By way of background, section 36 of the Competition Act
provides a statutory cause of action to any person who has suffered
loss or damage arising from the breach of any of the criminal
provisions in Part VI of the Act. These criminal provisions include
conspiracy, bid-rigging, misleading advertising, and deceptive
In its decision on the merits, released in May, 2011 (321665 Alberta Ltd. v. ExxonMobil
Canada Ltd.,), the Court had ruled that Husky and Mobil
violated section 45 of the Competition
Act (the conspiracy provision) when they had decided
in 1996 to single-source their acquisition of fluid hauling
services for their properties in the remote Rainbow Lake region of
Alberta, thereby depriving the plaintiff of the ability to compete
for their business and – given their dominant position in
the marketplace – unduly lessening competition among the
two fleet fluid haulers in the region by putting one of them out of
business. The court awarded general damages of $5 million and
punitive damages against each defendant of $500,000, but reserved
the question of costs for a later date.
Private actions for damages under section 36 are not new, but
the recent ruling touches on an important issue closely related to
the bringing of such an action – costs. In particular,
the ruling addresses five separate issues: entitlement to compound
interest, the relevant interest period, investigation costs, the
appropriate costs scale, and costs incurred because of a litigation
Compound Interest: The plaintiff argued that
the wording of section 36 justified an award of compound interest,
but the judge found there was insufficient evidence to support this
claim. He reasoned that there is limited jurisdiction to award
compound interest in both common law and equity, and the plaintiff
failed to meet both relevant tests. As well, the request was barred
because the plaintiff failed to seek compound interest relief in
Interest Period: The judge also held that while
the obligation to pay pre-judgment interest arises when the loss
actually occurs, that period can be reduced if the plaintiff delays
in prosecuting its claim. After a detailed review of the
significant steps in the litigation, the judge deducted two years
of pre-judgment interest from the plaintiff's award of
damages at large.
Investigation Costs: Typically, a successful
plaintiff may not claim pre-action investigation costs, however
according to the Competition Act a party advancing a claim
pursuant to section 36 may claim "the full cost to him of any
investigation in connection with the matter." The court
awarded investigation costs at $75,000, which was a fraction of the
near million dollar sum claimed because the plaintiff's
costs were insufficiently supported by evidence.
Costs Scale: The plaintiff's claim that
the use of the term "full cost" in the statute should be
interpreted to mean that the plaintiff can recover on a
solicitor-client basis rather than the usual party and party basis
was flatly rejected. The court stated that solicitor-client costs
are reserved for exceptional circumstances and if Parliament wanted
section 36 to be one of those cases, then it could have said
Litigation Loans: A claim for the cost of money
borrowed to finance the litigation was denied. The court
relied on earlier Court of Queen's Bench of Alberta
jurisprudence that held litigation loans were not
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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