Canada: The Private Competition Enforcement Review - Canada


i Parasitic causes of action under review

Plaintiffs in class actions based on violations of the Competition Act typically plead a number of common law and equitable causes of action in addition to a claim based on the statutory cause of action provided for in Section 36 of the Competition Act. They do so because these causes of action hold out the potential for greater recovery than Section 36. For example, Section 36 requires that the plaintiffs prove loss. Waiver of tort, however, potentially does not require any showing of loss at all. Similarly, Section 36 is expressly limited to damages that can be proven, thus ruling out punitive damages. Common law and equitable claims are not so limited.

The causes of action typically pleaded are unlawful interference with economic relations, tort of conspiracy, and waiver of tort. They are parasitic because all (except for one branch of the tort of conspiracy) depend on a showing of a breach of the Competition Act as a necessary unlawful element.

Recently, courts have begun to question whether these common law and equitable claims should be allowed at all. The Competition Act itself provides for a cause of action for breaches of some of its provisions, and other remedies for beaches of other provisions. The question naturally arises therefore: is the recovery provided for in the Competition Act a complete code, such that these other causes of action are not needed, and not permissible In Wakelam v. Wyeth Consumer Healthcare,2 the British Columbia Court of Appeal held that Parliament intended the Competition Act to be a complete code, thus excluding remedies apart from those provided in the Act.

Following this decision, the BC Supreme Court struck claims of unlawful conspiracy, unlawful interference with economic interests, and constructive trust in Watson v. Bank of America Corp,3 but certified a class action against Visa and MasterCard, major Canadian banks, and other financial institutions, alleging that the credit card interchange fees and rules breach the Competition Act. Claims based on breaches of the criminal price maintenance provisions were statute-barred, since these provisions were repealed more than two years before the action was launched, the court held.

However, less than four months later, another BC Supreme Court judge refused to strike similar claims in a case alleging that Microsoft conspired with various computer manufacturers to gain a monopoly over PC operating systems.4 The judge said that Wakelam conflicted with the recent SCC decision on the tort of unlawful interference with economic relations in A.I. Enterprises Ltd. v. Bram Enterprises Ltd.,5 because that case referred to an earlier case holding that a breach of a predecessor to the Competition Act could support the tort of conspiracy. A third BC judge took the same view in Fairhurst v. Anglo American PLC,6 and certified a class action alleging that De Beers and diamond companies conspired to fix prices for diamonds.

The issue is now before the BC Court of Appeal in Watson.

ii Class action plaintiffs can obtain wiretap evidence

Class-action plaintiffs can obtain disclosure of wiretap evidence obtained by the Competition Bureau, the Supreme Court of Canada held in Imperial Oil v Jacques.7 The plaintiffs were seeking production from the Competition Bureau of wiretap intercepts it obtained in the course of its investigation into retail gasoline price fixing in Quebec. These intercepts were a critical piece of evidence in a trial of three accused. They demonstrated that the conspirators used a telephone tree to disseminate information about price increases.

The Supreme Court rejected two bases advanced by the defendants for protecting the wiretaps from disclosure. First, provisions in the Competition Act protecting the confidentiality of information obtained by the Commissioner did not apply to wiretap evidence. Second, while the wiretap provisions of the Criminal Code protect the confidentiality of the wiretaps, they contain an exemption for their use in court proceedings that applied here.

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1 W Michael G Osborne and Michael Binetti are partners and Michelle E Booth, David Vaillancourt and Fiona Campbell are associates at Affleck Greene McMurtry LLP.

2 2014 BCCA 36.

3 2014 BCSC 532.

4 Pro-Sys Consultants Ltd. v. Microsoft Corp., 2014 BCSC 1280.

5 2014 SCC 12.

6 2014 BCSC 2270.

7 2014 SCC 66.

Originally published by Law Business Research Ltd.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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W. Michael G. Osborne
Michael Binetti
David N. Vaillancourt
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