On the Wrong Side of the Law: Defendant Who Ignored Court Order to be Sentenced for Contempt

The Supreme Court of British Columbia recently found an individual in contempt for breaching confidentiality obligations and for failing to pay a judgment.

XY, Inc. owns the rights technology used as a means of producing calves of a desired sex. In 2012, the Supreme Court of British Columbia issued a judgment in favour of XY, Inc. against multiple defendants for breach of a license agreement relating to the use of the patented technology. The Court awarded damages of approximately $8.5 million for deceit and breach of confidence and the Court’s Order restrained the defendants from using any of XY, Inc.’s confidential information “for any purpose or to any extent.” (That trial decision can be found here.)

Recently, the Court held one of the defendants, Mr. Jesse Zhu, to be in contempt of that Order. Evidence obtained through execution of an Anton Piller order and from deposed employees established that Mr. Zhu’s companies continued to use XY’s technology without permission and that the companies actively sought to conceal their activities.

Mr. Zhu had also not paid any part of the judgment. While impecuniosity can be an excuse for non-payment, there was no evidence that raised a reasonable doubt about his ability to pay.

The Court thus found beyond a reasonable doubt that Mr. Zhu was in contempt of the 2012 Order. As civil contempt proceedings are quasi-criminal in nature, the Court ordered that the matter be set down for sentencing.

A copy of the Court’s decision can be found here.