It was 1983. The Police's Every Breath You Take was
top of the charts. Return of the Jedi was tearing up the
box office. And the Supreme Court of Canada released that seminal
case seared into every competition litigator's brain, Canada Cement
LaFarge Ltd. v B.C. Lightweight Aggregate. Canada
Cement laid out the definitive test for a tort of conspiracy,
including that the defendants' conduct has to be
"unlawful" (sort of like the protagonist in Every
Breath You Take). In that case, the plaintiff's civil
claim was based on guilty pleas by the defendants to charges of
conspiracy under the Combines Investigation Act (the
predecessor to the Competition Act).
Fast-forward to 2014. Another sci-fi adventure, Guardians of
the Galaxy, tops the box office. And a much less creepier
song, Happy by Pharrell Williams, is the #1 single.
Perhaps feeling somewhat rebellious given the zeitgeist , the B.C.
Court of Appeal noted, in the class action Wakelam v Johnson
& Johnson, that, in fact, plaintiffs likely cannot
base their civil conspiracy claim on breaches of the
Competition Act. Justice Newbury said that the
Competition Act did not create a "right of action
'at-large'" because it was a "well-integrated
scheme". To be sure, the court relied on the Supreme Court of
Canada's 1989 decision in General Motors of
Canada Ltd. v City National Leasing.
Perhaps sensing that the court had gotten a little ahead of
itself, a different panel of the same court rejected that finding less than
18 months later, ruling that, in fact, a conviction under the
Competition Act was good enough to be unlawful means for
the tort. Justice Saunders re-read Justice Newbury's decision
as only applying to claims for restitution.
That should have ended the debate. But no. Justice Perell of the
Ontario court, perhaps goaded by well-meaning defence lawyers, took
up the case,
finding that Parliament intended to exclude civil claims for
conspiracy based on breaches of the Competition Act.
The Ontario Court of Appeal, perhaps sensing some dysfunction in
the law, has decided to end the debate. Fanshawe College of
Applied Arts and Technology v AU Optronics Corporation
deals with a conspiracy in the LCD industry. The plaintiff moved to
add a new plaintiff and make some cosmetic amendments. The
defendant opposed the amendments, in part on the basis that civil
conspiracy claims can't be based on Competition Act
breaches. The Court of Appeal, in probably less ink than it took to
write Drake's One Dance (last week's #1), allowed
the amendments, finding that Parliament never intended to take away
the civil cause of action by allowing for statutory causes of
action. In an arguably obiter comment, the Court of Appeal
also said Justice Perell was wrong in Shah.
The Divisional Court granted the plaintiff leave to appeal the
decision in Shah just three days before. This issue might
still be litigated in other appellate courts and, eventually, the
Supreme Court of Canada. For now though, the lesson appears to be
that, at least in Ontario, the defence to a conspiracy tort claim
based on Competition Act convictions cannot be that such
claims are precluded by the statutory scheme.
Oh, and in case you're wondering, Finding Dory
leads the 2016 box office so far.
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