The recent Ontario Court of Appeal case of TPG Technology v
Competition Bureau1 is a reminder that even in the
effort to vigorously enforce the Competition Act, and
publicize those efforts, the rules of defamation apply. The case
arose out of a bid rigging investigation conducted by the
Competition Bureau, which led to charges against the plaintiffs as
well as a variety of other firms. The Competition Bureau issued to
press release announcing the charges.
The plaintiffs sued, alleging that the press release was
defamatory. The words alleged to constitute defamation included the
"As a result of the agreement,
the bidders were allegedly able to maximize the rates at which
services were to be provided to the various
"The Bureau's best weapons
to combat these secret criminal anti-competitive
"Some recent studies suggest
that in cases where bid rigging occurs, the price paid for the good
or service typically increases by about 20 percent."
"The Bureau found evidence
indicating that several IT services companies in the National
Capital Region secretly coordinated their bids in an illegal scheme
to defraud the government by winning and dividing contracts, while
blocking out honest competitors."
"Bid rigging is a criminal
offence where bidders secretly agree not to compete or to submit
bids that have been pre-arranged among themselves. Their goal is to
thwart the competitive tendering process and inflate prices to
"Bid rigging charges under
section 47 of the Competition Act. Charges laid against 7
companies and 14 individuals based on allegations that the parties
entered into agreements to coordinate their bids in an illegal
scheme to defraud the government by winning and dividing contracts
for information technology services."
The government brought a motion to strike out the claim of
defamation in the pleading, and the motions judge did so. However,
on appeal the Court of Appeal noted that the question was whether
the defendants went beyond simply stating that the plaintiffs had
been charged with bid rigging – did they imply that it
was alleged that the plaintiffs engaged in conduct more serious and
blameworthy than bid rigging. It noted that it is settled law that
reporting that someone is under investigation or has been charged
with an offence is not considered the equivalent of saying that the
person has committed the crime, unless there is something in the
language that more than suggests otherwise. "However, reports
of arrest or charges will be capable of conveying a defamatory
meaning where it is stated, either directly or by clear
implication, that an offence has been committed, and that the
qualifications contained in any of the surrounding statements are
not sufficient to outweigh or nullify the effect of what appears to
be a plain statement of fact." The distinction is between
reports which state that a person has been charged and reports
which assert directly or by clear implication that the person has
engaged in a criminal offence.
In order to establish an offence of bid rigging the Crown does
not have to prove that prices were inflated or that anyone was
defrauded. These are not ingredients of the offence. The Court of
Appeal concluded that it was at least arguable that the challenged
statements did indicate that the plaintiffs were guilty of fraud
and price inflation, and that this need not be proven as an element
of the offence of bid rigging. Apparently those elements did not
form a part of the case led by the Crown at the preliminary
inquiry. Consequently, the Court of Appeal concluded that it was
not plain and obvious that the statements challenged were not
capable of bearing a defamatory meaning. The test for striking out
a claim is whether it is "plain and obvious" that the
challenged statement is not capable of bearing a defamatory
meaning. If it is capable of bearing a defamatory meaning, then the
question of whether it in fact does do so is a question of fact for
determination at trial and not a matter to be dealt with by way of
preliminary pleadings motion.
This case, applicable across a broader range of conduct than
just competition law, is a timely reminder that statements made
about cases – by either the prosecuting authorities or
the defence – can take on a life of their own, and that
considerable care is required, even in the heat of the moment, when
publicizing serious allegations.
1 TPG Technology Consulting Ltd. and Donald Powell v
Her Majesty the Queen in Right of Canada as represented by the
Minister of Industry Canada and as represented by the Competition
Bureau of Canada, John Pecman, Sheridan Scott and Stephen
Fitzpatrick, 2012 ONCA 87.
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
The Canadian Competition Bureau issued a template document for use as a form of Consent Agreement, to be filed with the Competition Tribunal to resolve concerns the Bureau may have with proposed mergers.
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