Ultimately won suit, but dinged $99K for contempt

Coke said man was unlawfully dealing in its wares

When we discuss contempt of court in Canadian Employment Law Today, it’s usually in the union context, as where strikers are accused of breaching a court order not to interfere with those coming in and out of a business. But of course there are other workplace breaches of court orders that attract the contempt sanction.

Recently, for example, the Federal Court found that, during a 16-month period, Musadiq Pardhan directly and blatantly violated a court order prohibiting him from unauthorized dealings with Coca-Cola products. While admitting that Federal Court Rules set a maximum fine of $5,000, Coca-Cola argued that the contempt fine against Pardhan should total $105,300.

Coca-Cola based this figure on Pardhan’s estimated average profit of $2,700 on each of the 39 shipments that violated the order.

Coca-Cola argued that it made no sense to view separate violations of the order as a single contempt.

Pardhan had an equally significant problem with the costs order. As the successful party, Coca-Cola was entitled to look to Pardhan for the majority of its legal costs, which it put at $125,000 plus expenses of $100,000, including the cost of private investigators.

Pardhan argued that the costs order should reflect the fact that he had offered to settle for $4,000 plus Coca-Cola’s party-party costs.

Significantly, Coca-Cola’s lawsuit against Pardhan ultimately was dismissed and the injunction dissolved.

The court has fined Pardhan $4,000 and ordered him to pay Coca-Cola’s costs at $80,000 plus $15,000 it paid to investigators. The court has found that it was inappropriate to imprison Pardhan for conduct that would have been legal but for the court order.

For penalty purposes, it also has ruled that there was a single contempt.

The document ordering Pardhan to show cause why he should not be held in contempt was cast in general terms, the court said, without dates or quantities. Submissions by Coca-Cola giving particulars of 136 shipments did not change this, the court added.

The fine suggested by Coca-Cola ran counter to the plain meaning of Federal Court Rule 355(2), the court has ruled, with its maximum fine of $5,000 for disobeying orders.

Here, there was a single order directly linked to a single injunction cast in general terms. The dismissal of Coca-Cola’s action and the dissolution of the injunction were principal mitigating factors in Pardhan’s favour.

As to costs, while Coca-Cola assisted the court in protecting the integrity of its order, the court remarks that it also had a private interest in protecting its trademarks.

The costs order should not result in undue punishment, the court has found, particularly where the court ultimately ruled that the order Pardhan violated could not be sustained.

For more information:

Coca-Cola Ltd. v. Pardhan, FCTD file T-2685-95, Jan. 20/2000.

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