Legal action against grey market dealers on hold pending Supreme Court decision

The Supreme Court of Canada’s decision last week to review the legality of grey market satellite TV has given dish dealers hope that the country’s highest court will strike down legislation that has been used to prosecute companies selling foreign DBS services. The lawyer representing Bell ExpressVu in grey market cases is also happy that the Supreme Court has granted his client’s leave to appeal, saying a definite ruling is needed that applies equally to all provinces (CCR, Jan. 17/01). The legality of grey marketing became even muddier last week when the Ontario Court of Appeal upheld a lower court ruling that found the Radiocommunications Act (RCA) too ambiguous in its wording to make the sale of foreign satellite services a crime. The judgement effectively clears the way for grey market sales in Ontario, until such time as the Supreme Court decides otherwise. A similar ruling by the BC Supreme Court in December 1999 also ruled that the RCA was never intended to tackle the grey market (CCR, April 13/00). In reviewing three search warrants used by the RCMP to seize inventory from Tech Electronics and Electronics Plus, Ontario Court of Appeal Justice J.A. Weiler agreed with a lower court decision that the move was excessive and unnecessary. Weiler also agreed that the police used "a poorly-worded quasi-criminal provision in the RCA" to crack down on dish dealers. The RCMP, with prodding from companies like ExpressVu, are using the RCA to prosecute companies that sell unauthorized foreign services and equipment. But Weiler says this section is ambiguous. "Parliament’s intention is not sufficiently clear to warrant the use of coercive powers of the criminal law to punish individuals and companies engaged in the reception of DTH satellite programming signals from foreign countries," the April 20 ruling states. "The content of the foreign programming is not prohibited. It is the decoding of the signal that is of concern. The wording of the French version of the legislation suggests that the prohibition is not absolute and does not apply to foreign distributors." "This decision has stated once again that Canadians cannot be told by the government what to watch," says Gloria Gibbins, co-chair of the Satellite Communications Association of Canada, which represents dish dealers. "That’s the conflict between companies that want to have monopoly rights up here and Canadians that want to receive television from which ever source they choose." Clarification needed Having a Supreme Court ruling on this issue, she hopes, will put an end to 20 years of legal threats against dealers that have continued to sell U.S. satellite TV services. "We have to let the Supreme Court decide because the government, in its writing of the law, has been ambiguous." Bill McKenzie, the lawyer representing ExpressVu, says the Supreme Court will ultimately decide whether grey marketing is a crime. Until then, he doubts there will be any more raids or legal action taken against dish dealers. "It looks to me like nobody is going to go near a court on grey marketing issues until the Supreme Court of Canada has spoken," he says. However, he warns that if the court rules in favour of ExpressVu, charges could be laid the next day. "Look at it this way," he says. "You can go down to the store and buy ExpressVu to get 200 channels and for the rest of your life never worry about it. Or you can buy DirecTV and get 300 channels, pay U.S. dollars, and in a year I might tell you it’s illegal. Take your choice." McKenzie hopes that the case can be heard later this year. If the Supreme Court rules that the RCA can’t be used to prosecute grey market dealers, it would be up to the federal government to draft new legislation. Justice Weiler affirmed that in his decision last week: "If the Government of Canada wants to prohibit Canadians from receiving satellite signals from any source other than those which it approves of, then the Government should say so clearly so Canadians will be aware that receiving unauthorized signals will be treated as an offence," the appeal judge writes.

Legal action against grey market dealers on hold pending Supreme Court decision

Broadcast | April 26, 2001

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