In an unusual, but not unexpected turn of events, the Federal
Court of Canada recently ordered that the officer and director of a
party who failed to comply with a contempt order be imprisoned
until all amounts owing under orders of the Court are paid.
In November 2013, Justice Manson held the Respondent in
Trans-High Corporation v Hightimes Smokeshop and Gifts Inc
had infringed the Applicant's trademark "HIGH TIMES"
by operating a store as "High Times Smokeshop and Gifts",
and using "HIGH TIMES" in a font similar to the
Applicant's on signage. He ordered the Respondent to pay
$25,000 in damages and $30,000 in costs, in part because of the
Respondent's wilful infringement and failure to participate in
or acknowledge the proceedings (
see here for an analysis of the judgment). Despite awareness of
the judgment, which enjoined the Respondent from using the
Applicant's trademark, the Respondent continued to use the mark
and paid none of the monies owing under the judgment.
Earlier this year, after much negotiation and leniency on the
part of the Applicant regarding payment of the outstanding funds,
it sought a contempt order. The Respondent and
its officer and director pleaded guilty, and were ordered to pay
the costs of the motion and contempt hearing, a fine, and the
original sum owing under Justice Manson's judgment. Despite
acknowledgement of the contempt order by the Respondent, no payment
Recently, the Applicant brought an ex parte motion for
enforcement of the contempt order,
specifically seeking that the officer and director of the
Respondent be imprisoned pursuant to Rule 472 of the Federal
Courts Rules until he complies and pays the monies owed under
the Court's orders.
Justice Fothergill observed that while "a person who is
ordered by a court to pay money to another cannot be imprisoned for
contempt if he or she is unable to pay the debt", as
"debtors' prison... is a Dickensian concept that in
civilized countries has largely been abolished", the Supreme
Court of Canada has held that a person may be imprisoned for
contempt where he demonstrates an intention to dodge his
commitments (e.g. having the ability to pay a debt but refusing to
In view of the goals of ensuring compliance with court orders
and maintaining public confidence in the administration of justice,
Justice Fothergill granted the motion for a warrant of committal.
He concluded that the officer and director "is not subject to
imprisonment as a result of the unpaid debt, but rather for his
deliberate refusal to comply with the Contempt Order despite his
ability to do so." The Respondent presently owes the Applicant
in excess of $170,000.
While the Federal Court1 has ordered, and the Federal
Court of Appeal2 has upheld, jail sentences for breaches
of intellectual property judgments, such sentences for contempt are
A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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