Canada: A Significant Development In Antitrust Class Actions In Canada: The B.C. Court Of Appeal Rejects Certification Of Two Indirect Purchaser Class Actions And Adopts The Rule Of Illinois Brick

Earlier today, the B.C. Court of Appeal released two rulings that may have a profound impact on antitrust law and antitrust class actions in Canada. In two appeals, the B.C. Court of Appeal reversed certification in two pending antitrust class actions, and the B.C. Court of Appeal concluded that indirect purchasers have no cause of action in law for damages under the Competition Act. These rulings represent a dramatic departure from the existing jurisprudence on antitrust class actions in Canada, and if upheld, will represent a profound change in the landscape of private antitrust enforcement in Canada. 

In recent years, the courts in Ontario, Quebec and B.C. have certified a number of antitrust class actions in Canada on a contested basis. In these decisions, the courts have certified claims in respect of both vertical and horizontal anti-competitive conduct, and the courts have certified classes consisting of both direct and indirect purchasers, often within the same consolidated class. In many instances, these class actions have been brought on the heels of a global price-fixing investigation – namely, in circumstances where specialized plaintiff firms in Canada have initiated class proceedings in Canada in conjunction with parallel class proceedings in the United States. For example, the Ontario Superior Court certified a consolidated class of direct and indirect purchasers in the hydrogen peroxide case in 2009, and the B.C. Court of Appeal certified a consolidated class of direct and indirect purchasers in the DRAM case in 2009. In addition to these certified cases, there remains a significant number of pending class proceedings in Canada that have not yet reached the certification stage, including class proceedings in respect of SRAM, LCD, CRT, air cargo, chocolate, motor vehicles and numerous other products sold in Canada.    

However, earlier today, the B.C. Court of Appeal released two rulings that represent a significant departure from this prior jurisprudence. In Sun-Rype Products Ltd. v. Archer Daniels Midland Company (2011 BCCA 187), the plaintiffs had brought claims for horizontal price-fixing against a number of manufacturers of high fructose corn syrup (HFCS) and the plaintiffs sought to represent a class of direct and indirect purchasers of HFCS. In Pro-Sys Consultants Ltd. v. Microsoft Corporation (2011 BCCA 186), the plaintiffs had initiated a number of vertical and other anti-competitive claims against Microsoft and the plaintiffs sought to represent a class of indirect purchasers of Microsoft software products. At first instance, the B.C. Supreme Court had granted certification in both cases, and the appeals of both cases were argued and heard by the same panel of judges at the B.C. Court of Appeal.

The Court of Appeal allowed the appeal from certification in both cases – largely on the reasoning that indirect purchasers in Canada have no cause of action for relief under the Competition Act. More specifically, on behalf of a 2-1 majority in both decisions, Mr. Justice Lowry found that the plaintiffs had failed to disclose a viable cause of action in law given the Supreme Court of Canada's prior decision in Kingstreet Investments Ltd. v. New Brunswick (Finance). In Kingstreet, the Supreme Court of Canada had rejected the assertion of a "passing on" defence in a restitutionary case, on the reasoning that a defendant cannot reduce its liability by establishing that some or all of the unlawful harm was passed on to others. In light of the Supreme Court's reasoning in Kingstreet, the Court of Appeal found that it followed that any claim by an indirect purchaser that was premised on the allegation of an anti-competitive overcharge that had been "passed on" through a distribution chain was not recognized under Canadian law and therefore "cannot give rise to a cause of action." Justice Lowry held that "as a matter of law, the overcharge or the loss for which the wrongdoer is liable is sustained when the overcharge is paid at first instance."

In other words, in Microsoft and Sun-Rype, the B.C. Court of Appeal appears to have ruled that indirect purchasers have no cause of action for damages under the Competition Act, and as a result, the law in Canada has arguably fallen in line with the federal antitrust laws in the U.S. as reflected by the U.S. Supreme Court's book-end rulings in Illinois Brick Co. v. Illinois and Hanover Shoe v. United Shoe Machinery Corp. Given the absence of a cause of action on behalf of indirect purchasers, the B.C. Court of Appeal found that the courts had erred in the first instance by certifying a class that included indirect purchasers in both cases. More specifically, in Sun-Rype, the B.C. Court of Appeal set aside certification, and remitted proceedings for further consideration. In Microsoft, given that the proposed class consisted of exclusively of indirect purchasers in Canada, the B.C. Court of Appeal set aside certification, and dismissed the action.

In short, if upheld, these two decisions may have a significant impact in antitrust class actions in Canada, particularly since most of the pending cases involve claims by indirect purchasers who are alleged to have been harmed by price-fixing conspiracies outside Canada. However, in both cases, there was a spirited dissent. Given the existence of this dissent, and the potential impact of these decisions, the plaintiffs will undoubtedly seek leave to appeal from the Supreme Court of Canada to clarify the scope of private antitrust enforcement in Canada. 

Christopher Naudie practices corporate and commercial litigation, with a strong focus on class action defence and cross-border litigation. Geoffrey Grover has experience in a range of corporate-commercial matters and securities litigation. He joined Osler as a summer student in 2007 and returned to article with the firm in 2008.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Gowling WLG
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Gowling WLG
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions