On November 3, 2011, the Competition Tribunal issued a decision refusing to grant summary disposition to the vendor respondents in Commissioner of Competition v. CCS Corporation, thus confirming dissolution as a possible remedy in the case. The proceedings centre on the Commissioner's application challenging CCS Corporation's completed acquisition of Complete Environmental Inc., which owns the Babkirk Secure Landfill located in northeastern British Columbia, on the basis that the transaction is likely to substantially prevent competition for the disposal of hazardous waste in northeastern British Columbia (for more on the case, see our earlier post).
Because the proceedings deal with a completed transaction, the vendor respondents maintain that they are only implicated to the extent that the Tribunal would order dissolution as a remedy. Consequently, the vendor respondents moved to have the Commissioner's application dismissed against them on the ground that there was no genuine basis for the Tribunal to order dissolution. They argued that dissolution was an overly broad and punitive measure, and that divesture would be an effective and more appropriate remedy (assuming that the Commissioner is able to prove that the acquisition would substantially prevent competition). On the other hand, the Commissioner maintained that dissolution might be a necessary remedy, and argued that the application should be allowed to proceed to a hearing in order to determine several factual issues that would impact on the viability of either divesture or dissolution as an appropriate remedy.
Justice Simpson stated that in order for the Tribunal to grant the respondents' motion, the respondents would have to have demonstrated that there was no genuine basis for the Commissioner to seek dissolution as a remedy. This required them to show that divesture was an effective and realistic remedy. While divesture is theoretically an effective remedy, Justice Simpson found that the lack of any identified buyer in this case made it potentially unrealistic. Moreover, she accepted the Commissioner's argument that evidence might be adduced at the hearing which would speak to the relative effectiveness and intrusiveness of dissolution and divesture.
Justice Simpson was also unconvinced by the Respondent's contention that the Commissioner had failed to explicitly allege dissolution as the only effective remedy. It was sufficient that the Commissioner had claimed dissolution as an alternative remedy, to be used if it was the only remedy available to adequately address the substantial prevention of competition. Consequently, Justice Simpson kept the door open to the possibility of dissolution, concluding that if the Commissioner was successful on the merits it would be for the Tribunal to weigh the evidence for and against the two remedies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.