The Court of Queen's Bench in Alberta has recently ruled in 321665 Alberta Ltd. v. ExxonMobil Canada Ltd,  on several issues relating to costs under section 36 of the Competition Act. The ruling follows an award of damages in a civil case involving a rare buyer-side conspiracy, brought under the pre-2009 section 45 of the Act.

By way of background, section 36 of the Competition Act provides a statutory cause of action to any person who has suffered loss or damage arising from the breach of any of the criminal provisions in Part VI of the Act. These criminal provisions include conspiracy, bid-rigging, misleading advertising, and deceptive telemarketing.

In its decision on the merits, released in May, 2011 (321665 Alberta Ltd. v. ExxonMobil Canada Ltd.,), the Court had ruled that Husky and Mobil violated section 45 of the Competition Act (the conspiracy provision) when they had decided in 1996 to single-source their acquisition of fluid hauling services for their properties in the remote Rainbow Lake region of Alberta, thereby depriving the plaintiff of the ability to compete for their business and – given their dominant position in the marketplace – unduly lessening competition among the two fleet fluid haulers in the region by putting one of them out of business.  The court awarded general damages of $5 million and punitive damages against each defendant of $500,000, but reserved the question of costs for a later date.

Private actions for damages under section 36 are not new, but the recent ruling touches on an important issue closely related to the bringing of such an action – costs. In particular, the ruling addresses five separate issues: entitlement to compound interest, the relevant interest period, investigation costs, the appropriate costs scale, and costs incurred because of a litigation loan.

Compound Interest: The plaintiff argued that the wording of section 36 justified an award of compound interest, but the judge found there was insufficient evidence to support this claim. He reasoned that there is limited jurisdiction to award compound interest in both common law and equity, and the plaintiff failed to meet both relevant tests. As well, the request was barred because the plaintiff failed to seek compound interest relief in its pleadings.

Interest Period: The judge also held that while the obligation to pay pre-judgment interest arises when the loss actually occurs, that period can be reduced if the plaintiff delays in prosecuting its claim. After a detailed review of the significant steps in the litigation, the judge deducted two years of pre-judgment interest from the plaintiff's award of damages at large.

Investigation Costs: Typically, a successful plaintiff may not claim pre-action investigation costs, however according to the Competition Act a party advancing a claim pursuant to section 36 may claim "the full cost to him of any investigation in connection with the matter." The court awarded investigation costs at $75,000, which was a fraction of the near million dollar sum claimed because the plaintiff's costs were insufficiently supported by evidence.

Costs Scale: The plaintiff's claim that the use of the term "full cost" in the statute should be interpreted to mean that the plaintiff can recover on a solicitor-client basis rather than the usual party and party basis was flatly rejected. The court stated that solicitor-client costs are reserved for exceptional circumstances and if Parliament wanted section 36 to be one of those cases, then it could have said so.

Litigation Loans: A claim for the cost of money borrowed to finance the litigation was denied.  The court relied on earlier Court of Queen's Bench of Alberta jurisprudence that held litigation loans were not recoverable.
 

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