COURT FILE NO.: CV-11-9069-00CL;

DATE: 20121029

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BELL EXPRESSVU LIMITED PARTNERSHIP, Plaintiff

AND:

CURT-MICHAEL PIECKENHAGEN, a.k.a. CURT MICHAEL PIECKENHAGEN, a.k.a CURT PIECKENHAGEN a.k.a CURT-MICHAEL PIECKENHAYEN a.k.a. CURTIS MICHAEL, KURT PIECKENHAGEN, MEGAN ANDERSON, JULITA PIECKENHAGEN, JULITA-LUISE PIECKENHAGEN a.k.a. JULIE LUISE, VERA PIECKENHAGEN, CHRISTOPHER BROOKS a.k.a. JASON BROOKS, 1125749 ONTARIO LIMITED, ECCELERATED DIGITAL, ACCELERATED DIGITAL COMMUNICATIONS INC., 121429 ONTARIO INC., 373041 ONTARIO INC., GRAYDON HALL PROPERTY MANAGEMENT LTD., GH CAPITAL CORPORATION, JASON BROOKS, JOHN DOHLEM, JOE HARVEY, JULIE LUISE, MARTIN MAI, CURTIS MICHAEL, JACK RUSHER, and ALAN PARSONS, Defendants

BEFORE: CUMMING J.

COUNSEL:
Christopher D. Bredt and Denise Bambrough, for the Plaintiff, Bell ExpressVu Limited Partnership

Melvyn L. Solmon and Nancy Tourgis, for the Defendants. 373041 Ontario Inc., Kurt Pieckenhagen, Julita Pieckenhagen, Julita-Luise Pieckenhagen, Vera Pieckenhagen, Christopher Brooks, Nicole Pieckenhagen, Graydon Hall Property Management Ltd. and GH Capital Corporation

Michael A. Spears, for the Defendants, Curt-Michael Pieckenhagen, 1125749 Ontario Limited, Eccelerated Digital, Accelerated Digital Communications Inc., and 121429 Ontario Inc.

HEARD: October 2, 3, and 4, 2012

ENDORSEMENT

The Parties

[ 1 ] The Plaintiff, Bell ExpressVu Limited Partnership (“Bell”), is, inter alia, a Canadian satellite television broadcaster, licensed by the Canadian Radio and Telecommunications Commission (the “CRTC”), providing encrypted satellite television programming direct-to-home to customers who have purchased Bell’s service. Bell retains the exclusive right to authorize decoding of its programming in Canada.

[ 2 ] Bell issued a Statement of Claim against the Defendants on January 24, 2011, alleging that the Defendants were engaged in a fraudulent scheme by subscribing to a number of Bell’s residential subscriber accounts, by utilizing the equipment associated with these accounts together with a “satellite master antennae television system” (the “SMATV System”), by receiving and decoding satellite signals, combining and converting the signals into a single integrated cable signal, and distributing Bell’s programming to hundreds of tenants in the Graydon Hall Apartments without authorization by, or payment to, Bell. Bell claims a significant loss of revenue and unjust enrichment to the Defendants to the detriment of Bell.

[ 3 ] A SMATV System is often authorized by Bell via a so-called “MDU Agreement”, in exchange for fees, to be employed by owners or operators of apartment buildings or other commercial properties as a means to distribute satellite television programming to a multitude of individual units within a subject property in exchange for fees paid to Bell .

[ 4 ] SMATV Systems are sometimes used unlawfully to distribute Bell programming, This is reportedly done by way of a scheme in which an owner of a commercial building with multiple apartment units sets up a number of Bell residential subscriber accounts, often utilizing false names and addresses, and then fraudulently employing a SMATV System (via a SMATV server located within the building that splits and distributes the Bell programming) to decode the satellite signals authorized to be received by those residential subscriber accounts and retransmit the signals to an unlimited number of multiple individual units within the commercial property, charging the occupants of the units a subscription fee (often included in the overall rental) for the programming.

[ 5 ] The Defendant, Kurt Pieckenhagen (“Kurt”), resides in Toronto and is the father of the Defendant Curt-Michael Pieckenhagen (“Curt-Michael”), who also resides in Toronto.

[ 6 ] The Defendant Kurt is the sole officer and director of the corporate Defendants, GH Capital Corporation (“GH Capital”), Graydon Hall Property Management Ltd. (“GH Property”) and 373041 Ontario Limited (“373”), the owner of three rental apartment buildings located at 50, 100 and 150 Graydon Hall Drive in Toronto (the “Graydon Hall Apartments”).

[ 7 ] The Defendant Curt-Michael is the sole officer and director of the corporate Defendants, Accelerated Digital Communications Inc. (“Accelerated”) and 1125749 Ontario Limited (“112”), which has carried on business as “Eccelerated Digital”.

[ 8 ] The other Defendants include the spouses of Curt-Michael and Kurt, and other individuals and corporations who are alleged to have assisted, aided and abetted the actions of the Defendants Kurt and Curt-Michael by allowing their residential addresses to be used in the SMATV Scheme.

The Motions

[ 9 ] The Defendants, Kurt and Curt-Michael, together with the Defendants, Julia Pieckenhagen, Julita-Luise Pieckenhagen, Vera Pieckenhagen, Christopher Brooks, 373, GH Capital and GH Property (collectively the “373 Defendants”), together with the Defendants, Curt-Michael, 112 and Accelerated (collectively, the “Accelerated Defendants”), bring motions for summary judgment, seeking to have the action dismissed on the basis that Bell failed to commence its action within the applicable limitation periods under s. 18(5) of the Radiocommunication Act , R.S.C. S.O. 1985, c. R. 2, as am. and s. 4 of the Limitations Act, 2002 , S.O.s 2002, c. 24.

[ 10 ] These Defendants also bring motions to set aside the Anton Piller Order granted by myself on an ex parte basis on January 28, 2011 (the “ Anton Piller Order”). They also seek an order excluding the evidence obtained pursuant to the Anton Piller Order.

[ 11 ] I shall first deal with the motions to set aside the Anton Piller Order.

The Defendants’ Motions to set aside the Anton Piller Order

[ 12 ] A court is required to conduct a de novo hearing as to whether a plaintiff is entitled to a continuation of an Anton Piller order but is entitled to consider evidence obtained since the granting of the order.

[ 13 ] The Anton Piller Order dated January 28, 2011 is directed only against certain Defendants, being Curt-Michael, Kurt, 112, GH Property, GH Capital, Accelerated, Eccelerated and 373 and was limited to the residence of Curt-Michael, his car, the post office box to which the Bell invoices were directed and certain apartments and areas within the Graydon Hall Apartments.

[ 14 ] The requirements for an Anton Piller Order are set forth in Celanese Canada Inc. v. Murray Demolition Corp. , 2006 SCC 36 , [2006] S.C.J. No. 35 at para. 35 (S.C.C.).

A Strong Prima Facie Case

[ 15 ] In my view, the evidentiary record, as seen from the affidavit evidence of Wayne Gow, Mark Fonseca, Gavin Phillips and Chad Winslade, establishes a strong prima facie case that a large number of channels of Bell were being provided on an unauthorized basis by the Defendants named in the Anton Piller Order. The evidentiary record strongly suggests that the subject Defendants engaged for profit in the operation of an unauthorized SMATV System at the Graydon Hall Apartments, which enabled tenants to view Bell programming without authorization from Bell. The evidence suggests that some of the residential subscriber accounts being employed in the unauthorized activities were identified as associated with the Defendants and were created through using aliases or false names.

[ 16 ] The execution of the January 28, 2011 Anton Piller Order confirmed that an unauthorized SMATV System was being operated at the Graydon Hall Apartments, using receivers that were activated on several residential subscriber accounts with Bell. The Defendant Curt-Michael admitted on his cross-examination that false names and false addresses were utilized for some of these accounts.

[ 17 ] The evidence gives rise to several possible causes of action, including statutory causes of action under s. 9(1)(c), (e) and 10(1)(b) of the Radiocommunication Act, an action for breach of contract and a claim for unjust enrichment and restitution. Essentially, these causes of action arise because it is unlawful to decode and use Bell’s signal without its authorization.

[ 18 ] The position of the Defendants is that they were in fact “authorized” to receive and decode Bell’s encrypted signal and that the SMATV System in use at the Graydon Hall Apartments was “authorized” in accordance with CRTC’s Exemption Criteria for Master Antenna Television Systems under Broadcasting Public Notice CRTC 2002-35.

[ 19 ] The evidentiary record contradicts all of the Defendants’ assertions. The only “authorizations” given to the Defendants were for the limited purpose of viewing Bell’s programming at the named individuals’ residences pursuant to residential subscriber accounts. There was no “authorization” to commercially decode and sell the signal to others, i.e. tenants of the Graydon Hall Apartments. As well, the “authorization” to use Bell’s signal to view programming in the named individuals’ private residences was violated as false names and addresses were used. As well, the receivers were not utilized within the private residences of the Bell customers named in the residential subscriber contracts. The reasonable inference is that the accounts were set up and used in the SMATV System for an unlawful purpose, namely, to misappropriate Bell’s signal to the profit of the Defendants. The evidence establishes that the Defendants profited from the unlawful acts.

[ 20 ] Arguably, Bell also has a strong prima facie cause of action against some of the Defendants for breach of sections 1, 5 and 8 of Bell’s Residential Customer Agreement. The evidence also establishes a strong prima facie case against the Defendants for civil conspiracy, conversion, fraud and fraudulent misrepresentation.

Very serious damages

[ 21 ] The evidentiary record indicates the damages, potential or actual, to the Plaintiff by reason of the Defendants’ alleged misconduct, are very serious.

[ 22 ] The inference from the evidence is strong that Bell lost considerable sales and profits as a result of the Defendants’ unlawful acts. The Defendant Curt-Michael admits that Accelerated received some $929,694.70 from March 1, 2007 through to January 31, 2011 from tenants in the Graydon Hall Apartments while refusing to provide documentation as to the revenues.

[ 23 ] There is evidence that the Defendants have been engaged in the alleged unlawful activities since about 1999.

Evidence that the Defendants have in their Possession Incriminating Documents or Things

[ 24 ] The number of persons receiving Bell’s programming through the Defendants’ unauthorized SMATV system and the types of programming watched were unknown to Bell without access to the unauthorized SMATV System and the business records of the parties operating it.

Possibility of Destruction of Evidence in the Absence of an Anton Piller Order

[ 25 ] As well, it is clear that there would be an inability on the part of Bell to prove its case, either as to liability or damages, should the infringing equipment or other vital evidence, including the evidence as to the names, addresses and other particulars of persons with whom the Defendants have done business, not be available before the discovery process and for trial. See Bell ExpressVu Limited Partnership v. Rogers, [2007] O.J. No. 4569 at para. 11 (S.C.J.) .

[ 26 ] The primary aim of an Anton Piller order is to preserve evidence to ensure that a pending civil action is not frustrated through the lack of that evidence. The evidence in the situation at hand (including the use of false names and addresses, and a misrepresentation by the Defendant Kurt to Industry Canada in 2007 when he was asked as to the use of the satellite dishes at the Graydon Hall Apartments and a misrepresentation by the Defendant Curt-Michael in 2007 as to the location of the receivers obtained through a residential subscriber contract with Bell) leads to the reasonable inference that the Defendants knew full well they were engaging in unlawful activities.

[ 27 ] This leads to a reasonable inference the Defendants would destroy or conceal incriminating documents or equipment if they became aware of the possibility of discovery of their activities. See Dunlop Holdings Ltd. & Another v. Staravia Ltd. , [1982]Com. L.R. 3 (C.A.). Indeed, as Mr. Gow describes in his affidavit, although the Anton Piller Order was served at about 8:00 a.m. on February 1, 2011, access to some parts of the premises, including the so-called Server Room at the Graydon Hall Apartments, was not granted until about midnight following Bell’s threat of contempt proceedings if the Anton Piller Order was not complied with.

The Defendants’ Submissions

[ 28 ] The Defendants make several allegations as to Bell’s conduct in support of their motion to set aside the Anton Piller Order. In my view, none of these allegations are supported by the evidence.

[ 29 ] Bell had a duty of “full and fair disclosure” in respect of material facts on the ex parte motion for an Anton Piller Order, as required by Rule 39.01 (6) of the Rules of Civil Procedure. See United States v. Friedland , [1996] O.J. No. 4399 at para. 27 (Gen. Div.) . The Defendants allege that Bell failed in its duty of disclosure.

[ 30 ] In my view, Bell met this stipulation in the case at hand and made full and fair disclosure. Moreover, orders should not be set aside for mere imperfections in affidavits or because of inconsequential facts being undisclosed. Even if there were a finding of non-disclosure in the case at hand, in my view, considering all the evidence, it would at most have been unintended and in respect of inconsequential facts. See Coca-Cola Ltd. v. Pardhan (c.o.b. Universal Exporters) , [2003] F.C.J. No. 22 at para. 26 (Fed. C.A.) ; Ontario Realty Corp. v. P. Gabriele & Sons Ltd. , [2000] O.J. No. 477 (S.C.J) , leave to appeal denied, [2001] O.J. No. 477 (Div. Ct.) .

[ 31 ] The Defendants assert that Bell employed inflammatory language and sensationalized the conduct of the Graydon Hall Defendants in referencing “piracy” in their Anton Piller motion materials. Bell’s clear position is that the Defendants were not authorized to set up the SMATV accounts and use false names and aliases and false addresses, and take the receivers that were activated for the sole purpose of residential use and use them through the SMATV System to retransmit Bell programming to tenants of the Graydon Hall Apartments for the Defendants own commercial gain. The language employed by Bell in its motion materials was really meant to convey simply and forcefully that the Defendants knowingly misappropriated Bell’s programming for their own profit and to Bell’s detriment.

[ 32 ] The Defendant Curt Michael asserts the view that the SMATV System employed by the Defendants was authorized. His argument amounts to saying that an apartment building owner never has to enter into any agreement with a satellite provider such as Bell - rather, that the apartment building owner can simply pay for one residential account and then split and retransmit the programming to hundreds of tenants for the building owner’s own commercial gain. This asserted view makes no apparent sense.

[ 33 ] Moreover, the experience of the Defendant 373 in litigation with Rogers Cable TV Limited (“Rogers”) in 1994, would arguably lead any reasonable person to conclude that the SMATV System employed by the Defendants in respect of Bell programming was unlawful.

[ 34 ] In the early 1990s, Rogers had provided cable television to the Graydon Hall Apartments. Rogers commenced an action in 1994 against 373 and 1012764 Ontario Limited, operating as “Satcom”, which provided a SMATV System at the Graydon Hall Apartments. Rogers claimed that the Satcom SMATV System violated s. 32 of the Broadcasting Act and was not in compliance with a predecessor of CRTC Public Notice 2002-35.

[ 35 ] On June 7, 1996, Epstein J., as she then was, held that the Satcom SMATV System did not comply with the exemption criteria and was therefore unlawful. On December 9, 1998, the Court of Appeal upheld this decision and granted the sought injunction. Rogers Cable TV Ltd. v. 373041 Ontario Limited, 1996 21852 (ON SC) , [1996] O.J. No.. 2033 at paras. 3-11 (Gen. Div.), varied on appeal, 1998 1093 (Ont. C.A.).

[ 36 ] The Defendant Accelerated was incorporated on January 27, 1999, less than two months after the Court of Appeal decision ordering 373 and Satcom to cease operating the Satcom SMATV System. It would seem that Accelerated’s only customer has been 373 and that the purpose of incorporating Accelerated was to continue to provide television programming services to tenants at the Graydon Hall Apartments notwithstanding the injunction in the case involving Rogers.

[ 37 ] The Defendant Curt-Michael says that a so-called “Agency Agreement” was prepared for Accelerated with a view to structuring an arrangement that would comply with the exemption for SMATV Systems provided for under the Broadcasting Act . Section 1.00 of the Agency Agreement provides that Accelerated is to make available the services contemplated by the Agreement as the “agent” of 373. Section 6.00 of the Agency Agreement provides that all of the cable and equipment for the SMATV System become the property of 373. Rates billed to tenants were determined by the Defendant Kurt in consultation with the Defendant Curt-Michael.

[ 38 ] Unknown to Bell, in response to a tenant complaint, the CRTC conducted an investigation with respect to the Accelerated SMATV System in 2001 and 2002 to determine whether its SMATV System adhered to all the criteria in the SMATV exemption Order which was outlined in CRTC Public Notice 2000-10 (now Public Notice 2002-35).

[ 39 ] In response to its queries, the CRTC was referred by 373 to its law firm. Although it is apparent there was somewhat less than a full response to the queries of the CRTC, the CRTC apparently did not pursue its investigation.

[ 40 ] It is noted the evidentiary record indicates that neither 373 nor its counsel advised the CRTC that the Accelerated/373 SMATV System was being used to retransmit Bell programming without the knowledge or consent of Bell and for the commercial profit of Accelerated and 373.

[ 41 ] The Defendants also allege a failure on the part of Bell to disclose an applicable limitation period on the Anton Piller motion. However, in my view, there was no such non-disclosure because all of the evidence establishes that the applicable limitation periods had not expired prior to the issuance of Bell’s Statement of Claim.

[ 42 ] When Industry Canada and Bell each took steps to investigate the Defendants named in the Anton Piller Order, the Defendants made misrepresentations to the investigators. The Defendant Kurt gave false information to Industry Canada in 2007 and the Defendant Curt-Michael gave false information to Bell in 2007 in the course of those investigations which resulted in no further steps being taken at that time.

[ 43 ] It was not until Bell learned on September 17, 2009, that a tenant in one of the Graydon Hall Apartments was actually receiving programming that would only be properly transmitted with Bell’s authorization that Bell had any reasonable basis for believing that it was possible Bell programming was being provided unlawfully to tenants of the Graydon Hall Apartments.

[ 44 ] In November 2009 and April 2010, Bell rented furnished suites at the Graydon Hall Apartments that included cable television and determined that television sets were connected to cable outlets but not connected to receivers. They noted that Channel 9 on the television, in listing channels available, referred to “Accelerated Digital Communications” across the top of the screen, and some 119 channels were available for viewing.

[ 45 ] Bell determined through tests conducted in the rented suites that the programming through the television was in fact Bell’s programming and that programming in the rented suites was being provided through the utilization of the receivers connected with the Defendant Curt-Michael’s residential subscriber account, via an unauthorized SMATV System at the Graydon Hall Apartments.

[ 46 ] The Defendant Curt-Michael had misrepresented to Bell in 2007 that all six active receivers obtained under a residential subscriber account were located at his supposed 33 Holly Street residence. Upon executing the Anton Piller Order, the receivers were discovered in the Server Room at the Graydon Hall Apartments. The Defendant Curt-Michael has now admitted that the receivers were never used in his residence.

[ 47 ] The 373 Defendants also argue that an adverse inference is to be drawn from the absence of evidence from or about communications with Bell’s internal legal counsel. The 373 Defendants’ argument in this regard is built upon pure speculation with no meaningful supporting relevant evidence.

[ 48 ] The Defendants allege that Bell failed to disclose that there was a CRTC exemption from licensing. All of the evidence on the return of the motions at hand suggests that there is no support to the Defendants’ position that CRTC exemptions from a licensing permit allow an apartment building owner to use Bell’s residential subscription accounts set up under false names or aliases and false addresses and retransmit the programming without Bell’s permission to tenants of the apartment building for commercial gain to the apartment building owner or otherwise.

[ 49 ] There was evidence as of September 27, 2011 that Asian Television Network International Limited (“ATN”) programming was being received by some tenants at the Graydon Hall Apartments. ATN programming could only be subscribed to via Bell.

[ 50 ] Indeed, the Defendant Curt-Michael admitted on his cross-examination that the only way Accelerated was able to supply ATN programming to tenants at the Graydon Hall Apartments was to subscribe to Bell for such programming. The Defendant Curt-Michael also admitted that his father, Kurt, was involved in determining the prices to be charged to tenants for programming and that he was aware of the programming being provided.

[ 51 ] In my view, Bell took its obligation to make fair and full disclosure seriously in moving for the Anton Piller Order, including disclosing all material facts within its knowledge that were not helpful to its case. There was no failure to disclose any material fact that would have resulted in the Anton Piller Order not being made.

[ 52 ] The Defendants have not advanced any argument that has any real merit in attacking the granting of the Anton Piller Order in the first instance and asking that it be set aside. The motion of Bell was fully supportable in granting the Anton Piller Order on January 28, 2011. All the evidence obtained pursuant to the Anton Piller Order reinforces the strength of Bell’s position in seeking the Order.

[ 53 ] In my view, and I so find, there is no rational basis to set aside the Anton Piller Order. There is no rational basis to exclude any of the evidence obtained pursuant to the Anton Piller Order. Evidence in the continuing civil proceeding that is relevant and would be discoverable is properly a part of the evidentiary record.

Disposition of the Defendants’ Motions to Set Aside the Anton Piller Order

[ 54 ] For the reasons given, the motions of the Defendants to set aside the Anton Piller Order are dismissed.

[ 55 ] If the parties cannot agree as to a disposition as to costs in respect of these motions, they may make written submissions. In such event, Bell shall make its submission within ten days, the Defendants have seven days to respond and Bell has three days for any reply submission.

The Defendants’ Motions for Summary Judgment

[ 56 ] The Defendants bring motions for an order:

• Dismissing those causes of action to which the Limitations Act, 2002 applies as a result of those causes of action having been commenced outside the prescribed limitation period; and

• Dismissing those causes of action founded in the Radiocommunication Act , as a result of those causes of action having been commenced outside the limitation period prescribed therein.

[ 57 ] The Court of Appeal has undertaken a comprehensive review of Rule 20 and the new test to be applied by a motion judge in deciding when to exercise the new powers through the 2010 amendments set forth in clause 2.1 of Rule 20. See Combined Air Mechanical Services v. Flesch, 2011 ONCA 764 , [2011] O.J. No. 5431 at paras. 38 , 39 and 50 (C.A.) The guiding consideration is whether the summary judgment process in the circumstances of the given case provides an adequate means for a fair and just resolution of the dispute. The ultimate question is whether a trial is required in the interests of justice. The motion judge must consider whether a full appreciation of the evidence and issues that is required to make dispositive findings is achievable by way of summary judgment or whether the required full appreciation is only achievable by way of a trial.

[ 58 ] As set forth in Combined Air , supra , at paras 54 and 55:

The point we are making is that a motion judge is required to assess whether the attributes of the trial process are necessary to enable him or her to fully appreciate the evidence and the issues posed by the case. In making this determination, the motion judge is to consider, for example, whether he or she can accurately weigh and draw inferences from the evidence without the benefit of the trial narrative, without the ability to hear the witnesses speak in their own words and without the assistance of counsel as the judge examines the record in chambers.

Thus, in deciding whether to use the powers in Rule 20.04(2.1), the motion judge must consider if this is a case where meeting the full appreciation test requires an opportunity to hear and observe witnesses, to have the evidence presented by way of a trial narrative, and to experience the fact-finding process first-hand. Unless full appreciation of the evidence and issues that is required to make dispositive findings is attainable on the motion record-as may be supplemented by the presentation of oral evidence under rule 20.04 (2.2) - the judge cannot be “satisfied” that the issues are appropriately resolved on a motion for summary judgment.

The Evidence

[ 59 ] The Statement of Claim was issued on January 24, 2011. Bell alleges the Defendants were contravening the Radiocommunication Act , breaching the Bell residential subscriber agreement, perpetrating a fraud against Bell, conspiring against Bell to deprive Bell of subscription revenues and converting Bell’s proprietary programming. The Defendants submit that Bell, by exercising reasonable diligence, ought to have discovered the conduct of the Defendants at an earlier time, in 2007.

[ 60 ] The relevant evidence on this issue has already been discussed above to some extent within the context of the Defendants’ motions to dismiss the Anton Piller Order.

[ 61 ] Bell’s residential subscriber agreement contains the terms and conditions upon which Bell grants a residential subscriber the right to receive and view Bell programming. The fraudulent use of receivers obtained via a residential subscriber agreement within an unauthorized SMATV System would, in my view, give rise to a statutory cause of action under the Radiocommunication Act and a cause of action in both contract and tort.

[ 62 ] The two-year limitation period under the Limitations Act, 2002 in respect of such causes of action in contract and tort does not begin to run until Bell, by the exercise of reasonable diligence, ought to have discovered the facts which give rise to those causes of action.

[ 63 ] However, the evidence establishes that some Defendants, in particular, the Defendants Kurt and Curt-Michael, concealed the unlawful conduct at issue by intentional misrepresentations made in 2007 in the course of investigations by Industry Canada and Bell into the suspected unlawful conduct of the Defendants. The only reasonable inference is that the misrepresentations made by the Defendants Kurt and Curt-Michael were designed to mislead the persons investigating the Defendants’ conduct in 2007 and prevent the investigators from discovering the existence of the unlawful activities of the Defendants through an unauthorized SMATV System.

[ 64 ] The evidence discloses that in March 2007 Bell learned that the Defendant Curt-Michael had contacted Mr. Prakash Naidoo of ATN with respect to the possibility of purchasing certain programming directly from ATN. The email itself was innocent on its face as it stated that “all the tenants have to do is buy the receivers and deal directly with Bell or Star Choice for the programming costs”. ATN provides its programming through Bell and Mr. Naidoo forwarded the email to Bell.

[ 65 ] Mr. Gow for Bell immediately attended at the Graydon Hall Apartments where he observed some satellite dishes located on the ground beside the building at 150 Graydon Hall Drive, which aroused suspicions. He contacted Industry Canada who would act to investigate possible breaches of the Radiocommunication Act. Mr. Lang of Industry Canada drove by 150 Graydon Hall Drive and observed the satellite dishes on the ground beside the building.

[ 66 ] Mr. Stephen Williams of Industry Canada then telephoned the property management office for the Graydon Hall Apartments and, in response to his questions, the woman who answered said she did not have knowledge about the satellite dishes “and the person who did was not present at the time” but there was no cable in the building and the person who was “responsible for the satellite dishes” would call him back.

[ 67 ] Three days later, April 16, 2007, Mr. Williams was called by an individual who identified himself as “Kurt Pieckenhagen” who said he was with the management company for the building. Mr. Williams was advised that the management company owned the satellite dishes on the roof (until then Mr. Williams had not known of satellite dishes on the roof) which provided encrypted signals of Bell and Star Choice to every apartment and the tenants were left to make their own arrangements with Bell or Star Choice for a receiver and descrambling card. Mr. Williams was told this was done so that the tenants would not install dishes on their balconies.

[ 68 ] Mr. Williams had often heard from other apartment building owners that they did not want dishes attached to their balconies. As a result of the representations of the Defendant Kurt to Mr. Williams, Industry Canada reported to Bell that what was being done at the Graydon Hall Apartments looked “reasonable”. Bell’s own review confirmed that there were, in fact, certain tenants of the Graydon Hall Apartments who were subscribing for Bell programming which was consistent with both the information from Industry Canada from the conversation with the Defendant Kurt and the contents of the Defendant Curt-Michael’s email to Nr. Naidoo. Neither Bell nor Industry Canada realized or were advised that “Kurt” in the telephone conversation and “Curt-Michael” in the email were two different people.

[ 69 ] None of the Industry Canada employees involved in the investigation of the Graydon Hall Apartments in 2007 knew that the Defendant Accelerated was supplying Bell programming to tenants at the Graydon Hall Apartments or that tenants were able to receive Bell programming without purchasing or activating a receiver and without making direct payment to Bell. The misrepresentation by the Defendant Kurt caused them to believe his “reasonable” explanation. The evidence now known about the Graydon Hall Apartments indicates that the statement of the Defendant Kurt to Industry Canada in 2007 was an intentional misrepresentation designed to mislead so that the unlawful activities of the Defendants would not be discovered.

[ 70 ] Bell has a receiver verification policy for servicing purposes which seeks to verify that receivers are properly located at the residential address in the residential subscriber agreement. Bell ensures that it is speaking with its customer at his/her residence and then causes a “location ID” to be displayed on the television screens to which the receivers are hooked up and the customer must read that information from the screens to the Bell representative on the phone.

[ 71 ] The Defendant Curt-Michael called Bell about April 11, 2007, advising as to problems with three of his receivers. When Bell attempted a verification as to location, the Defendant Curt-Michael hung up. In a subsequent call some 15 minutes later, the Defendant Curt-Michael advised he was using a cell phone and could not connect a landline to all six of his receivers. If customers advise they only use a cell phone, Bell permits this for verification purposes. However, unless a land line is used, it means Bell cannot tie the phone on which the customer is speaking to a residential address.

[ 72 ] Bell considered that the verification process was successful. Bell did not know that the receivers were in fact not at 33 Holly Street, the supposed address of the Defendant Curt-Michael in his residential subscriber agreement, but rather were located in the SMATV System Server Room at the Graydon Hall Apartments, as the Defendant Curt-Michael has now admitted on his examination. He was doing the verification by cell phone while hooking up each of the receivers, one at a time, to a television located in the Server Room.

[ 73 ] Bell was misled by the Defendant Curt-Michael’s fraudulent concealment from Bell during the verification process in 2007 as to the true location of the six active receivers on the one residential subscriber account in his name. He created the false impression that the receivers were located in his own residence. Moreover, the Defendant Curt-Michael intentionally concealed form Bell the fact he held several residential subscriber accounts with Bell through false names or aliases. It was not until September 17, 2009 that Bell had any real information or evidence which suggested that the Defendants were operating an unauthorized SMATV System at the Graydon Hall Apartments and retransmitting Bell programming to tenants.

[ 74 ] On September 17, 2009, Mr. Naidoo of ATN contacted Bell to advise a tenant at 100 Graydon Hall Drive had contacted him and said he was receiving eight channels of ATN programming from Accelerated and was interested in purchasing additional ATN channels.

[ 75 ] Bell then commenced a second investigation and, in November 2009, rented a furnished suite at 100 Graydon Hall that included “cable television”. As already discussed above in the context of the Defendants’ motion to set aside the Anton Piller Order, Bell conducted tests, determining that channels being offered in the apartment displayed Bell programming that was being provided through an unauthorized SMATV System in utilizing the Defendant Curt-Michael’s individual residential account receivers.

[ 76 ] Bell rented a furnished suite at 50 Graydon Hall Drive in April 2010 and tests determined that some 42 channels of Bell programming were available for viewing by residents. Investigators observing the Defendant Curt-Michael, coupled with searches of subscriber accounts, enabled Bell to determine on April 27, 2010 that seven more additional residential subscriber accounts were associated with the Defendants and utilized in the unauthorized SMATV System.

[ 77 ] Bell rented two additional furnished suites at 50 Graydon Hall in October 2010 and January 2011 and conducted further tests on the unauthorized SMATV System and the residential accounts used for that purpose.

[ 78 ] The fraudulent concealment of the Defendants’ conduct at issue in relation to the SMATV Scheme caused Bell to not discover the facts until after Bell commenced an investigation on September 27, 2009. Therefore, in my view, the evidence supports Bell’s position that the limitation period with respect to Bell’s non-statutory causes of action had not expired when the Statement of Claim was issued on January 24, 2011.

[ 79 ] The “full appreciation test” cannot be satisfied by the Defendants in the circumstances of the case at hand. The Defendants raise issues that call for multiple findings of fact and credibility on the basis of conflicting evidence in respect of a number of witnesses. The summary judgment motions cannot serve as an adequate substitute for a trial in ensuring a just result.

[ 80 ] I would add, as the evidence establishes that the conduct of the Defendants at issue was repeated on a continuing daily basis, in all events, there cannot be any such limitation issue for the two-year period prior to January 24, 2011.

[ 81 ] With the execution of the Anton Piller Order on February 1, 2011 Bell gained access to the Server Room underneath 50 Graydon Hall Drive, found the unauthorized, physical SMATV System and determined that all the receivers previously identified as being used for that purpose were being used to redistribute Bell programming to tenants of the three Graydon Hall Apartments from the discovered Server Room. Considerable documentary evidence relating to the unauthorized SMATV System was also identified through the execution of the Anton Piller Order.

[ 82 ] The test on a motion for summary judgment under Rule 20.04(2) is whether the Court is satisfied “there is no genuine issue requiring a trial with respect to a claim or defence”. Clause 2.1 of the Rules authorizes the Court to weigh evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence when determining whether there is a genuine issue requiring trial “unless it is in the interest of justice for such powers to be exercised only at a trial”. The legal or persuasive burden is upon the moving party to satisfy the Court that there is no genuine issue requiring a trial.

[ 83 ] This is a case of multiple factual issues involving conflicting evidence from a number of witnesses and a voluminous evidentiary record. A summary judgment motion simply does not serve as an adequate substitute for the trial process.

[ 84 ] The Defendants’ motions for summary judgment involve essential credibility determinations, issues as to different limitation periods applying to different causes of action (which are dependent on disputed facts), disputed law on these issues, contradictory evidence by seven witnesses, six motion records of some 1,254 pages, the transcripts from the Rule 39 examinations of two former Bell employees, of three present and former employees of Industry Canada, the cross-examinations over two days each of the Defendant Curt-Michael and the main Bell investigator, Wayne Gow, some 76 exhibits from the examinations and cross-examinations, some 613 pages of information provided by way of answers to undertakings and questions taken under advisement and lengthy facta. The normal production of documents and oral examinations for discovery needs to take place before any determination of the issues raised in this action. The “full appreciation test” requires a trial.

[ 85 ] In my view, it would have been appropriate for Bell to have brought a motion for a stay or dismissal of the summary judgment motions under the recent jurisprudence as to when a party is faced with a premature or inappropriate summary judgment motion. George Weston Limited v. Domtar Inc. , 2012 ONSC 5001 at para. 94 (S.C.J.).

The Test for Determining when the Limitation Period provided for in s. 18(5) of the Radiocommunication Act has expired.

[ 86 ] Subsections 18(1) and (5) of the Radiocommunication Act allows Bell to commence an action in respect of a loss or damages as the result of conduct that is contrary to sections 9(1) (c), (d), (e) and 10 (1)(b) within three years “after the conduct giving rise to the action was engaged in”.

[ 87 ] The evidence establishes that the alleged unlawful conduct of the Defendants was engaged in on a continuing basis up to, at least, February 1, 2011, the date of execution of the Anton Piller Order. The Defendants assert the three year limitation period runs from the first day when the unlawful conduct was engaged in. If this interpretation is correct, then a defendant who fraudulently conceals unlawful activity for three years from its commencement can then openly engage in such activity with impunity for an ongoing indefinite time period.

[ 88 ] The purpose of s. 18(1) is to provide civil remedies for breaches of the Radiocommunication Act. In my view, the Defendants’ asserted interpretation makes no sense given the purpose of the legislation.

[ 89 ] The Defendants rely upon Garford Pty Ltd. v. Dywidag Systems International Canada Ltd. , 2010 FC 996 , [2010] F.C.J. No. 1259 which dealt with the limitation period under s. 36 (1)(a) of the Competition Act, R.S. 1995 , c. C-34.

[ 90 ] The wording of the limitation period in the two statutes is different. As well, the impugned conduct in the Garford case was the entering into of three purchase agreements which were alleged conspiracies contrary to s. 45(1) of the Competition Act , which event was found to relate to a specific date.

[ 91 ] The Defendants have not provided any authority which holds that the discoverability principle does not apply to the limitation period provided for under s. 18 (5) of the Radiocommunication Act .

[ 92 ] In my view, the better view is that the discoverability principle is inherent to the operation of the limitation period in s. 18 (5) of the Radiocommunication Act. This interpretation accords with the purpose of that legislation in affording civil remedies to a person aggrieved because of a breach of its provisions. This interpretation has particular force in a situation of fraudulent concealment of the breach of the Radiocommunication Act , as arguably seen in the case at hand.

[ 93 ] Applying the discoverability principle, the evidentiary record suggests the breach of the provisions of the Radiocommunication Act were not reasonably discoverable by Bell until at least September 2009.

What is the Test for Determining When the Causes of Actions Pleaded were “Discovered” within the Meaning of the Limitations Act, 2002 ?

[ 94 ] Section 4 of the Limitations Act, 2002 establishes a basic limitation period of two years after the day on which the claim “was discovered”. Section 5 refers to discovery of a claim or cause of action as follows:

5(1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damages had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the claim first ought to have known of the matters referred to in clause (a).

[ 95 ] Once a plaintiff knows that some damage has occurred and has identified the wrongdoer, the cause of action has accrued. Peixeiro v. Haberman, [1997] S.C.R. No. 31 at para. 18 (S.C.C.). In the situation at hand, Bell did not know in 2007 that any injury or damage had occurred or that any of the Defendants were arguably in breach of contract (residential subscriber agreements), were tortfeasors (given the misappropriation of Bell’s programming), or were in breach of the Radiocommunication Act , that is, until after Bell conducted its investigation which commenced in September 2009.

[ 96 ] The Defendants submit that Bell, by exercising reasonable diligence, ought to have discovered the wrongdoing of the Defendants earlier, in 2007, notwithstanding that the wrongful conduct at issue was being intentionally and fraudulently concealed by the Defendants.

[ 97 ] Where there has been a fraudulent concealment of the evidence of a cause of action, the limitation period will not commence until the plaintiff discovers the fraud, or until the time when, with reasonable diligence, the plaintiff ought to have discovered it. Whether or not there was fraudulent concealment is a factual dispute. A factual determination is required and that should be left to the determination of the trier of fact at trial in the case at hand.

[ 98 ] I emphasize that the evidence to date in this case suggests strongly that there was fraudulent concealment by the Defendants such that Bell could not, and did not, discover by reasonable diligence the wrongdoing of the Defendants until after Bell commenced its investigation on September 27, 2009. Based upon the circumstances surrounding the information that Bell received from Mr. Naidoo, from the Defendant Kurt via Industry Canada, and from the Defendant Curt-Michael in 2007, on an objective analysis, in my view, it cannot be said that Bell did not act with reasonable diligence in attempting to determine whether there was some wrongful activity being carried out at the Graydon Hall Apartments, or in concluding at that time that there was not any such wrongful activity.

[ 99 ] The determination as to whether Bell commenced its action within the applicable limitation periods is not an issue which involves discrete uncontested facts or is largely driven by documents. The determination of the issue must be based upon testimonial evidence regarding multiple complex, contentious factual issues. There is considerable conflicting evidence to date. The Defendants cannot satisfy the “full appreciation” test.

[ 100 ] The central issue relating to the limitation periods involves a determination as to when Bell discovered or, ought by reasonable diligence, to have discovered its causes of action. This in turn involves the question whether the Defendants fraudulently concealed their wrongful conduct and whether such fraudulent concealment impacted upon the issue as to the running of the limitation period.

[ 101 ] These factual issues involve questions of credibility and conflicting evidence such as to call for a fully developed trial record.

[ 102 ] The Defendants have not nearly met the burden upon them as the moving parties to establish to the satisfaction of the Court that there is no genuine issue requiring a trial. In my view, and I so find, the Defendants have not, and cannot given the record to date, establish that there is no genuine issue requiring a trial in connection with their submission that the action is barred because of the operation of any statutory limitation of actions provisions.

Disposition

[ 103 ] For the reasons given, the Defendants’ summary judgment motions are dismissed.

[ 104 ] If the parties cannot agree as to the disposition of the matter of costs they may make written submissions. In such event, Bell shall provide its submission within ten days, the Defendants shall provide their responding submission within seven days thereafter and Bell then shall provide any reply within three days.

CUMMING J.

Date: October 29, 2012