VANCOUVER — It’s being described as the largest case of knock-off luxury goods being sold in Canadian history and the individuals involved are potentially facing more than $2 million in fines and damages.
Federal Court Justice James Russell is being asked to assess those damages against a Vancouver company, Singga Enterprises (Canada) Inc., the Toronto-based Altec Productions and Vancouver store owner Yun Jaun Guo of Carnation Fashion on Kingsway.
The damages are being sought by lawyers representing Louis Vuitton Canada Inc. and Burberry Canada Inc.
The largest damages assessed by a Canadian court for similar offences was the $1 million awarded against a Burnaby woman for selling knock-off Louis Vuitton goods in 2008.
Given the difference in the amount of counterfeit goods being sold "that case pales in comparison to this," Vancouver lawyer Michael Manson representing Vuitton and Burberry told Russell.
He said Cantonese-speaking undercover investigators were told any amount of any counterfeit item could be supplied.
Guo was the only defendant to show up at a summary trial in Federal Court Tuesday – one of only four such trials ever held in Federal Court following changes to procedures last year that allows litigants quicker access to the courts.
The court was told that defendant Gorden Chan, a Canadian citizen, was under arrest in China and that the other principals of Altec named as defendants – Monica Mac, Rebecca Mac and Pablo Liang – had all left Canada to go to China to secure his release.
Neither Lisa Lam or Kenny Ko from Singga appeared and the court was told that Ko was apparently injured.
Manson told Russell that this sort of behaviour was not unusual for defendants in such cases and their non-appearance showed disrespect for the court.
He said the sale of all sorts of counterfeit goods was an "endemic problem" in Canada and the courts had recognized that an effective deterrent was to award heavy damages.
Not that the injured companies always collected.
"At the end of the day it often results in empty judgments because there will be no cash assets with everything being offshore," said Manson.
However, he said Lam had recently transferred her house to her husband for $1 but he has launched a court action to have the home held forfeit for damages.
The distribution and sale of the luxury goods was a "sophisticated operation with manufacturers in China and a national distribution system" in Canada, Manson said.
An investigation into the sales of counterfeit handbags, sunglasses, watches, bracelets, earrings and other jewelry and accessories began in 2008.
The goods were manufactured in China sent to Vancouver and kept in warehouses here and in Ontario.
Items were sold in stores, via the Internet – Manson said the Altec website was still active on Monday – with many items being sold in gift stores in Alberta.
Manson’s colleague Karen MacDonald said in terms of culpability the actions of Altec closely followed by Singga were the worst while Guo’s were below them in scale.
Guo sold Louis Vuitton bags she kept hidden in a backroom and had attempted to reach an out-of-court settlement with the company but failed, Russell was told.
Guo, who represented herself and spoke through an interpreter, admitted she knew the items were counterfeit but asked Russell for leniency based on her ignorance of Canadian law.
Russell reserved judgment.
Outside the court Manson said that damages being sought against Guo "would be in six figures not millions."
The majority of the $2 million in damages is being sought from Singga and Altec.
gbellett@vancouversun.com
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