Canada: The Certification of Competition-Related Class Actions in Canada

Last Updated: April 28 2006

By John B. Laskin, Linda M. Plumpton, and Amanda M. Kemshaw*

Reproduced with permission from the Canadian Class Action Review (2006), Vol. 3, No. 1, published by Irwin Law, pp. 216-244.

A. Introduction

Although the first class action legislation was enacted in Canada more than twenty-five years ago1 and class proceedings are now a national phenomenon, Canadian courts still have not stated clearly the manner in which certification principles will be applied to class proceedings alleging antitrust violations. As the Court of Appeal for Ontario has stated, "the question of whether and how consumers will be able to use class actions to obtain relief from price fixing ... remains an open one in this jurisdiction."2

The primary reason for the continuing uncertainty appears to be the limited opportunity the courts have had to develop this area of the law. To date, certification has been contested in only one intended Canadian class proceeding alleging an antitrust conspiracy3 and in one action based on allegations of price maintenance.4 In both cases certification was refused.

Several antitrust class actions have been certified for settlement purposes in recent years, but the decisions in these cases do little to illuminate the courts’ approach in cases where defendants resist certification. While the judicial approach to certification of class proceedings generally continues to evolve, until the courts have had a further opportunity to explore the unique issues that arise when certification of an antitrust conspiracy class action is sought, it will remain unclear whether and under what circumstances claims arising out of alleged antitrust violations will be certified.

In this article we examine the Canadian experience with antitrust class proceedings to date and highlight some of the areas requiring additional judicial guidance. We explore the following issues:

  1. the private right of action under section 36 of the Competition Act,5 including the elements that must be proven to establish this cause of action, the evidentiary problems that frequently arise and the American "solutions" to these problems;
  2. the developing Canadian approach to the unique challenges presented by antitrust class proceedings, analyzed through the framework of the certification criteria; and
  3. the different standards that are applied and issues that arise when antitrust class actions are certified for settlement purposes.

B. Section 36— The Private Right of Action

Section 36(1) of the Competition Act confers a private right of action on victims of anti-competitive conduct. Under this section, any person who has suffered loss or damage as a result of the commission of one of the criminal offences in Part VI of the statute (or a failure to comply with an order of a court or the Competition Tribunal) may sue for and recover the actual loss suffered and the costs of investigating the misconduct and bringing the action.

Section 36 does not authorize claims for punitive damages or injunctive relief.6As a result, claims under this section frequently are combined with tort claims such as civil conspiracy and unlawful interference with economic interests that do allow for these and other remedies.

Conspiracy contrary to section 45(1) of the Competition Act is an offence under Part VI. This section makes it a criminal offence to conspire, combine, agree, or arrange with another to restrain or injure competition unduly. The provision is intended to prevent and punish cartel-like activity that confers market power on the members of the conspiracy, enabling them to fix prices, limit supplies, divide markets, or engage in other anti-competitive practices.7

The purpose of the Competition Act is "to maintain and encourage competition in Canada in order to promote the efficiency and adaptability of the Canadian economy ... and in order to provide consumers with competitive prices and product choices."8 The private right of action under section 36 is designed to further this purpose by deterring antitrust violations and providing compensation for victims.9 Class proceedings seem naturally complementary to section 36: they are also intended both to compensate victims and to modify behaviour.10 But although several competition class actions have been commenced,11 it is not clear that class actions will be an effective tool for the enforcement of competition legislation.

The problems presented by claims under section 36 arise from the requirements of the section itself. To maintain a private action under section 36, a plaintiff must establish (1) an offence under the statute, and (2) loss or damage suffered as a result. Difficulties can arise under both of these elements.12

1) Proof of Commission of the Offence

One factor frustrating the growth of antitrust class proceedings may be the difficulties involved in establishing the commission of an offence where there has been no prior criminal conviction. In these circumstances, the plaintiff’s burden of proof in a section 36 proceeding is higher than the civil standard of balance of probabilities, although somewhat lower than the criminal burden of beyond a reasonable doubt. The plaintiff must "offer substantial proof." The court has stated:

Since s. 36(1) is a remedial section providing a civil remedy for a very serious public crime which provides for a heavy penalty on conviction and where there has been no conviction of the defendant under s. 45(1) nor a prosecution commenced it is incumbent upon the plaintiff to offer substantial proof that the activity prohibited by s. 45(1) has, indeed, taken place.13

Section 36(2) of the Competition Act makes it easier for a plaintiff to succeed where there has been a prior criminal conviction. It creates a rebuttable presumption in civil litigation that an offence was committed:

… the record of proceedings in any court in which that person was convicted of an offence under Part VI ... is, in the absence of any evidence to the contrary, proof that the person against whom the action is brought engaged in conduct that was contrary to a provision of Part VI ... and any evidence given in those proceedings as to the effect of those acts or omissions on the person bringing the action is evidence thereof in an action.

Not surprisingly, the majority of antitrust class actions commenced to date have followed criminal convictions, typically based on guilty pleas.

Given the advantage conferred on plaintiffs by section 36(2), efforts to contest liability by a defendant convicted of an offence under Part VI are unlikely to succeed. Arguably, however, in the case of a conviction following a plea, the more limited evidentiary record may allow the presumption to be rebutted if the defendant adduces "any" evidence to the contrary.14

In both of the competition-related class proceedings that have proceeded to contested certification motions, there had been no prior criminal conviction.15 In both, certification was refused. This reflects a pattern that is also apparent from a review of the antitrust class actions that recently have been certified for settlement purposes. Where there has been a prior conviction, class proceedings are more readily brought but are typically settled. Where there has not been a prior conviction in Canada, problems of proof seem to be deterring plaintiffs from commencing claims.

2) Proof of Loss or Damage

In order to succeed in a private action under the Competition Act, the plaintiff must also demonstrate actual loss suffered as a result of the defendant’s conduct. This element of section 36 poses a significant challenge for proposed antitrust class proceedings, in part because it must be met for each member of the class.

In proceedings under section 36, establishing that a loss was suffered and who it was suffered by can give rise to difficult issues of proof. Consumers, for example, may face significant hurdles in sustaining an action to recover a loss suffered as a result of an unlawful overcharge. Products may be distributed to consumers through different distribution channels, and many variables may influence the prices at which retailers sell products to consumers. In these circumstances, establishing the consequences of anti-competitive conduct, and particularly that an individual consumer paid an excessive price for a certain product, can be an extremely complicated undertaking.16

The case law on conspiracy class actions, particularly those brought by classes made up in whole or in part of indirect purchasers, further highlights these evidentiary challenges. The plaintiff in a conspiracy class action typically alleges that the conspiracy resulted in higher, non-competitive prices. Where a claim is brought on behalf of indirect purchasers under section 36 of the Competition Act, the plaintiffs must establish on a balance of probabilities that they paid an overcharge resulting from the artificial price increase — that is, that the overcharge was not absorbed by direct purchasers, but passed on to them.17 A plaintiff who is an indirect purchaser therefore must: (1) trace the product through the distribution chain to establish that it purchased the product, a complex matter where the product was altered or used as an ingredient in another product at some point in the chain; (2) prove that the overcharge was passed on at every stage of the distribution chain; and (3) demonstrate that the loss resulting from the overcharge affected its stage of the distribution chain. To the extent that the price increase is absorbed along the distribution chain, the loss suffered by each subsequent indirect purchaser will be reduced accordingly, or even eliminated.18

In the United States, the Supreme Court has created rules intended to address these evidentiary difficulties. The combined effects of these rules are both to preclude indirect purchaser class actions and to concentrate the benefits of private actions in the hands of direct purchasers.

The first rule — that a direct purchaser may recover damages even if it passes on some or all of the overcharge — was established in Hanover Shoe, Inc. v. United Shoe Machinery Corp.,19 a treble-damages action under section 4 of the Clayton Act.20 In this case, Hanover Shoe asserted that a shoe machinery manufacturer had engaged in monopolistic behaviour by refusing to sell it certain machines. Hanover Shoe sought in damages the difference between the amount it had paid in machine rentals and the amount it would have paid had it been able to purchase the machines. The defendant argued in response that any loss suffered by Hanover Shoe had simply been passed on to its customers and that the company therefore had suffered "no legally cognizable injury."21

The United States Supreme Court rejected this use of the "passing on" defence and held that a direct purchaser may recover damages even if it passes on some or all of the overcharge to customers in the form of higher prices. The court noted that the evidentiary hurdles associated with establishing that there was no injury to the direct purchaser as a result of the impugned activity would be insurmountable, and would complicate, lengthen, and generally overburden the litigation. The court further held that the passing on defence would reduce the effectiveness of private antitrust enforcement, since it would create a disincentive for direct purchasers to sue. The end result would be an increased risk that antitrust violators would retain the "fruits of their illegality."22

Nearly a decade later, the United States Supreme Court created a second rule that addressed one of the problems created by the Hanover Shoe doctrine — the risk of overlapping recovery by direct and indirect purchasers. In Illinois Brick Co. v. Illinois,23 a variety of government agencies asserted claims against concrete block manufacturers to recover damages arising from a price-fixing conspiracy. The plaintiffs all owned buildings containing the blocks, and were therefore indirect purchasers at the final stage of a lengthy distribution chain. They relied on the argument that the overcharge had been passed on at each stage of the chain. However, the United States Supreme Court expressed concern at the prospect of overlapping or duplicative recovery by direct and indirect purchasers. It confirmed its earlier conclusion that tracing an overcharge through each level in a chain of distribution and then apportioning it among claimants would require enormously complex evidence.24 It concluded that limiting standing to direct purchasers would advance the objective of deterrence, since this class of purchasers had the greatest incentive to sue, and, in light of Hanover Shoe, the greatest chance of recovery.25 The court therefore precluded class action claims by indirect purchasers for damages from a conspiracy to fix prices.

Illinois Brick has been the target of substantial criticism. In response to the decision, a number of states enacted "repealer" statutes intended to grant standing to sue to indirect purchasers. However, this legislative response gives rise to its own problems, since defendants continue to be barred from asserting a passing-on defence. Inevitably this creates risks of double recovery and is an unsatisfactory solution to the indirect purchaser problem.

In Canada, the courts have so far chosen not to adopt the rigid doctrines established in Hanover Shoe and Illinois Brick to respond to the unique challenges posed by antitrust class proceedings. From the few cases decided, however, it is clear that our courts must grapple with the same issues. For example, although the courts have declined to use the Illinois Brick doctrine to preclude class actions by indirect purchasers, no claim of this kind has to date survived a contested certification motion. Indirect purchaser actions may yet prove viable, as we discuss below, but it remains to be seen whether plaintiffs will be able to marshal the evidence necessary to prove damage on a class-wide basis.

Thus far, Canadian courts have also declined to import the principles from Hanover Shoe that bar defendants from arguing that any overcharge paid by direct purchaser plaintiffs was passed on to purchasers further down the distribution chain. It appears that direct purchasers who claim to have suffered a loss as a result of anti-competitive conduct must still prove actual damage. However, two recent appellate court decisions in non-competition law cases raise questions about the future of the passing on defence in the competition law context.

The Court of Appeal for Ontario discussed the passing on defence in a case involving claims of negligent misrepresentation and breach of contract by a provincial law society against its auditor and actuary.26 The defendants sought to strike out a claim against them on the basis that any damages suffered by the plaintiff law society had been passed on to its members through increased premiums and levies. The motions judge ruled that the passing on defence had been recognized in Canadian law only in the limited context of a taxpayer claim for recovery of taxes paid under ultra vires legislation. He effectively determined that the passing on defence was not otherwise available in Canada and dismissed the motions. On appeal, the Court of Appeal ruled that "it is not plain and obvious, as a matter of law, that the passing on defence does not constitute a reasonable defence."27 It therefore let the pleading of the passing on defence stand.

A more recent decision of the Supreme Court of Canada, British Columbia v. Canadian Forest Products Ltd., suggests that it is inclined to take a more definitive view against the availability of the passing on defence.28 The case involved a claim by the province of British Columbia for, among other things, loss of revenue from harvestable trees as a result of a forest fire that was largely caused by a forest company. The forest company argued that the province had suffered no loss because the operation of the provincial pricing system for harvested trees had resulted in increases in amounts paid for other trees, leaving the province with the same overall amount of revenue. The province submitted in response that the company should not be entitled to assert that the loss was passed on to other licensees of harvestable land through the pricing system.

The majority, six of the nine judges, was sceptical of the passing on defence. It stated:

Almost any business will have to "pass on" the impact of a business loss to its clients or customers. It is not generally open to a wrongdoer to dispute the existence of a loss on the basis it has been "passed on" by the plaintiff. Such an argument would require the court to engage in "the endlessness and futility of the effort to follow every transaction to its ultimate result ..."29

However, the majority ultimately determined that since the province had suffered no lost revenue, the passing on defence was irrelevant and did not need to be analyzed further.

The dissenting judges, who would have found that the province had suffered a loss, were more trenchant in their criticism of the defence. They echoed the concerns expressed by courts in the United States that led the Supreme Court to adopt the Hanover Shoe doctrine.30 They expressed the view that the defence

must not be allowed to take hold in Canadian jurisprudence. Although the plaintiff does indeed bear the burden of proving that he or she has suffered an actual loss, the plaintiff need only establish loss in the proximate sense. The courts need not go on to consider whether the plaintiff was able to recoup his or her losses by accessing other sources of revenue or exercising contractual or statutory rights.31

When the views of both the majority and the dissent are taken into account, there seems to be little prospect that the Supreme Court of Canada would give effect to the passing on defence in a common law tort claim. The only serious remaining question is whether the defence would be recognized in a statutory claim founded on section 36 of the Competition Act.

As discussed above, it is prerequisite to recovery under section 36 that a plaintiff have "suffered loss or damage," and recovery is limited to "an amount equal to the loss or damage proved to have been suffered by him." It could be argued that these statutory requirements to prove damage preclude recovery where no net damage has actually been suffered because any loss has been passed on. It seems likely, however, that the Supreme Court of Canada would conclude that these requirements can also be met by proving "loss in the proximate sense." To treat the statutory cause of action as requiring a higher level of proof of damage than a tort cause of action for the same anti-competitive conduct would be ironic, since Parliament’s aim in enacting section 36 was to facilitate, rather than create barriers to, civil claims. To adopt a higher level of proof would likely be futile in any event: plaintiffs would simply recast their claims as common law claims, foregoing reliance on section 36. Accordingly, defendants to antitrust class proceedings will now likely encounter serious difficulty in using the passing on defence as a basis for resisting certification of a direct purchaser class action or a judgment at trial.

C. The Canadian Approach to Certification of Competition Class Actions

With so few cases yet decided, considerable uncertainty remains as to the approach Canadian courts will adopt toward competition class actions at the certification stage. Only one price-fixing case — Chadha v. Bayer Inc.32 — has addressed head-on the requirements for certification of a class of indirect purchasers. Chadha involved an alleged conspiracy to fix the price of iron oxide pigments used to colour concrete bricks and paving stones that were used in the construction of homes and buildings and in landscaping. The increase in iron oxide prices allegedly contributed to an increase in the price of these bricks and paving stones. The plaintiffs, homeowners who alleged that they had suffered damage as a result, brought an action under section 36 of the Competition Act.

The motions judge certified a class with the following description:

All homeowners or other end users in Canada who have suffered loss or damage as a result of the Defendants’ agreement to wrongfully increase or maintain the price of iron oxide and black pigment and otherwise unduly lessen competition, and in general restrict and inhibit competition in the pigment market; in particular, all homeowners or other end users of bricks, interlocking or other construction products containing iron oxide pigment or black pigment manufactured or distributed by Bayer Canada and Norpico or where applicable, their corporate predecessors between 1985 and 1992.33

However, this decision to certify was reversed by the Divisional Court, and the reversal was upheld by the Court of Appeal for reasons that are discussed below.

In addition to Chadha, a price maintenance case, Price v. Panasonic Canada Inc.,34 is also of assistance when considering the future likelihood of certification of a competition-related class action. Price involved allegations that over a period of almost twenty years the defendant sought to maintain resale prices of various audio-visual products, in breach of the former section 28 of the Combines Investigation Act35 and of section 61 of the Competition Act. The motions judge denied certification, a decision which was not appealed. In what follows, we discuss the current state of competition class actions in Canada with particular reference to these two decisions, analyzed within the framework of the mandated elements of the certification inquiry.

1) The Certification Test

The certification motion is a critical step in a class proceeding. It defines the class and establishes the framework for the class action as it proceeds.36 In most cases, certification will lead to settlement, since very few certified class proceedings to date have proceeded to trial. On the other hand, failure to certify will typically lead to the abandonment of the action, since there is little incentive to pursue individual claims.

The test for certification is fairly consistent across Canadian class action legislation. It generally provides that the court shall certify an action as a class proceeding if:

  1. the pleadings disclose a cause of action;
  2. there is an identifiable class of two or more persons;
  3. the claims of the class members raise common issues;
  4. a class proceeding would be the preferable procedure for the resolution of the common issues; and
  5. there is a representative plaintiff who

(i) would fairly and adequately represent the interest of the class;

(ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding; and

(iii) does not have, on the common issues for the class, an interest that is in conflict with the interests of other class members.37

The question to be determined on the certification motion is not whether a proposed class proceeding is likely to succeed on its merits, but whether the claims asserted are properly advanced by way of class proceeding. To satisfy the certification criteria, the proposed class representative must show some basis in fact for each of the certification requirements, other than the requirement that the pleadings disclose a cause of action.38 The defendant to a proposed class proceeding must then decide whether and what additional or responding evidence needs to be led.

2) Disclosure of Cause of Action

Whether the pleadings disclose a cause of action is to be determined solely on the basis of the allegations in the pleadings.39 The ultimate merits of the claim pleaded are not relevant.40 The analytical principles are essentially the same as those applied in motions to strike out a claim for failure to disclose a reasonable cause of action. The threshold is fairly low and will be satisfied unless it is "plain and obvious" that the plaintiff cannot succeed.41

The proposed class in Chadha included only end-users and other indirect purchasers. The defendants attempted both in a pre-certification motion to strike and at the certification stage to rely on Illinois Brick as authority for the proposition that a claim asserted on behalf of a class of indirect purchasers disclosed no cause of action. This argument was rejected both at first instance and in the Divisional Court on the basis that this American authority was inapplicable in Canada.

In Price, in dealing with the first element of the certification test, the Superior Court ruled that the plaintiff had adduced "sufficient evidence to surpass the plain and obvious test as far as a cause of action being disclosed in the pleadings." However, the court went on to state that "even if the Plaintiffs succeed in establishing acts of price maintenance, this determination would only be the beginning of the liability inquiry."42 The court noted that under both the Competition Act and the Combines Investigation Act each proposed representative plaintiff would also have to individually prove loss caused by the conduct of the defendants in order to establish liability. This requirement was relevant, the court noted, both in assessing the complexity of the proceeding and in analyzing whether a class action was a viable and preferable procedure.

As the court observed in Price, there is an interrelationship between the first part of the test for certification and the other criteria. The nature of the claims advanced greatly affects the size of the class and the potential for complications that might render a class action inappropriate.43

3) Identifiable Class

The second part of the certification inquiry requires an identifiable class of two or more persons. The class definition serves three purposes: (1) it identifies the potential individual claimants; (2) it defines the parameters of the litigation so as to identify those persons bound by the result; and (3) it prescribes who is entitled to notice.44 Both the plaintiff and the defendant must file affidavit evidence of their best information on the number of members of the class.45 The plaintiff has an obligation to show that the proposed class is not unnecessarily broad and that it could not be defined more narrowly without arbitrarily excluding some people.46

Defining a class that is simply too large and unwieldy for the action to be fairly and efficiently tried as a class proceeding may result in a decision not to certify. A large proposed class, therefore, may provide the defendant with arguments against certification.47 Issues that require individual determination, such as differences in causation between class members or differences in injuries and damages suffered, as well as differences in the applicable law, are magnified where the class is large.

The definition of the class must also be neutral with respect to the merits of the claim. The class proposed (and initially certified) in Chadha included end-users "who have suffered loss or damage" as a result of the defendants’ conduct. The defendants objected to this definition because, by including only individuals to whom the defendants might ultimately be liable, it turned on the merits of the case. The motions judge rejected the argument that problems of self-identification of potential class members rendered the class definition unacceptable because he did not consider under-inclusion to be a problem.48 However, both the Divisional Court and the Court of Appeal found that the class definition was not objective and that it violated the statutory policy that the merits are not to be decided at the certification stage.49


* All of Torys LLP, Toronto.

1. An Act Respecting the Class Action, S.Q. 1978, c. 8, now Art. 1003, Code of Civil Procedure. See also Class Proceedings Act, R.S.B.C. 1996, c. 50; The Class Actions Act, S.S. 2001, c. C-12.01; Class Actions Act, S.N.L. 2001, c. C-18.1; The Class Proceedings Act, C.C.S.M. c. C130; Federal Court Rules, 1998, SOR/1998-106 (as am. SOR/2002-417), Rules 299.1-299.42; Class Proceedings Act, S.A. 2003, c. C-16.5.

2. Chadha v. Bayer Inc. (2003), 63 O.R. (3d) 22 (C.A.) at para. 65, aff’g (2001), 54 O.R. (3d) 520 (Div. Ct.), rev’g (1999), 45 O.R. (3d) 29 (S.C.J.), leave to appeal refused, [2003] 2 S.C.R. vi [Chadha].

3. Ibid.

4. Price v. Panasonic Canada Inc. (2002), 22 C.P.C. (5th) 379 (Ont. S.C.J.) [Price]. Certification has also been contested in proceedings involving allegations of misleading advertising contrary to s. 52(1) of the Competition Act: Carom vBre-X Minerals Ltd. (1998), 20 C.P.C. (4th) 163 (Ont. Gen. Div.). Developments under the misleading advertising provisions are beyond the scope of this article.

5. R.S.C. 1985, c. C-34.

6. See Wong v. Sony of Canada Ltd. (2001), 9 C.P.C. (5th) 122 (Ont. S.C.J.) at para.17 and Price v. Panasonic Canada Inc., [2000] O.J. No. 3123 (S.C.J.) at paras. 10–11.

7. Stikeman Elliott LLP, eds., Competition Act and Commentary, 2004 ed. (Markham: LexisNexis Canada Inc., 2004) at 33. Other offences under Part VI giving rise to a private right of action include price discrimination and other illegal trade practices (section 50), false or misleading advertising (section 52(1)) and price maintenance (section 61). Unlike in the United States, which allows private actions to recover losses suffered due to monopolistic practices contrary to section 2 of the Sherman Act, 15 U.S.C. §§ 1–7, a private action may not be brought for abuse of dominant position in Canada.

8. Competition Act, above note 5, s. 1.1.

9. Gordon Kaiser, "The New Competition Law: Stage One" (1976) 1 Can. Bus. L.J. 147 at 192.

10. Hollick v. Toronto (City), [2001] 3 S.C.R. 158 at 170 [Hollick].

11. See Chadha, above note 2; Vitapharm Canada Ltd. v. F. Hoffmann-La Roche Ltd. (2000), 4 C.P.C. (5th) 169 (Ont. S.C.J.); Always Travel Inc. v. Air Canada, [2003] F.C.J. No. 288 (T.D.); Bona Foods Ltd. v. Ajinomoto U.S.A. Inc. (2004), 2 C.P.C. (6th) 15 (Ont. S.C.J.) [Bona Foods]; Mura v. Archer Daniels Midland Co., [2003] B.C.J. No. 1086 (S.C.) [Mura]; Alfresh Beverages Canada Corp. v. Hoechst AG (2002), 16 C.P.C. (5th) 301 (Ont. S.C.J.); Alfresh Beverages Canada Corp. v. Archer Daniels Midland Co., [2001] O.J. No. 6028 (S.C.J.).

12. These problems cannot be avoided simply by tacking on causes of action in tort to supplement the statutory claim under section 36. The torts of civil conspiracy and unlawful interference with economic interests also require that plaintiffs establish on a balance of probabilities both that the wrong occurred and that they have suffered loss or injury as a result of that wrong: Chadha (Div. Ct.), above note 2 at 542–43; Lineal Group Inc. v. Atlantis Canadian Distributors Inc. (1998), 42 O.R. (3d) 157 (C.A.) at 159, leave to appeal to S.C.C. refused (1998), 138 O.A.C. 197 (note) (S.C.C.).

13. Janelle Pharmacy Ltd. v. Blue Cross of Atlantic Canada (2003), 217 N.S.R. (2d) 50 (S.C.) at para. 97.

14. Simon V. Potter et al., "The Perspective of Defence Counsel on the Interplay Between Civil Class Action Claims and Criminal Prosecutions" in Annual Fall Conference on Competition Law 2000 (Ottawa: Juris Publishing, Inc., 2001) at 107.

15. Chadha, above note 2 and Price, above note 4.

16. Price, ibid

17. Indirect purchasers are purchasers one or more steps removed in the chain of distribution from the persons alleged to have engaged in the anticompetitive conduct. For example, in a case involving an alleged conspiracy to fix prices between manufacturers or distributors of a product, the direct purchaser may be a wholesaler, who in turn sells to retailers, who in turn sell to end-users or consumers. In this example, both the retailers and the consumers would be indirect purchasers of the product.

18. Kent E. Thomson & Linda M. Plumpton, "The Certification of Class Proceedings Involving Antitrust Claims by Indirect Purchasers" in Annual Fall Conference on Competition Law 2000 (Ottawa: Juris Publishing, Inc., 2001) at 76.

19. 392 U.S. 481 (1968) [Hanover Shoe].

20. 15 U.S.C. § 12– 27.

21. Hanover Shoe, above note 19 at 487.

22. Ibid. at 492–94.

23. 431 U.S. 720 (1977) [Illinois Brick].

24. Ibid. at 732.

25.. Ibid. at 746.

26. Law Society of Upper Canada v. Ernst & Young (2002), 59 O.R. (3d) 214 (S.C.J.), rev’d (2003), 65 O.R. (3d) 577 (C.A.), leave to appeal to S.C.C. refused (2003), 195 O.A.C. 400 (note) ( S.C.C.).

27. Ibid. (C.A.) at para. 50.

28. [2004] 2 S.C.R. 74.

29. Ibid. at para. 111.

30. Ibid. at paras. 204–5.

31. Ibid. at para. 197.

32. Chadha, above note 2.

33. Ibid. (S.C.J.) at 35.

34. Price, above note 4.

35. R.S.C. 1970, c. C-23.

36. Craig Jones, Theory of Class Actions (Toronto: Irwin Law Inc., 2003) at 117.

37. See, for example, the Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 5(1). See also British Columbia’s Class Proceedings Act, above note 1, s. 4; Saskatchewan’s The Class Actions Act, above note 1, s. 6; Newfoundland and Labrador’s Class Actions Act, above note 1, s. 5; Manitoba’s The Class Proceedings Act, above note 1, s. 4; and Alberta’s Class Proceedings Act, above note 1, s. 5. The threshold for certification is considerably lower in the province of Quebec, and this article does not address the certification requirements of the Quebec legislation.

38. Hollick, above note 10 at 172; Chadha (C.A.), above note 2 at para. 29; Taub v. Manufacturers Life Insurance Co. (1998), 40 O.R. (3d) 379 (Gen. Div.) at 380–81.

39. Kranjcec v. Ontario (2004), 69 O.R. (3d) 231 (S.C.J.) at 242.

40. Price, above note 4 at para. 25.

41. Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 and Peppiatt v. Nicol, [1998] O.J. No. 3370 (Gen. Div.). This test was articulated in Abdool v. Anaheim Management Ltd. (1995), 21 O.R. (3d) 453 (Div. Ct.) at 469 as follows:

(a) All allegations of fact, unless patently ridiculous or incapable of proof, must be accepted as proved;

(b) The defendant, in order to succeed, must show that it is plain and obvious beyond doubt that the plaintiffs could not succeed;

(c) The novelty of the cause of action will not militate against the plaintiffs; and

(d) The statement of claim must be read as generously as possible, with a view to accommodating any inadequacies in the form of the allegations due to drafting deficiencies.

42. Price, above note 4 at paras. 26–27.

43. Pearson v. Inco Ltd. (2002), 33 C.P.C. (5th) 264 (Ont. S.C.J.) at para. 84 [Pearson].

44. Bywater v. Toronto Transit Commission (1998), 27 C.P.C. (4th) 172 (Ont. Gen. Div.).

45. Ontario Class Proceedings Act, 1992, above note 37, s. 5(3).

46. Cloud v. Canada (A.G.) (2004), 73 O.R. (3d) 401 (C.A.) at para. 45, leave to appeal S.C.C. refused (sub nom. M.C.C. v. Canada (A.G.)), [2005] S.C.C.A. No. 50 [Cloud].

47. See, for example, Price, above note 4.

48. Homeowners would have been unable to determine whether their houses contained building materials using the pigments supplied by the defendants, rendering individual identification of plaintiffs impossible. The motions judge ruled that it seemed unlikely that damages would be assessed on an individual basis and therefore that the inefficiency of identifying individual class members was not a bar to certification: Chadha (S.C.J.), above note 2.

49. Chadha (Div. Ct.), above note 2 at 550 and Chadha (C.A.), above note 2 at 46.

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  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

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