Date: 20000811
Docket: T-686-99
BETWEEN:
WIC PREMIUM TELEVISION LTD.
Plaintiff
- and -
ROY LEVIN a.k.a. ROY LEVINE, JOHN DOE, JANE DOE
and ANY OTHER PERSON OR PERSON FOUND ON THE
PREMISES OR IDENTIFIED AS WORKING AT THE PREMISES
AT 1830 DUBLIN AVENUE, WINNIPEG, MANITOBA WHO
OPERATE OR WORK FOR BUSINESSES CARRYING ON
BUSINESS UNDER THE NAME AND STYLE OF "STARLINK",
"STARLINK INC.", "STARLINK CANADA", "STARLINK MANITOBA",
OR ONE OR MORE OF THEM,
ROY LEVINE a.k.a. STAR"LINK CANADA (1998), STARLINK INC.
3563716 MANITOBA LTD. a.k.a. STAR"LINK MANITOBA and
3942121 MANITOBA LTD. a.k.a. STAR"LINK CANADA
SATELLITE SERVICE
Defendants
REASONS FOR ORDER AND ORDER
O"KEEFE J.
[1] This is a motion by the applicant in the above-entitled action, WIC Premium Television Ltd. ("WIC") for an interlocutory injunction prohibiting the defendants from directly or indirectly manufacturing, importing, distributing, leasing, selling, installing, or operating equipment or devices used to decode encrypted subscription programming signals that are not transmitted or broadcast by a lawful distributor; and an interlocutory injunction prohibiting the defendants from encouraging, assisting, aiding or abetting others in doing the same.
BACKGROUND FACTS
| [2] WIC is an Edmonton based broadcaster conducting business throughout Western |
Canada offering subscriptions for premium commercial-free movie channels. Among these is "SUPERCHANNEL". The signals are transmitted both through cable television companies and Direct to Home ("DTH") satellite undertakings. The only two DTH undertakings with licences from the Canadian Radio and Telecommunications Commission ("CRTC") are "StarChoice" and "ExpressVu". WIC is apparently the holder of licences from the various copyright owners of the various films and programs shown as a part of its programming. WIC is also the holder of a licence from the CRTC in respect of this programming.
| [3] The defendant, Roy Levin is the principal of the various corporate defendants, |
collectively referred to here as STARLINK, carrying on business out of a storefront location in Winnipeg. The business is engaged in the selling of satellite dishes as well as devices used for decoding encrypted television signals. The devices decode the signals of "USSB" and "Echostar" programming. This programming includes the signals of HBO and SHOWTIME-which are also premium commercial-free movie programming. SUPERCHANNEL is not a part of the programming offered on USSB or Echostar. These signals originate in the United States and are not subject to a licence from the CRTC.
| [4] The decoders sold by STARLINK are apparently obtained in the United States |
from the service providers. There is evidence that American service providers will not knowingly sell decoders and subscriptions for this programming to Canadian subscribers. WIC draws the inference that the decoders are obtained by STARLINK by providing false U.S. addresses to the service provider. It is alleged that STARLINK in turn re-sells the decoders and subscriptions.
| [5] On April 19, 1999, WIC commenced this action for a permanent injunction |
restraining the defendants from conducting this business and sought general damages of $10,000,000 and punitive damages of $100,000. An Anton Pillar Order, which included a plaintiff"s undertaking as to damages, was granted on April 19, 1999. Subsequently, on April 28, 1999, the Order was set aside and the material seized during the execution of the Order was returned to the defendants.
| [6] The defendants filed a counterclaim against WIC and the law firm which aided in |
the execution of the Anton Pillar Order. The counterclaim claimed damages resulting from the interference with the defendants" business during the execution of the Anton Pillar Order and during the week in which the Order was effective. The counterclaim also concerns allegations of false imprisonment.
ISSUE
| [7] 1. Should an interlocutory injunction be granted to the plaintiff in the case at |
bar?
APPLICABLE LAW
Test for an Interlocutory Injunction
| [8] The current law with respect to the granting of interlocutory injunctions was |
stated in American Cyanamid v. Ethicon Ltd., [1975] A.C. 396 (H.L.) and adopted as the law in Canada in Manitoba v. Metropolitan General Stores, [1987] 1 S.C.R. 110 and reaffirmed recently in RJR MacDonald v. Canada (Minister of Health), [1994] 1 S.C.R. 311.
| [9] The Cyanamid test, as articulated by Lord Diplock, provided a process to the |
determination of whether an injunction should be granted:
| 1. First, the Court must determine whether the plaintiff has presented a serious case to be tried. "Serious case to be tried" is effectively defined as a case that is not frivolous or vexatious. |
| 2. Second, irreparable harm. The Court must consider whether damages would provide the plaintiff with an adequate remedy if the plaintiff were ultimately successful. If the answer is yes, then the injunction should be refused. If not, the second step under irreparable harm is to determine whether the plaintiff"s undertaking as to damages would adequately compensate the defendant for loss as a result of an interlocutory injunction, should the defendant prevail at trial. |
| 3. Finally, balance of convenience. If there is doubt as to the adequacy of damages, the determination of whether to grant an injunction should turn on this factor. The balance of convenience is a determination of the relative impact upon the parties of the granting or withholding relief. The key question to ask is: "Is the inconvenience to the defendant, should the injunction be granted, more substantial than the inconvenience the plaintiff will suffer if relief is withheld?". If the inconvenience that the defendant will suffer if an injunction is granted is more substantial than the inconvenience to the plaintiff if relief is denied, the injunction should be refused. |
| [10] Manitoba, supra, noted that the threshold at the first step is a low one, with the |
motions judge making a preliminary assessment of the merits of the case. Once satisfied that it is not frivolous or vexatious, the Court should proceed to consideration of the other factors of the Cyanamid test. According to R.J. Sharpe, Injunctions and Specific Performance, (3rd ed.), Canada Law Book, (Toronto: 1999), however, the strength of the case is usually considered in greater detail and the plaintiff is normally effectively required to show a "reasonable chance of success".
| [11] With respect to the second factor, irreparable harm, the plaintiff must show a |
threat to rights produced by the combination of the defendants" conduct and the delay until trial . More specifically, the plaintiff must show that if an immediate remedy is withheld, the plaintiff"s rights will be so compromised by the time of trial and final judgment, that it will be too late to afford complete relief. From RJR, supra :
| Irreparable refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other. Examples of [harm that cannot be quantified in monetary terms] include where one party will be put out of business; where one party will suffer permanent market loss . . . |
| [12] And with respect to the balance of convenience, Lord Diplock in Cyanamid, |
supra, stated as follows:
| . . . the plaintiff"s need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plaintiff"s undertaking in damages if the uncertainty were resolved in the defendant"s favour at the trial. The court must weigh one need against another and determine where the balance of convenience lies. |
Statutory Provisions
| [13] The basis for WIC"s underlying action in this case is found within Section 18 of |
the Radiocommunication Act, R.S.C. 1985, c. R-2:
| 18. (1) Any person who (a) holds an interest in the content of a subscription programming signal or network feed, by virtue of copyright ownership or a licence granted by a copyright owner, (b) is authorized by the lawful distributor of a subscription programming signal or network feed to communicate the signal or feed to the public, (c) holds a licence to carry on a broadcasting undertaking issued by the Canadian Radio-television and Telecommunications Commission under the Broadcasting Act, or . . . may, where the person has suffered loss or damage as a result of conduct that is contrary to paragraph 9(1)(c), (d) or (e) or 10(1)(b), in any court of competent jurisdiction, sue for and recover damages from the person who engaged in the conduct, or obtain such other remedy, by way of injunction, accounting or otherwise, as the court considers appropriate. . . . (4) For the purposes of an action under subsection (1), the Federal Court is a court of competent jurisdiction. |
| 18. (1) Peut former, devant tout tribunal compétent, un recours civil à l'encontre du contrevenant quiconque a subi une perte ou des dommages par suite d'une contravention aux alinéas 9(1)c), d) ou e) ou 10(1)b) et_: a) soit détient, à titre de titulaire du droit d'auteur ou d'une licence accordée par ce dernier, un droit dans le contenu d'un signal d'abonnement ou d'une alimentation réseau; b) soit est autorisé, par le distributeur légitime de celui-ci, à le communiquer au public; c) soit est titulaire d'une licence attribuée, au titre de la Loi sur la radiodiffusion, par le Conseil de la radiodiffusion et des télécommunications canadiennes et l'autorisant à exploiter une entreprise de radiodiffusion; . . . Cette personne est admise à exercer tous recours, notamment par voie de dommages-intérêts, d'injonction ou de reddition de compte, selon ce que le tribunal estime indiqué. . . . (4) La Cour fédérale est, pour l'application du paragraphe (1), un tribunal compétent. |
| [14] And paragraph 9(1)(c) provides: |
| 9. (1) No person shall (c) decode an encrypted subscription programming signal or encrypted network feed otherwise than under and in accordance with an authorization from the lawful distributor of the signal or feed; |
9. (1) Il est interdit_: c) de décoder, sans l'autorisation de leur distributeur légitime ou en contravention avec celle-ci, un signal d'abonnement ou une alimentation réseau; |
| [15] In ExpressVu v. NII Norsat International Inc. [1998] 1 F.C. 245, Justice Gibson |
| held that to be a lawful distributor, in addition to holding copyright or a licence from the copyright owner in respect of the programming, one had to be the holder of a CRTC licence. If there was no CRTC licence in respect of the programming decoded, there was no lawful distributor of that signal, and paragraph 9(1)(c) was violated by decoding such signals. The Court of Appeal affirmed this interpretation of paragraph 9(1)(c) in ExpressVu, supra, unreported, November 20, 1997, Docket A-541-97. ExpressVu concerned a CRTC licenced satellite service provider complaining of acts similar to those that the defendants in the case at bar, are alleged to be engaged in. |
| ANALYSIS |
| Application of the Test |
1. Serious Issue to be Tried
| [16] In my view, consideration of this aspect of the test in the plaintiff"s favour |
necessitates a finding that the plaintiff can prove that the activities of the defendants attract the application of section 9 of the Radiocommunication Act and that the plaintiff can prove damage or loss resulting therefrom. The merits of the case cannot be frivolous or vexatious and should indicate the action stands a reasonable chance of success at trial.
| [17] Given the interpretation of the meaning of "lawful distributor" that was adopted |
by Justice Gibson and approved of by the Court of Appeal, the plaintiff has demonstrated a strong case with respect to the activities of the defendants being unlawful under paragraph 9(1)(c), such that the civil cause of action under section 18 of the Act is open to WIC. However, the second consideration, proof of damage or loss, is much less strong. It must be borne in mind that the defendants are not alleged to be decoding WIC"s own signals. It is possible, however, that the plaintiff could lead evidence that it was given the sole right to transmit a particular movie in Canada, and if such a movie is also being transmitted by HBO or SHOWTIME, WIC could conceivably show damage or loss.
| [18] Given this, and recognizing that the merits of the case ought not be examined too |
closely at this preliminary stage, I believe that the plaintiff has shown a serious issue to be tried.
2. Irreparable Harm
[19] Pursuant to RJR, supra, to be irreparable, the harm suffered by WIC must be harm that cannot be quantified in monetary terms or which cannot be cured at the conclusion of the trial on the merits. The Court in RJR provided examples of such irreparable harm as being when one party will be put out of business or one party would suffer permanent market loss.
[20] In the case at bar, I am not satisfied that the plaintiff is likely to suffer irreparable harm if the interlocutory injunction is refused. Any damages suffered as a result of purported violation of paragraph 9(1)(c) of the Act are easily quantifiable in monetary terms. Damages as a result of loss of market share or loss of customers, actual or potential, are also quantifiable in monetary terms.
[21] Although it is not necessary in light of my finding I will discuss the remaining tests for granting an injunction in this case. The second aspect of the irreparable harm test will now be considered " irreparable harm to the defendants. With respect to the defendants, I believe that the plaintiff"s undertaking as to damages would not adequately compensate the defendants for any loss. The loss of sales and profits as a result of the injunction are quantifiable but the defendants would effectively be out of business. The impact on the defendants is great and I do not believe justified.
3. Balance of Convenience
| [22] Given the circumstances of this case, I also believe that the balance of |
convenience favours the defendants. As there is no doubt in my mind that the plaintiff would not suffer irreparable harm, consideration of this third aspect of the Cyanamid test is actually unnecessary as I have already determined that the plaintiff will not suffer irreparable harm. There is no theft of a signal in this case. WIC operates throughout Western Canada, while STARLINK operates only in one location in Winnipeg. I believe I am reasonable in characterizing STARLINK"s business as small scale. I do not believe that WIC would suffer serious inconvenience if the injunction is not granted. And conversely, I believe that STARLINK would be greatly inconvenienced if one is granted.
| [23] It must be borne in mind that an interlocutory injunction was always considered to |
be an extraordinary remedy. In my view, it must always remain extraordinary and only granted where there are compelling reasons for doing so, pursuant to the tripartate test.
| [24] At the commencement of the hearing, the defendants were willing to consent to an |
injunction with respect to the black market, however, the parties were in disagreement as to what "black market" meant. Hence, there cannot be an injunction with respect to "black market" on consent.
| [25] For all of the above reasons, I would deny the motion for an interlocutory |
injunction.
| [26] If the parties can not agree on the issue of costs by September 1, 2000 the parties |
may make written representations to me with respect to the issue of costs by September 15, 2000 and I hereby reserve the right to make a ruling on the issue of costs.
ORDER
| [27] The motion for an interlocutory injunction is dismissed. |
| [28] If the parties can not agree on the issue of costs by September 1, 2000 the parties |
may make written representations to me with respect to the issue of costs by September 15, 2000 and I hereby reserve the right to make a ruling on the issue of costs.
"John A. O"Keefe"
J.F.C.C.
Toronto, Ontario
August 11, 2000
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-686-99
| STYLE OF CAUSE: WIC PREMIUM TELEVISION LTD. |
- and -
| ROY LEVIN a.k.a. ROY LEVINE, JOHN DOE, JANE DOE and ANY OTHER PERSON OR PERSON FOUND ON THE PREMISES OR IDENTIFIED AS WORKING AT THE PREMISES |
| AT 1830 DUBLIN AVENUE, WINNIPEG, MANITOBA WHO OPERATE OR WORK FOR BUSINESSES CARRYING ON BUSINESS UNDER THE NAME AND STYLE OF "STARLINK", |
| "STARLINK INC.", "STARLINK CANADA", "STARLINK MANITOBA", OR ONE OR MORE OF THEM, ROY LEVINE a.k.a. STAR"LINK CANADA (1998), STARLINK INC. 3563716 MANITOBA LTD. a.k.a. STAR"LINK MANITOBA and 3942121 MANITOBA LTD. a.k.a. STAR"LINK CANADA |
| SATELLITE SERVICE |
PLACE OF HEARING: WINNIPEG, MANITOBA
DATE OF HEARING: MONDAY, FEBRUARY 28, 2000
REASONS FOR ORDER AND ORDER OF O"KEEFE J.
DATED: THURSDAY, AUGUST 11, 2000
APPEARANCES:
Mr. Timothy G. Anderson
Mr. Gregory Cheung
FOR PLAINTIFF
Mr. Roy Levin
On His Own Behalf
FOR DEFENDANT,
ROY LEVIN
Mr. Dean Giles
FOR DEFENDANT, On Behalf of Interested Parties
SOLICITORS OF RECORD:
Crawford, McKenzie, McLean & Wilford
Orillia, Ontario
FOR PLAINTIFF
Mr. Roy Levin
c/o Winnipeg Local Office
4th Floor
363 Broadway
Winnipeg, Manitoba
R3C 3N9
FOR DEFENDANT,
Roy Levin
Fillmore Riley
Winnipeg, Manitoba
FOR DEFENDANT
On Behalf of Interested Parties
FEDERAL COURT OF CANADA
TRIAL DIVISION
Date: 20000811
Docket: T-686-99
BETWEEN:
WIC PREMIUM TELEVISION LTD.
Plaintiff
- and -
ROY LEVIN a.k.a. ROY LEVINE, JOHN DOE, JANE DOE and ANY OTHER PERSON OR PERSON FOUND ON THE PREMISES OR IDENTIFIED AS WORKING AT THE PREMISES AT 1830 DUBLIN AVENUE, WINNIPEG, MANITOBA WHO OPERATE OR WORK FOR BUSINESSES CARRYING ON BUSINESS UNDER THE NAME AND STYLE OF "STARLINK", "STARLINK INC.", "STARLINK CANADA", "STARLINK MANITOBA",
OR ONE OR MORE OF THEM, ROY LEVINE a.k.a. STAR"LINK CANADA (1998), STARLINK INC.
3563716 MANITOBA LTD. a.k.a. STAR"LINK MANITOBA and 3942121 MANITOBA LTD. a.k.a. STAR"LINK CANADA SATELLITE SERVICE
Defendants
REASONS FOR ORDER AND ORDER