The Federal Court of Appeal, in a recent decision under the Competition Act, (the Act), has confirmed that the effects of a conspiracy do not have the effect of extending the limitation period under the Act, but also declined to close the door against the extension of the limitation period by the application of the discoverability principle in future cases.
In August 2008, Garford Pty Ltd. (Garford) sued Dwyidag Systems International, Canada, Ltd. (DSI) and others for patent infringement and alleged breaches of the Act. Garford claimed that DSI, having entered into three purchase agreements to acquire the assets of certain entities in the cablebolt market, breached subsection 45(1) of the Act, which prior to its amendment in 2010 prohibited conspiracies, agreements and arrangements that unduly lessened competition.
DSI defended the suit on the ground that pursuant to the two year limitation period under subsection 36(4) of the Act, which provides that an action must be brought within two years of the date of the conduct complained of, had expired several months before Garford had commenced its claim. The Federal Court agreed and in 2010 granted summary judgment to DSI, rejecting Garford's argument that the limitation for private actions under the Act was subject to the discoverability rule, effectively delaying the running of a limitation period under until a plaintiff discovers the cause of action. That court also rejected Garford's "continuous offence" argument, holding that ongoing effects of an alleged conspiracy do not extend the limitation period.
The Federal Court of Appeal on February 13, 2012, affirmed the Federal Court's holding that the effects of a price fixing conspiracy do not form part of the conspiracy offence under section 45, because at the relevant time, "the offence was complete upon the finalization of an agreement that, if carried into effect, would unduly limit competition." However, the Court did not go so far as to hold that the discoverability principle is not applicable to the section 36 limitation period, but rather decided that the issue of discoverability simply did not arise on the facts of the case. The Court's ruling, stating that the Federal Court judge's findings of fact preclude any argument based on discoverability, "assuming without deciding, it is legally available" suggests that future plaintiffs are not necessarily precluded from claiming that the principle could apply.
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