigant feels that a court decision was wrong, the appropriate course of conduct is to challenge it through the available legal channels, not to challenge it by refusing to obey it.
18 In my view, this is so regardless of the basis on which the correctness of the court order is assailed. For courts may err in a variety of ways. It should not make any difference whether the alleged error is one of fact, law, or evidence. It should be the same if the order is being impugned on constitutional grounds. Similarly, if the challenge is on a jurisdictional basis the order must be respected. This must be so, for otherwise anyone who wished to disobey a court order could claim that the court lacked the jurisdiction to issue that order, thereby circumventing this vital principle of obedience to judicial orders during challenges to their legality. The history of Canadian administrative law teaches us how rubbery the concept of jurisdiction can be, comprehending at times even egregious errors of law, fact and procedure. To countenance an exception to the principle for jurisdiction errors would risk rendering it virtually meaningless.
19 In all of these situations equally, in my view, the proper procedure to be followed by a litigant, who believes a court order was mistakenly made, is to appeal or to seek judicial review. In the interim, a stay may be sought. What cannot be tolerated in this country is people taking the law into their own hands and disobeying those court orders they feel are mistakenly made.
[45] Indeed, in Netbored Inc. v Avery Holdings Inc., 2005 FC 1405 [Netbored] , it was found that the plaintiffs could be charged with contempt of court for breaching the conditions of an interim injunction order that was subsequently vacated. At paragraph 77, Justice Hughes states
[77] While the Anton Piller Order has been vacated, that Order, save as to the portion respecting confidential information which always was a nullity, was from the time it was granted until this time, a valid Order of the Court. As such the Order was entitled to respect and to be obeyed by those affected by it. As stated by Goulding J. in Wardle Fabrics Ltd. v. G. Myristis Ltd., [1984] F.S.R. 263 at 271-272:
...I would have thought that if the court makes an order within its jurisdiction, by which I mean in such circumstances that the purported order is not a nullity in law, then a party is bound to obey it at his risk of contempt proceedings if he does not, and that the subsequent discharge of the order as having been irregularly obtained would not in logic and principle affect the disobedient party's liability to penalties for contempt. It seems to me the system of administering justice would break down if the subjects were entitled to apply their own or their adviser's ideas to the possibilities of subsequently setting aside an order and to disobey on the strength of such private judgment and then, if the judgement turned out not to have been right, be free from all penalty.
At paragraph 79, Justice Hughes goes on to issue the show cause order and at paragraph 80 he states that “(t)he fact that the Order was imprecise and now has been vacated does not remove the contempt”. Mr. Knopf, the counsel for Mr. Wright, conceded during the afternoon hearing that the case at hand is not one where the Court did not have jurisdiction. With this issue clarified, we can see that the breach of an interim order can rightly be the basis for an allegation of contempt, regardless of whether or not it is subsequently vacated.
[46] This position stated in Netbored on the validity of contempt proceedings, despite the order from which said proceedings arise later being found invalid, is in line with the same principle stated by the Supreme Court in Canada (Human Rights Commission) v Taylor, [1990] 3 SCR 892, at para 186:
186 Having found that the statutory provision on which the Tribunal's order was based is invalid, it follows that the order cannot continue to stand. I would therefore accede to the appellants' request that the Tribunal's order be quashed. However, the effective date of the quashing of the order must be the date that this judgment is issued. For the purposes of the contempt proceedings, it must be considered to be valid until set aside by legal process. Thus, the ultimate invalidity of the order is no defence to the contempt citation.
[My emphasis.]
[47] This principle continues to be authoritative and was taken up by Justice Lafrenière recently in Bacon St-Onge v Conseil des Innus de Pessamit, 2019 FC 794 at paragraph 67.
[48] It is worth noting that rule 399(1) of the FCR provides that an ex parte order may be set aside or varied because “the party against whom the order is made discloses a prima facie case of why the order should not have been made”. But the fact that the order is set aside does not affect its validity. Paragraph (3) of rule 399 states:
Effect of order
Effet de l’ordonnance
(3) Unless the Court orders otherwise, the setting aside or variance of an order under subsection (1) or (2) does not affect the validity or character of anything done or not done before the order was set aside or varied.
(3) Sauf ordonnance contraire de la Cour, l’annulation ou la modification d’une ordonnance en vertu des paragraphes (1) ou (2) ne porte pas atteinte à la validité ou à la nature des actes ou omissions antérieurs à cette annulation ou modification.
It follows that a show cause order will be issued if the conditions for its issuance are met.
[49] For an order under rule 467 to issue, the Court must be “satisfied that there is a prima facie case that contempt has been committed” (rule 467(3)). The Plaintiffs must present evidence at the show cause stage that there is a court order, that the Respondents have the knowledge of the order and that they deliberately disobeyed the order (Mennes v Oddie, 2001 FCT 571, at para 5, Orr v Fort Mckay First Nation, 2012 FC 1436, at paras 13 to 15; more generally on the three elements, Carey v Laiken, 2015 SCC 17, [2015] 2 SCR 79, at paras 32 to 35).
[50] The uncontradicted evidence of the two independent supervising solicitors provides ample proof of the required elements, such that I am satisfied that a prima facie case exists. The interim orders were served on the Defendants and they were explained to the Defendants who explicitly chose to disregard them. A prima facie case has therefore been made and an order pursuant to rule 467 is granted. The specific elements of the interim orders alleged to have been disobeyed are listed in the order appended to the judgment and reasons for judgment.
B. Should the interim orders be set aside
[51] The Defendants argue that the interim orders ought to be set aside for a variety of reasons. In the case of Mr. Wright, he argues that the interim order contains an Anton Piller order and a Mareva injunction. The requisite elements to be granted such order were not met; the Plaintiffs have relied on confidential sources, which should result in the information be declared inadmissible or be given no weight.
[52] As for Mr. White, he also claims that the Plaintiffs have failed to meet the requirements for an Anton Piller order:
insufficient evidence that Mr. White had in his possession incriminating documents or “things”;
Plaintiffs have not shown a real possibility that Mr. White may destroy documents or “things” before the discovery process;
the damage to be suffered by the Plaintiffs was not proven through sufficient admissible evidence;
the Court was not well served by the Plaintiffs in that there is recent jurisprudence from the Federal Court of Appeal which undermines the Plaintiffs’ contention around the “making available” in their Statement of Claim, in view of comments made by the Court of Appeal about ss. 2.4(1.1) of the Copyright Act.
I will examine these arguments in seriatim.
(1) Mr. Wright
[53] Mr. Wright accurately states that the Statement of Claim discusses, among other things, with respect to the development, operation, maintenance, promotion and sale of subscriptions to the Beast IPTV Service, which is said by the Plaintiffs to be an “unauthorized internet streaming service that provides unauthorized, immediate and unlimited access to a vast amount of cinematographic works for which the copyright is owned by the Plaintiffs to tens of thousands of subscribers around the world, including Canada” (Statement of Claim dated October 2, 2020, para 14).
[54] IPTV Services