ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-09-392911
DATE: 20130201
BETWEEN:
IMAX CORPORATION
Plaintiff
– and –
TROTUM SYSTEMS INC., SUNWAY DIGITAL INC., JOHN GREGORY BLAIR, GARY TSUI (aka GARY CUI, aka XIAOYU CUI, aka JOHN TROY), YOUNG GHI HONG, JIANGSU SUNWAY DIGITAL INC., JIANGSU SUNWAY DIGITAL FILM AND TELEVISION CO. LTD., ALLAN QIANG (aka JOHN A NAN, aka QUANG ANAN), A CORPORATION OR ENTITY CARRYING ON BUSINESS AS DMAX, A CORPORATION OR ENTITY CARRYING ON BUSINESS AS SHANGYANG, A CORPORATION OR ENTITY CARRYING ON BUSINESS AS SHANGRUI, A CORPORATION OR ENTITY CARRYING ON BUSINESS AS DAIYI, A CORPORATION OR ENTITY CARRYING ON BUSINESS AS CUBIC PICTURES
Defendants
Sarit E. Batner and Moya J. Graham, for the Plaintiff
No one appearing for the Defendants, Gary Tsui (aka Gary Cui, aka Xiaoyu Cui, aka John Troy and Trotum Systems Inc.
HEARD: January 29, 2013
T. Mcewen j.
reasons for decision
[1] The plaintiff, IMAX Corporation (“IMAX”) brings this motion seeking an order for contempt against the defendants, Gary Tsui (aka Gary Cui, aka Xiaoyu Cui, aka John Troy) (“Tsui”) and Trotum Systems Inc. (“Trotum”) with respect to their failure to comply with the Orders of Belobaba J. dated December 22, 2009 and Pollak J. dated July 11, 2012 along with other ancillary relief including a fine and incarceration.
[2] This action arises out of serious allegations made by IMAX against Tsui, Trotum and the other defendants with respect to Tsui, a long standing ex-IMAX employee, leaving IMAX under suspicious circumstances, taking confidential and propriety IMAX information and thereafter using that information to compete with IMAX.
[3] As a result of the allegations IMAX obtained the aforementioned Order from Belobaba J. which, amongst other things, ordered that Tsui cease breaching his non-competition covenants with IMAX; cease his competitive work with a Chinese company; return IMAX’s confidential and propriety information; and produce for inspection anything he created on the basis of IMAX information.
[4] Aside from the payment of costs, Tsui has not honoured any part of the Order.
[5] Thereafter, IMAX obtained an Anton Piller Order from Campbell J. which was executed in July of 2012. On July 11, 2012 Pollak J. ordered that Tsui attend a mediation and examination on his own behalf and on behalf of Trotum on August 12, 2012. Tsui did not attend either the mediation or the examination, nor did he move to set aside the Order or make himself available.
[6] The evidence adduced by IMAX also discloses that Tsui has repeatedly travelled to China to evade the jurisdiction of this Court and continues to compete against IMAX, particularly with respect to contracts he has apparently secured in China which are of significance.
[7] The record clearly discloses that Tsui, and through him, Trotum are in contempt of the Orders of Belobaba J. and Pollak J. beyond a reasonable doubt. He has made no effort whatsoever to comply.
[8] This matter first came before me on December 17, 2012. At that time, given the severe sanctions sought by IMAX, I advised that I would give Tsui and Trotum one last chance to appear and/or comply with the aforementioned Orders of Belobaba J. and Pollak J. The motion was adjourned to January 29, 2013. In the interim I ordered IMAX to serve a copy of my Endorsement upon Tsui and Trotum by several different means to ensure that they were made aware of the return of the contempt motion and the fact that I would hear submissions on contempt and penalty, including incarceration.
[9] IMAX has properly served Tsui and Trotum in accordance with my Order. It further appears clear that Tsui has received notice of the return of the motion given the subsequent steps that he has taken to deliver a Notice of Intention to Act in Person and by Trotum’s withdrawal of its Statement of Claim. Tsui’s former solicitor advised IMAX’s counsel yesterday that he would not be attending today although technically he remains as solicitor of record for Trotum, notwithstanding the withdrawal of its defence.
[10] In the above circumstances, I agree with counsel for IMAX that not only should the motion proceed with respect to the issue of contempt, but also with respect to penalty.
[11] As noted, Tsui and Trotum are in contempt of the aforementioned Orders. The contempt is serious. I agree with counsel for IMAX that there are no mitigating factors. The contempt is also deliberate and part of an ongoing pattern of defiance and disregard for the processes of this Court. This includes wilful attempts to avoid the consequences of the injunction, including the destruction of evidence. As a result, I agree with counsel for IMAX that a sanction on the high end of the spectrum is required to end or deter such behaviour, and to attempt to remedy the harm done to IMAX.
[12] In the circumstances of this case I agree that a fine in the high end of the range is reasonable and further that an Order for a Warrant of Committal is also appropriate if Tsui fails to comply with this order. In coming to these conclusions, I have extensively reviewed the case law provided by counsel for IMAX: Neighbourhoods of Windfields Limited Partnership v. Death, [2010] O.J. No. 1304 (Sup. Ct.); Chiang (Trustee of) v. Chiang, 2009 ONCA 3, [2009] O.J. No. 41 (C.A.); Sussex Group Ltd. v. 3933938 Canada Inc. (c.o.b. Global Export Consulting), 2003 49334 (ON SC), [2003] O.J. No. 2952 (Sup. Ct.); iTrade Finances Inc. v. Webworx Inc., [2005] O.J. No. 3492 (Sup. Ct.); and Sweda Farms Ltd. (c.o.b.) Best Choice Eggs) v. Ontario Egg Producers, [2001] O.J. No. 3482 (Sup. Ct.).
[13] I therefore order as follows:
- Tsui is in contempt of the Order of the Honourable Mr. Justice Belobaba, dated December 22, 2009;
- Tsui and Trotum are in contempt of the Order of the Honourable Madam Justice Pollak, dated July 11, 2012;
- Tsui shall forthwith comply with the terms of the Order of the Honourable Mr. Justice Belobaba dated December 22, 2009;
- Tsui and Trotum shall attend for examination for discovery by the Plaintiff within 90 days of the date hereof;
- The Statement of Defence of Tsui shall be and is hereby struck;
- Tsui shall pay a fine of $50,000 within 30 days of the date hereof;
- If Tsui fails to comply with this Order within 60 days a Warrant of Committal shall be issued for a period of incarceration of 60 days; and
- Tsui and Trotum shall, within 30 days, pay to IMAX its costs of the motion on a full indemnity basis in the amount of $35,063.21 inclusive.
[14] Based on the aforementioned egregious behaviour it is my opinion that costs on a full indemnity basis are warranted: Royal Bank of Canada v. Yates Holdings Inc., 2008 ONCA 474.
[15] An Order shall therefore go as per the draft provided to me by counsel, as amended, and signed by me. IMAX is to provide Tsui and Trotum with a copy of the Order and the Reasons for Decision by way of service in the same manner as my previous Order of December 17, 2012 forthwith.
[16] Lastly, if Tsui fails to comply with this Order the plaintiff may make arrangements through the Motions Office to have me issue a Warrant of Committal on any day which I am scheduled to hear motions.
T. McEwen J.
Released: February 1, 2013
COURT FILE NO.: CV-09-392911
DATE: 20130201
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
IMAX CORPORATION
Plaintiff
– and –
TROTUM SYSTEMS INC., SUNWAY DIGITAL INC., JOHN GREGORY BLAIR, GARY TSUI (aka GARY CUI, aka XIAOYU CUI, aka JOHN TROY), YOUNG GHI HONG, JIANGSU SUNWAY DIGITAL INC., JIANGSU SUNWAY DIGITAL FILM AND TELEVISION CO. LTD., ALLAN QIANG (aka JOHN A NAN, aka QUANG ANAN), A CORPORATION OR ENTITY CARRYING ON BUSINESS AS DMAX, A CORPORATION OR ENTITY CARRYING ON BUSINESS AS SHANGYANG, A CORPORATION OR ENTITY CARRYING ON BUSINESS AS SHANGRUI, A CORPORATION OR ENTITY CARRYING ON BUSINESS AS DAIYI, A CORPORATION OR ENTITY CARRYING ON BUSINESS AS CUBIC PICTURES
Defendants
REASONS FOR DECISION
T. McEwen J.
Released: February 1, 2013