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To: David Pickering who wrote (4432)7/13/1998 2:40:00 PM
From: Ross Mickey  Read Replies (2) | Respond to of 6467
 
Trooper successful in application against Thermo Tech

Trooper Technologies Inc TPP
Shares issued 18,120,364 Jul 10 close $1.94
Mon 13 Jul 98 News Release
Also Thermo Tech Technologies Inc (TTRIF)
Mr. Stan Lis reports
Trooper has been wholly successful in its application in the Supreme Court
to have Thermo Tech Technologies and Thermo Tech Waste Systems found guilty
of wilful contempt of court and punished.
In reasons for judgment handed down on Friday, July 10, 1999, the
Honourable Mr. Justice Cohen found Thermo Tech to be in contempt of court
and rejected the arguments advanced by Thermo Tech that it had fully
complied with his lordship's earlier order requiring delivery of all
standard certified engineering specifications, including drawings,
regarding thermophilic plants, to Trooper. His lordship noted that Thermo
Tech had resisted delivery of the materials sought by the company by
raising different defences and positions, which defences and positions have
now all been rejected by the court.
Mr. Justice Cohen found that the evidence was overwhelmingly conclusive and
that, beyond a reasonable doubt, Thermo Tech was in contempt and should be
subjected to a substantial fine as punishment. His lordship imposed a fine
of $25,000 against each of the Thermo Tech companies with payment suspended
for one week on the condition that within that time Thermo Tech comply with
the original order. In addition, Trooper was awarded special costs against
Thermo Tech.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com



To: David Pickering who wrote (4432)7/14/1998 1:25:00 AM
From: Clement  Respond to of 6467
 
Court Ruling. Part One of Three

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Date: 19980710
Docket: C976669
Registry: Vancouver

IN THE SUPREME COURT OF BRITISH COLUMBIA

BETWEEN:

TROOPER TECHNOLOGIES INC.,
INTERNATIONAL ECO-WASTE SYSTEMS S. A.
PLAINTIFFS

AND:

THERMO TECH TECHNOLOGIES INC.,
THERMO TECH WASTE SYSTEMS INC.,
LOCKERBIE & HOLE LTD. AND LOCKERBIE THERMO TECH INC.
DEFENDANTS

RULING OF THE HONOURABLE MR. JUSTICE COHEN

Counsel for the plaintiff:
D. Lunny
J. A. Dawson

Counsel for the Defendant:
E. E. Bowes

Date and Place of Hearing:
June 19, 1998
Vancouver, B.C.

[1] My Order dated January 20, 1996 (the "Order") provides, inter alia, as follows:

THIS COURT FURTHER ORDERS that all standard
certified engineering specifications, including
drawings, regarding thermophilic plants in the
possession or control of the Defendants, Thermo Tech
Technologies Inc. and Thermo Tech Waste Systems Znc.,
be delivered to the Plaintiffs forthwith;

THIS COURT FURTHER ORDERS that the Application
of the Plaintiffs under Rule 18 of the Rules of Court
far the delivery up of all environmental assessment
reports regarding thermophilic plants, all cost
assessment reports regarding thermophilic plants and
all documentation regarding the specifications and
sourcing of the equipment used in the construction of
thermophilic plants in the possession or control of
the Defendants, Thermo Tech Technologies Inc. and
Thermo Tech Waste Systems Inc., be and is hereby
dismissed;

[2] The plaintiffs apply pursuant to Rule 56 for the imposition of punishment for contempt of court of the defendants for their failure to comply with the order, and that they deliver forthwith to the plaintiffs all standard certified engineering specifications, including drawings, regarding thermophilic plants in their possession or control.

[3] The defence position is that the delivery to the plaintiffs by the defendants of the Design Criteria Manual ("Manual") on March 11, 1998 fully satisfied the requirements of the Order.

[4] The plaintiffs' position is that the purported compliance was anything but; that the defendants remain in contempt; and that punishment must be imposed with the object of ensuring full and complete compliance.

[5] The plaintiffs ask the court to impose a fine against each of the Thermo Tech companies in the amount of $50,000 each for their willful contempt prior to March 11th. They also ask for the further imposition of a fine against each Thermo Tech company in the amount at $250,000 with this fine suspended for a period of one week on the condition that the defendants within that time deliver to the plaintiffs the materials required by the Order,

[6] The issues before the court are:

(i) Are the defendants in contempt of court?

(ii) If so, what is the appropriate punishment?

[7] It is common ground that contempt of court is an offence of a criminal character. "A man may be sent to prison for it. It must be satisfactorily proved. To use the time-honoured phrase, it must be proved beyond a reasonable doubt." See Re: Bramblevale, Ltd., [1969] 3 All E.R. 1062 at 1063.

[8] The question underlying this application is whether the defendants have delivered "all standard certified engineering: specifications, including drawings regarding thermophilic plants" in their possession. To address this question, the defendants relied upon the affidavits of Mr Daniel Cumming, a director of the defendant Thermo Tech Technologies Inc., and Mr. Ross Lewis, an engineer.

[9] Mr. Cumming, in his affidavit sworn March 12, 1998, deposed that on March l0th the defendants instructed their engineers to deliver all standard certified engineering specifications and drawings to their counsel for immediate delivery to p1aintiffs' counsel pursuant to the terms of the Order and that this documentation was delivered by courier to plaintiffs' counsel on March 11th.

[10] In his second affidavit, sworn May 15, 1998, Mr. Cumming deposed, inter alia, as follows:

4. That by latter dated May 8, 1998 I was advised
by my Patent Attorney, Roland Joachim, of Riches,
McKenzie and Herbert that the Patent Application I
filed August 26, 1995, together with Rene Branconnier
and Robert Jackman, had bean approved for issuance by
the United States Patent Office.

...

6. That the new patent is in respect of a new
process for Thermophilic Aerobic Fermentation of
Organic Waste and discloses a new process which is
quite distinct (and therefore patentable) from the
Process defined in the 1992 Eastern Europe License
Agreement.

7. That this process is in no way an improvement of
the patents specified in the Eastern European License
Agreement (as the term "Improvements" is defined in
the Eastern European License Agreement) and, in fact,
relates to an entirely new process for Thermophilic
Aerobic Fermentation of Organic Waste.

8. That the acceptance of this new patent for
issuance by the U.S. Patent Office, is proof that the
new Thermophilic Aerobic Process which was developed
at the Corinth Plant, and was further developed at
the Brampton and Hamilton Plants is a totally
new patented process that is not in any
way covered by the "Process" referred to in the 1992
Eastern European License Agreement.

10. That I verily believe the approval of this new
U.S. Patent Application effectively determines that
the Licensee under the 1992 Eastern European License
Agreement is not entitled to any engineering
specifications or know-how which relate to the new
process now approved for a patent in 1998 by the U.S.
Patent Office.

11. That the approval for issuance of this new U.S.
Patent fully corroborates the view I expressed in my
Affidavit of March 12, 1998, that there are no other
documents, specifications or drawings that fall
within the scope of the Order of Mr. Justice Cohen
that have not already been delivered to the
Plaintiffs.

12. That the Company has recently been referring to
the new technology, flow approved for U.S. patent, and
the plants in which it is used, as the "new
generation Thermo MasterTM Plants."

13. That references in the U.S. Securities and
Exchange Commission filing for the year ended April
30, 1997 are to the new generation Thermo MasterTM
Plants now covered by this newly approved Patent.

14. That the Dick Engineering Drawings referred to
in the 1997 S.E.C. filing and in the recent Company's
Executive Summary (both quoted by Mr, Justice Cohen),
are drawings that specifically relate to the new
process now approved for patent by the U.S. Patent
Office and not to any Plant utilizing the "Process"
referred to in the l992 Eastern European License
Agreement.

15. That the "engineering design program" referred
to in the Company's Executive Summary under the
heading "Development of the Thermo Master Plant,"
refers to the development of the new generation plant
which uses the Process now approved for Patent in the
U.S.

16. That the references in the Company's news
Release dated January 12, 1998, to "design drawings
by Dick Engineering," are exclusively references to
the new generation Process now approved for patent in
the U.S. This new Process is referred to as "state
of the art" and "third generation design" in this
News Release.

[11] The plaintiffs submit that I should accord little, if any, weight to Mr. Cumming's evidence. I agree for the reasons that follow.

[12] By way of background. paragraphs 9, 10 and 19 of the Statement of Defence provide as follows:

9. Throughout all relevant periods of time, the
Defendants, and each of them, in their
communication with the Plaintiffs, have advised
them that the Plant technology is currently
undergoing re-design and re-engineering to
address environmental concerns and further, that
it is the policy of Waste Systems Inc. and
Thermo Tech Inc. to ensure its procedures and
Systems relating to its Process are updated and
made as ecologically sound as possible.

10. The Defendants, and each of them, have therefore
advised the Plaintiff that the re-engineering
drawings are currently being prepared with all
possible speed, however, they are not yet
available for delivery to the plaintiff.

19. In further answer to the whole of the Statement
of Claim herein, the Defendants, and each of
them, state that certified Engineering
specifications and drawings will be provided to
the Plaintiffs as soon as the engineering
drawings and specifications have been completed
and as soon as the Plaintiffs can satisfy the
Defendants as in the economic viability of the
proposed Plants in Poland and that the
Plaintiffs will in fact comply with all the
Licensee's Covenants given in the Licensing
Agreement.

[13] In his affidavit sworn January 13, 1998, Mr. Rene Branconnier, President of the defendants, deposed that he had read the Statement of Defense and specifically confirmed the accuracy and truth of s 1 through 21. He also deposed that at the date of the Eastern European agreement ("License Agreement"), all that was in existence was a design criteria manual prepared by Stothert Eng. and that this manual was the starting point for the re-design and re-engineering then underway. He further deposed that the re-engineering, re-design and upgrading of the process was currently ongoing with Dick Engineering of Toronto providing the necessary engineering expertise and that the present re-engineering and re- design process was not yet completed. Nor were the re-engineering drawings and specification completed, nor were they currently completed to the degree where any drawings or specifications could be release to the plaintiffs.

[14] Mr. James D. Hole, President of Lockerbie & Hole Ltd., and the President of Lockerbie Thermo Tech Inc., in his affidavit sworn January 13, 1998, deposed that his firm had received the request from time to time from the plaintiffs for certified engineering specifications and engineering reports and that on each occasion the plaintiffs were accurately advised that the re-design and re-engineering had not been completed and the certified engineering specification, drawings and reports were not yet available. He also deposed that he had been advised by Mr. Branconnier that as soon as the re-design and re-engineered drawings, specifications and reports could be completed, and as soon as the plaintiffs fulfilled certain conditions, all of the required engineering specifications, drawings and reports would be immediately delivered to the defendants.

[15] Finally; in his affidavit sworn January 16, 1998, Mr. Branconnier deposed that the Thermo Master Process had remained essentially unchanged since the first decision was taken to process on a commercial scale with the development of Thermo Master Plants and the process which was contracted to be provided to the plaintiffs pursuant to the License Agreement had been fully and completely satisfied . He also deposed that the Thermo Master process had remained essentially unchanged since the decision was taken to proceed to commercial scale with this process. He deposed further that the Corinth, Brampton and Hamilton plants were all constructed pursuant to the design criteria manual prepared by Stothert Engineering.

[16] Returning the to Mr. Cumming's evidence, I agree with plaintiffs' counsel's submission that the statement in Mr. Cumming's March 12th affidavit that the defendants instructed its "engineers" to deliver all standard engineering specifications and drawings in misleading. Only Stothert Engineering, a firm of engineers recently engaged by the defendants to update the Manual, were so instructed, not the firms who had worked for the defendants over the past several years. During cross-examination of Mr. Cumming on this point he testified, as follows:

Q All right. And on March 10th, you instructed --.
And it's on March 10th, 1998, -- 23 --
that's when you instructed your engineers to
deliver all standard certified engineering
specifications and drawings to your counsel; is
that right? That's what it says?

A Yes. After having completed some other
proceedings prior to that, yes.

Q All right. Which engineers?

A The engineers that we asked to do this, it was
Stothert Engineering.

Q Did you instructed Stanley Engineering to deliver
all standard certified engineering specifications
and drawings?

A No, sir. Because Stanley had not been party to
this.

Q Did you instruct Dick Engineering to deliver all
standard certified engineering specifications and
drawings?

A No, sir. For the same reason.

Q Did you instruct Lockerbie & Hole, the other
defendants, to deliver all standard certified
engineering specifications and drawings?

A We did not.

Q Did you instruct anybody other than Stothert
Engineering to deliver these drawings, these
standard certified engineering specifications and
drawings?

A To my knowledge, no, sir, we did not.



To: David Pickering who wrote (4432)7/14/1998 1:26:00 AM
From: Clement  Respond to of 6467
 
Court Ruling. Part Two of Three

*** *** *** *** *** *** *** *** *** *** ***

[17] Plaintiffs counsel argued that one of the key admissions of the noncompliance with the Order is contained in the following evidence from Mr. Cumming's cross-examination:

Q All right. Regarding thermophilic plants?

A Regarding the Thermo Master TM Mark II plant,
yes, sir, we do.

Q Is that a thermophilic plant?

A It is a Thermo Master TM Mark II plant.

Q Is the Thermo Master TM Mark II plant a
thermophilic plant?

A It is a comprehensive package of technologies
that we market under that term, in which we
conduct a form of thermophilic processing.

Q Which means it's a thermophilic plant, isn't it?

A If that's what you wish to describe it as, you
may do so. We describe it very specifically for
very specific reasons, which I also have filed an
affidavit to explain.

Q And we'll get to your other affidavit in a
moment.

A Fine. I'm sure.

Q Okay. So if I may call a thermophilic plant,
you'll understand what I'm referring to?

A I will understand what you're referring to.

Q Okay. So you've got the Dick Engineering
drawings. You have drawings from Stanley
Engineering, do you not?

A We do.

Q You have drawings from other engineers, also, do
you not?

A Yes. Yes.

Q What other engineers?

A Stothert.

Q What other engineers?

A I am not prepared to specifically name them,
though I am of the belief that there would be at
least two or three other firms that I cannot
state, from my own knowledge, that we have other
drawings.

[18] With regard to Mr. Cumming's May 15th affidavit, he testified that the defendants did not have to produce any of their new drawings and specifications because they related to a new process with respect to which the plaintiffs had no right, title or interest. His evidence is that the process was completely changed:

Q All right. How is it, sir, that this seemingly
complete defense emerges in your affidavit of
May 1998?

A How is it that a that date it comes forward?

Q Yes.

A I think, rather simply, the other aspects of
this affidavit, which I'm sure you'll be wishing
to discuss, that lay out the fact that we have been
able to document, through attainment of patent,
that regardless of what we may have said at any
pint in time, that as a result of the patenting, it
is now confirmed that his is an entirely different
process from that which existed before.

...

Q Okay. And it's a totally distinct process from
the earlier process; is that right? Paragraph 8.

A. Yes. Yes. that's correct.

...

Q No, but your evidence is it's completely changed; it's ---

A Yes.

[19] However, Mr. Cumming could not provide an explanation for what Mr. Branconnier Meant in his affidavit where he deposed that the process had remained essentially unchanged. Mr. Cumming testified, as follows:

Q Now, in 5, at the foot of the page, --.
Oh, let me just ask you. You're aware that
Thermo Master TM, the term Thermo Master TM, is a
trademark which is licensed to Trooper
Technologies Inc. under the European licensing
agreement? You're aware of that, aren't you?

A That --. The trade marking of that term, yes.
I'm aware of that.

Q Okay. So we have no problem, do we, with the
fact that Trooper may call its plants Thermo
Master TM plants or its process Thermo Master TM
process, correct? It's licensed to do so.

A It's licensed to use those terms.

Q Right. Okay. So --

A Not --

Q So look at 5 of Mr. Branconnier's
affidavit. He says, "The Thermo Master TM
process has remained essentially unchanged since
the first decision was taken to proceed on a
commercial scale with the development of Thermo
Master TM plants, and the process which was
contracted to be provided to the plaintiffs
pursuant to the Eastern European Licensing
Agreement has been fully and completely
satisfied."

Q Do you see that?

A I see it. Yes

THE COURT: Which paragraph, Mr. Lunny?

MR. LUNNY: 5, at the foot of page -- the
first page of tab 5, my lord.

THE COURT: Oh, tab 5? I'm sorry. Thank you.

MR. LUNNY:

Q So you say it's a new process, distinct from the
original process, and Mr. Branconnier says it's
essentially unchanged. Which is it?

MR. BOWES: Well, my lord, --

A The --

MR. BOWES: -- I must object to that question, because
my friend is putting a paragraph of
Mr. Branconnier's affidavit to him in the context
of his own cross-examination and is --

MR. LUNNY: What's wrong with that?

MR. BOWES: -- and is misleading this witness as to
the reference to the word "process" in
Mr. Branconnier's affidavit, which is a specific
reference to a specific process, and attempting
to confuse this witness by that question as a
result of his last evidence on the last
cross-examination regarding a different process.
I think that's unfair, and I object.

THE COURT: Proceed, Mr. Lunny.

MR. LUNNY: Thank you.

Q Let's go to, if I might, 12. Please
read that.

A I'm sorry, where are you?

Q Page 2 of --

A Of?

Q Of Mr. Branconnier's affidavit, 12. He
says that, in further response to 6(a),
"Although, there have been some significant
engineering upgrades to the standard Thermo
Master TM plant, the heart of the system, namely
the aerobic thermophilic microbial fermentation
or Thermo Master TM process is totally reliable
and has remained essentially unchanged since the
decision was taken to proceed to commercial scale
with this process."

Q Well, is it unchanged or is it totally
distinct?

A I can't answer for precisely what Mr. Branconnier
meant in this statement. I can tell you what our
new patented -- what we call Thermo Master TM
Mark II process actually consists of and how
that's different.

[20] Mr. Cumming testified further that Corinth, Brampton and Hamilton plants were not constructed pursuant to the Manual, which contradicts the sworn evidence of Mr. Branconnier that these plants were constructed pursuant to the design criteria manual. Mr. Cumming testified, as follows:

Q Okay. Let me just repeat my question: Is it
your evidence that the Corinth, Brampton and
Hamilton plants were not constructed pursuant to
this design criteria manual?

A That would be correct, yes.

Q Okay. Maybe you can look at 22 of
Mr. Branconnier's affidavit, the bottom of the
page, because he says, "The Corinth, Brampton and
Hamilton plants were all constructed pursuant to
the design criteria manual prepared by Stothert
Engineering."

Q Do you see that, sir?

A I do.

Q Which one is it? Is it your version or his?
Which one's the case?

A Well, as I've previously said, first, I have not
seen this, and secondly, I do not know precisely
what Mr. Branconnier was referring to. This is a
complex issue, and I will simply make my own
statement.

[21] Turning next to the evidence of Mr. Ross Lewis, in his affidavit sworn March 11th, he deposed, inter alia, as follows:

3. That on March 10, 1998 I delivered to the
offices of O'Neill & Company, a package of documents
containing the standard certified engineering
specifications, including drawings, regarding
thermophilic plants that have been prepared for
Thermo Tech Technologies Inc. and Thermo Tech Waste
Systems Inc.

4. That to my knowledge there were no other
certified engineering specifications or
drawings regarding thermophilic plants in the
possession or control of Thermo Tech Technologies
Inc. and Thermo Tech Waste Systems Inc. that are
referred to in the Order of Mr. Justice Cohen.

5. That I have reviewed an entered copy of the
Order Of Mr. Justice Cohen, granted January 20, 1998
in this proceeding and I verily believe the
documentation which I have delivered to O'Neill &
Company for delivery to the solicitors for the
Plaintiffs herein, fully complies with the Order of
Mr. Justice Cohen in every aspect.

6. That I personally directed the updating and
revision of the standard certified engineering
specifications so delivered so as to make them
accurate and current to the date of delivery and
declare they include all such Specifications for
Improvements (as defined in paragraph 7.03 of the
Eastern European License Agreement).

7. That I hereby certify that the standard
certified engineering specifications flaw delivered
fully satisfy what is reasonably necessary to enable
a Licensee to utilize the Thermophilic Aerobic
Digestion Process (defined as "Process" in the
Eastern European License Agreement of October 19,
1992) and to construct Plants (as defined in the said
Eastern European License Agreement).

That attached hereto and marked Exhibit "A" to
this my Affidavit is a true copy of the letter of
certification which I have now delivered to accompany
the delivery of the standard certified engineering
Specifications and drawings referred to therein.

[22] At a hearing before this court on April 8th, defence counsel submitted, as follows:

... Mr, Lewis, who is a professional engineer, has
been in this field of process technology for 25
years, and has provided consulting and engineering
services to Thermo Tech Technologies and Thermo Tech
Waste Systems over the past nine years. He's been
there, he knows what has developed. He delivered to
me on March 10th, late, the package of documents
containing the standard certified engineering
specifications, including drawings, regarding
thermophilic plants that had been prepared for Thermo
Tech Technologies Inc. and Waste Systems companies.

Paragraph 4 To his knowledge - and this is a
[fax cut off but I suspect it says something like "man who has spent"]
years doing all this stuff - to his knowledge, there
are no other standard certified engineering
specifications or drawings regarding thermophilic
plants in the possession or control of either of
these companies as referred to in your order.

[23] However, Contrary to Counsel's submission, in cross-examination. Mr. Lewis testified that he was first contacted by the defendants after the Order was granted and that prior to that, his firm had not provided significant services to the defendants since 1994. Mr. Lewis testified on this point, as follows:

Q That's helpful.
When were you contacted --. Well, let me
put it this way: I understand from the evidence,
given by Mr. Cumming that you were contacted
sometime after the judgment in the case had came
down to do the work that resulted in this book.
is that correct?

A Basically, yes.

Q Okay. Can you tell me when that was?

A I'll just look at my -- Let me look back
at the file here and see when we started.
The first note I have here is from the 4th
of February.

Q Okay,

A So it would have been sometime prior to
that.

Q And I --. And you correct me if my -- if
I'm wrong at all, but I also understand
that Stothert Engineering had essentially
little to do for Thermo Tech Technologies
Inc. in the time period before being
retained for this project, back to 1994 or
so; is that correct?

A Yeah. We've kept in touch with them, but
we haven't provided any -- any significant
services through until the beginning of
this year.

Q All riqht. So --. And I take it you
work has been done for the Thermo Tech
Companies by other engineering firms in the
interim?

A. I'm aware of that, yes.



To: David Pickering who wrote (4432)7/14/1998 1:27:00 AM
From: Clement  Respond to of 6467
 
Court Ruling. Part Three of Three (Enjoy)

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[24] Mr. Lewis said that he read the License Agreement, the Reasons for Judgment and prior versions of the Manual, but conceded that he did not attend the defendants' offices to review the engineering drawings and specifications in their possession. He admitted to reviewing the Dick Engineering drawings. Importantly, he also admitted that the engineering drawings and specifications of Stanley Engineering and Dick Engineering related to thermophilic plants and to the design or construction of such plants. He testified, as follows:

Q All right. no those -- those --. Let me
just ask you: The engineering
specifications and drawings that we've
referred to, in terms of Stanley
Engineering and Dick Engineering, relate to
thermophilic plants, do they not?

A Yeah. But they're for the construction of
thermophilic plants -

Q I understand. The design or the
Construction of themophilic plants,
correct?

A Uh-hum.

Q Is that. right?

A Yes.

[25] Mr. Lewis testified as to flow he went about carrying out his instructions from the defendants, as follows:

A It was done orally. They asked -- they had
basically asked if we could update the
manual. Well, first of all, we talked.
about what the judge's order was, and I
read through the -- read through the order,
and it specifically -- this manual was
specifically addressed to transfer
technology to the licensee. And that was
basically what we interpreted. The judge
took exception to the specifications that
dealt with the construction of plants and
the sourcing of equipment. and so anything
that had to do with that, we -- this was
what was remaining after that was excepted.

Q Now, when you say "took exception" to the
construction, --

A Well, in the judge's order, there was some
-- there was an exception that what -- what
wasn't included to be transferred.

[26] The witness then went On to describe how he interpreted what was at excepted" from the Order, as follows:

Q Okay. Maybe I can just get you to point
that out for me, sir.
This is a reference at -- - Maybe I
can just give you this one.

A Okay.

Q A reference to environmental assessment
reports, cost assessment reports, and
documentation regarding the specifications
and sourcing the equipment?

A That's right. And so basically, that stuff
fell into the category of specifications of
sourcing of equipment used in the
construction of thermophilic plants.

Q Okay.

A So I would consider, you know, construction
drawings to fall into that category,

Q What about design drawings? They wouldn't
fall into that --

A Yes.

Q -- category.

A Those are --. That's what that is for.

Q It doesn't say design drawings here, does
it?

A Sorry?

Q It doesn't say drawings for the
construction, does it?

A Sorry?

Q It doesn't say drawings for the
construction.

A Well, let me read that again, if you
wouldn't mind.
It says, "All documentation regarding the
specifications and sourcing of equipment used in
the construction of thermophilic plants." I
would consider that to include design drawings.

Q Okay. So if design drawings and
construction drawings are excluded, what's
left?

A Technology transfer manual, which is -
which was provided.

Q The technology transfer manual, is that a
new name for it? We've --

A No.

Q -- called it --

A That's basically what the title is, but it
basically defines the specifications and
the details of the equipment required to
build the plant. Build a Thermo Tech
plant.

[27] Mr. Lewis described the revisions he made to the Manual as "a number of minor revisions, mainly operating related", and that they were made after he was contacted by the defendants following the Order He said that basically he asked the defendants what changes had been made in their process and then he updated the Manual accordingly. He also said that some of
the changes in the control system were not so minor. In any event. the witness admitted that the changes he made to the Manual only included ones that the defendants gave to him.

[28] Mr, Lewis also testified that there is a difference between equipment used in the construction of thermophilic plants and the equipment; used in thermophilic plants and that had there been no such "exclusion" in the Order, he would have likely felt it necessary to deliver up a great deal more in the way of certified engineering specifications and drawings. When asked whether the revised Manual gave the plaintiffs a great deal more than they already had, he said, "That's basically what the License Agreement, as I interpret it, said they should get." He said that the Manual "updated" the information the plaintiffs already had.

[29] Mr. Lewis conceded that the references in the Statement of Defence to the re-design and re-engineering drawings was not a reference to anything he had done. He also said that given that the Statement of Defence was dated December 30, 1997, the Manual was not the certified engineering drawings and specifications referred to in the Statement of Defence.

[30] Finally; in re-examination, Mr. Lewis was asked if he stood by his affidavit evidence that to his knowledge there are no other standard certified engineering specifications or drawings regarding thermophilic plants in the possession or control at the defendants that are referred to in the Order. He answered, "I do, given the exemptions that the judge made regarding the specifications for sourcing of equipment and construction." It must be noted, as Plaintiffs' counsel pointed out, that the witness made no such qualification in his affidavit.

[31] In my opinion, the evidence is overwhelmingly conclusive that the delivery at the Manual did not satisfy the order and that the defendants are in contempt.

[32] First, given the fact that Mr. Lewis was not retained until after January 20th, the Manual cannot be the "complete set of design drawings for the new generation Thermo Master plant" referred to in a form filed by the defendants with the Securities and Exchange Commission ("SEC"), Washington, D.C. for the fiscal year ended April 30. 1997 (referred to in my Oral Reasons for Judgment pronounced January 20, 1998. at p. 5). Nor can the Manual be what is referred to by the defendants in its Report of Foreign Issuer filed with the SEC for the period ending July 31, 1997 where they stated, "Comp1eted engineering design drawings have been received from Dick Engineering for 400 and 600 ton per day plants and have been turned over to Lockerbie Thermo Tech for construction." (Oral Reasons for Judgment at p. 6). Nor can the Manual be what is referred to in the defendants Executive Summary as completed engineering drawings (Oral Reasons far Judgment at p. 7) or in a News release dated January 12, 1998 wherein the defendants announced that "Mr. Rene Branconnier, President and CEO stated, completion and stamping of the design drawings by Dick Engineering..." (Oral Reasons for Judgment at p. 8)

[33] Second, Mr. Lewis had no personal knowledge of the defendants' improvements to the Process as he did not attend the defendants' offices in preparing the Manual. but relied solely on what the defendants told him were the changes to the Process. Further, Mr. Lewis' explanation about "exemptions" to what was ordered delivered came out in cross-examination, and was not part of the opinion he gave in his affidavit, which was unqualified. In any event, the defendants cannot rely on Mr. Lewis' interpretation of the order to mitigate their non-compliance. Most importantly, Mr. Lewis conceded that the Manual could not be what is referred to in the statement of Defence. Finally, with respect to Mr. Cumming's testimony, his position that there are significant differences between the processes beyond those which may be categorized as "improvements" is a new position not raised in the pleadings and completely contradicted by Mr. Branconnier's evidence. According to Mr. Branconnier the process has remained unchanged and the plants were all constructed pursuant to the design criteria manual.

[34] In addition to the above references, which, in my view, clearly establish that there exists "standard certified engineering specifications, including drawings" which have not been delivered by the defendants to the plaintiffs, there is also the fact that at the hearing before me an January 20th, defence counsel said:

The submission that I would like to make is the
design drawings that your Lordship has ordered to be
delivered, my concern is that if those drawings are
delivered, once they are delivered the horse is out
of the barn. I am wondering if your Lordship would
consider at this moment a stay of this order on the
condition that a Notice of Appeal be filed before
Friday-...in order that this matter can be resolved
and heard by the Court at Appeal without the drawings
actually having left...

Obviously in expressing his concern about the release of drawings to the plaintiffs defence counsel could not have been talking about the Manual, firstly, because at that time it was not yet in existence and secondly, because an earlier version of the Manual was already in the plaintiffs' hands.

[35] "One object of contempt of court proceedings in a civil matter is to use it as a means of enforcing performance of a court order by one party for the benefit of another party". See United Food and Commercial Workers, Local 1400 v. F.W. Woolworth Co. Limited, [1993] 2 W.W.R. 578 (Sask. Q.B.). At pp. 681-682, Armstrong J. said:

The argument of the respondent would have the court
be much more concerned with having the penalty suit
the offender than the offence. The financial
information on Woolco and its size are really only
relevant in consideration of two factors. The first
is ability to pay The other factor is that the fine
to be effective must come to the attention of the
offender. There would not be much point in this case
in a fine that could be paid out of petty cash in a
local stare or treated as another item of overhead.
Not only must the penalty come to the attention of
Woolco, it must be taken seriously.

[36] Based on the whole of the evidence before the court, I am satisfied beyond a reasonable doubt that as of the date of the contempt hearing, the defendants had not yet complied with the Order. From the time of the plaintiff's request to the defendants for delivery of the materials sought by the plaintiffs the defendants have resisted delivery raising different defences and positions, which defences and positions have now all been rejected by this court. As we1l, it should not be overlooked that although the issue of contempt was not before the Court of Appeal when the defendants applied in that court for a stay of the Order, Macfarlane J.A. commented:

In any event, a stay of execution like an
injunction is a discretionary remedy. I would
exercise my discretion against granting a stay. The
defendants are in contempt of the order below. When
Mr. Justice Cohen refused the stay an application to
this Court for an interim stay could have been made.
It was not. The defendants apparently said they
would appeal within a few days. It took them 29
days. Counsel for the defendants now explains that
there were a number of other applications' before Mr.
Justice Cohen which delayed the matter going forward.
In any event, the order of Mr. Justice Cohen was not
complied with.

[37] Further, in his affidavit sworn March 5, 1998, Mr. Stan Lis, President of the plaintiffs, deposed that as a result of the defendants' continued breach of the Order, the plaintiffs were contemplating laying off most of its employees in Canada and Poland. He also said that if the defendants do not comply with the Order, the plaintiffs may be prevented from constructing thermophilic plants in Poland and may cease to be viable as a going concern.

[38] Given the above background and circumstances, and the time that has elapsed since the order was granted, I think that a substantial fine for contempt is appropriate. Accordingly there will be a fine in the amount of $25,000 against each of the defendants

[39] However, payment of the fine is suspended for a period of one week from the date of this ruling on the condition that within that time the defendants comply with the order. At the end of the period of suspension, if the defendants have not complied with the Order, then the fine shall be paid by the defendants forthwith.

[40] The plaintiffs are entitled to special casts.

[signed Cohen]