On July 22, 2010, the British Columbia Supreme Court released
its decision in Novus Entertainment Inc. v. Shaw Cablesystems
Ltd., 2010 BCSC 1030, which considered whether a civil cause
of action for interference with economic or business interests can
be based on an allegation that the defendant abused its dominant
position contrary to the Competition Act (Canada). The
Court decided that without a prior determination of abuse of
dominance by the Competition Tribunal, there is no valid cause of
While courts in the past have held that without a determination
by the Competition Tribunal, reviewable conduct under the
Competition Act is not "unlawful conduct" for
the purposes of a common law tort, this is the first case to
consider the effects of the recent amendments to the
Competition Act, which gave the Competition Tribunal power
to impose a large administrative monetary penalty (up to $10
million for a first occasion and $15 million for subsequent
orders). Some commentators had argued that by giving the Tribunal
the power to impose large fines, Parliament had changed the
fundamental character of abuse of dominance from conduct that is
presumptively legal to conduct that is generally unlawful, and as
such it could supply the "unlawful" element in common law
torts like interference with economic or business interests.
At the centre of the dispute between Novus and Shaw was a series
of advertising campaigns conducted by Shaw in 2009. In one of the
advertising campaigns, Shaw offered new customers promotional
pricing for services offered by Shaw, including high-definition
television, telephone and highspeed internet. Novus alleged that
Shaw was engaging in anti-competitive behaviour contrary to s. 79
of the Competition Act. On this basis, Novus advanced a
claim based on the tort of "unlawful interference with
business and economic interests."
In the 2006 case of Pro-Sys v. Microsoft, the British
Columbia court held that a party could not rely on an alleged
"breach" of s. 79 of the Competition Act as the
basis for a claim of unlawful interference, unless the Tribunal had
first issued an order prohibiting the conduct. In that case, the
Court held that conduct falling within the ambit of s.79 of the
Competition Act was not unlawful until that conduct had
been specifically prohibited by an order from the Tribunal.
Novus argued that since the Competition Act now permits
the Tribunal to impose an AMP for past conduct, that conduct must
be considered unlawful regardless of whether there has been an
order prohibiting the conduct.
The Court rejected Novus's argument, stating as follows:
In my view, the amendments to the Act do not change the
rationale underlying the decision in Pro-Sys. While the
amendments have the effect of allowing the Tribunal to consider a
respondent's prior conduct in the determination of any monetary
penalty it might impose under the Act, the Tribunal must first make
an Order under s. 79(1) that a respondent has engaged or is
engaging in anti-competitive acts. [Para 35]
In the result, the Court struck out Novus's pleadings based
on abuse of dominant position, along with other pleadings not
directly related to the Competition Act claims.
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