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
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
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