The Fanshawe College of Applied Arts and Technology v. AU Optronics Corporation et al.
[Indexed as: Fanshawe College of Applied Arts and Technology v. AU Optronics Corp.]
Ontario Reports
Court of Appeal for Ontario,
Hoy A.C.J.O., Laskin and Hourigan JJ.A.
August 11, 2016
132 O.R. (3d) 81 | 2016 ONCA 621
Case Summary
Appeals — Jurisdiction — Final or interlocutory order — Plaintiff asserting claim in civil conspiracy and claim pursuant to s. 36 of Competition Act — Defendants moving for summary judgment dismissing action as statute-barred — Motion judge finding that there was genuine issue for trial with respect to discoverability — That order being interlocutory — Defendants granted leave to appeal to Divisional Court solely on issue of whether discoverability principle applies to limitation period in s. 36(4)(a)(i) of Competition Act — Order made under s. 6 of Courts of Justice Act consolidating that appeal with plaintiff's appeal to Court of Appeal from order on pleadings motion — Consolidation order not having effect of expanding issues which could be heard on defendants' appeal — Court of Appeal not having jurisdiction to hear appeal from motion judge's ruling that there was genuine issue for trial regarding whether limitation period for civil conspiracy claim had expired — Competition Act, R.S.C. 1985, c. C-34, s. 36 — Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6.
Civil procedure — Pleadings — Amendment — Plaintiffs bringing proposed class action alleging price fixing conspiracy in LCD industry — Plaintiff moving to amend statement of claim to add direct purchaser as plaintiff — Motion judge erring in refusing to grant leave on ground that limitation period for direct purchaser's claim had expired — Direct purchaser having always been member of class.
Limitations — Discoverability — Statutory limitation periods — Discoverability principle applying to limitation period in s. 36(4)(a)(i) of Competition Act — Competition Act, R.S.C. 1985, c. C-34, s. 36(4)(a)(i).
Torts — Conspiracy — Weight of appellate authority supporting view that breach of s. 45 of Competition Act may serve as unlawful means for civil conspiracy claim — Competition Act, R.S.C. 1985, c. C-35, s. 45.
The plaintiff brought a proposed class action in which it alleged a price-fixing conspiracy in the liquid crystal display ("LCD") industry. It asserted a claim in civil conspiracy and a claim pursuant to s. 36 of the Competition Act, predicated on a breach of s. 45 of the Competition Act (which makes conspiracies to fix prices illegal). The defendants brought a motion for summary judgment dismissing the action as statute-barred. The motion judge dismissed the motion, holding that there was a genuine issue for trial with respect to the applicability of the discoverability principle. The defendants appealed to the Court of Appeal. The court found that the order was interlocutory and that the proper appeal route was to seek leave to appeal in the Divisional Court. The defendants did so and was granted leave to appeal solely on the issue of whether the discoverability principle applies to the limitation period in s. 36(4)(a)(i) of the Competition Act. Meanwhile, the plaintiff had moved for leave to amend its statement of claim to add [page82 ]a direct purchaser as a representative plaintiff, after the Supreme Court of Canada ruled in a series of unrelated cases that only direct purchasers, as opposed to indirect purchasers like the plaintiff, could assert price-fixing claims. The motion was dismissed, and the plaintiff appealed to the Court of Appeal. An order was made under s. 6 of the Courts of Justice Act consolidating the two appeals.
Held, the defendants' appeal should be dismissed; the plaintiff's appeal should be allowed.
The court did not have jurisdiction to consider an appeal by the defendants of the motion judge's ruling that there was a genuine issue for trial regarding whether the limitation period had expired for the civil conspiracy claim. Leave to appeal was not granted on that issue, and the consolidation order did not have the effect of expanding the issues which could be heard on the defendant's appeal.
The motion judge did not err in finding that the discoverability principle applies to the limitation period in s. 36(4)(a)(i) of the Competition Act. A statutory limitation period will generally be subject to the discoverability principle when the running of the limitation period is linked either to the plaintiff's knowledge about an event or to an event related to the plaintiff's cause of action. The limitation period in s. 36(4)(a)(i) is triggered by an event related to the underlying cause of action -- specifically, conduct contrary to Part VI of the Competition Act.
The motion judge erred in refusing leave to amend the statement of claim on the basis that the limitation period for the direct purchaser's claim had expired. The direct purchaser had always been a member of the class.
It is not plain and obvious that a breach of s. 45 of the Competition Act cannot serve as the unlawful means for a civil conspiracy claim. The weight of appellate authority is to the contrary.
Apotex Inc. v. Hoffmann La-Roche Ltd., 2000 16984 (ON CA), [2000] O.J. No. 4732, 195 D.L.R. (4th) 244, 139 O.A.C. 63, 9 C.P.R. (4th) 417, 102 A.C.W.S. (3d) 70 (C.A.); Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd., 1983 23 (SCC), [1983] 1 S.C.R. 452, [1983] S.C.J. No. 33, 145 D.L.R. (3d) 385, 47 N.R. 191, [1983] 6 W.W.R. 385, 21 B.L.R. 254, 24 C.C.L.T. 111, 72 C.P.R. (2d) 1, 19 A.C.W.S. (2d) 352; Chadha v. Bayer Inc., 1998 14791 (ON SC), [1998] O.J. No. 6419, 82 C.P.R. (3d) 202, 81 A.C.W.S. (3d) 46 (Gen. Div.); Grenier v. Canadian General Insurance Co. (1999), 1999 2156 (ON CA), 43 O.R. (3d) 715, [1999] O.J. No. 852, 118 O.A.C. 204, 9 C.C.LI. (3d) 225, 32 C.P.C. (4th) 267, 87 A.C.W.S. (3d) 159 (C.A.); Peixeiro v. Haberman, 1997 325 (SCC), [1997] 3 S.C.R. 549, [1997] S.C.J. No. 31, 151 D.L.R. (4th) 429, 217 N.R. 371, J.E. 97-1825, 103 O.A.C. 161, 46 C.C.L.I. (2d) 147, 12 C.P.C. (4th) 255, 30 M.V.R. (3d) 41, 74 A.C.W.S. (3d) 117; Ryan v. Moore, [2005] 2 S.C.R. 53, [2005] S.C.J. No. 38, 2005 SCC 38, 254 D.L.R. (4th) 1, 334 N.R. 355, J.E. 2005-1188, 247 Nfld. & P.E.I.R. 286, [2005] R.R.A. 694, 25 C.C.L.I. (4th) 1, 32 C.C.L.T. (3d) 1, 18 E.T.R. (3d) 163, 139 A.C.W.S. (3d) 1089; Shah v. LG Chem Ltd., [2015] O.J. No. 5168, 2015 ONSC 6148, 390 D.L.R. (4th) 87, 79 C.P.C. (7th) 72, 258 A.C.W.S. (3d) 51 (S.C.J.) [Leave to appeal to the Divisional Court granted [2016] O.J. No. 4170, 2016 ONSC 4670 (Div. Ct.)]; Waschkowski v. Hopkinson Estate (2000), 2000 5646 (ON CA), 47 O.R. (3d) 370, [2000] O.J. No. 470, 184 D.L.R. (4th) 281, 129 O.A.C. 286, 44 C.P.C. (4th) 42, 32 E.T.R. (2d) 308, 95 A.C.W.S. (3d) 208 (C.A.); Watson v. Bank of America Corp., [2015] B.C.J. No. 1775, 2015 BCCA 362, 389 D.L.R. (4th) 577, 376 B.C.A.C. 153, 79 B.C.L.R. (5th) 1, [2016] 3 W.W.R. 629, 256 A.C.W.S. (3d) 275; [page83 ]Westfair Foods Ltd. v. Lippens Inc., 1989 5257 (MB CA), [1989] M.J. No. 572, 64 D.L.R. (4th) 335, [1990] 2 W.W.R. 42, 61 Man. R. (2d) 282, 30 C.P.R. (3d) 209, 18 A.C.W.S. (3d) 399 (C.A.) [Leave to appeal to S.C.C. refused [1990] S.C.C.A. No. 17, 65 D.L.R. (4th) viii, 106 N.R. 16n, [1990] 4 W.W.R. lxii, 65 Man. R. (2d) 80n, 30 C.P.R. (3d) 209n], consd
Wakelam v. Johnson & Johnson, [2014] B.C.J. No. 167, 2014 BCCA 36, 350 B.C.A.C. 70, 54 B.C.L.R. (5th) 7, [2014] 5 W.W.R. 7, 237 A.C.W.S. (3d) 309 [Leave to appeal to S.C.C. refused [2014] 2 S.C.R. x, [2014] S.C.C.A. No. 125], not folld
Other cases referred to
A.I. Enterprises Ltd. v. Bram Enterprises Ltd., [2014] 1 S.C.R. 177, [2014] S.C.J. No. 12, 2014 SCC 12, 453 N.R. 273, 2014EXP-416, J.E. 2014-216, EYB 2014-232319, 7 C.C.L.T. (4th) 1, 366 D.L.R. (4th) 573, 48 C.P.C. (7th) 227, 21 B.L.R. (5th) 173, 416 N.B.R. (2d) 1, 237 A.C.W.S. (3d) 551; Central Trust Co. v. Rafuse, 1986 29 (SCC), [1986] 2 S.C.R. 147, [1986] S.C.J. No. 52, 31 D.L.R. (4th) 481; Fanshawe College of Applied Arts and Technology v. AU Optronics Corp., [2015] O.J. No. 6137, 2015 ONCA 808; Fanshawe College of Applied Arts and Technology v. AU Optronics Corp., [2016] O.J. No. 3, 2016 ONSC 17 (S.C.J.); Fehr v. Jacob, 1993 4407 (MB CA), [1993] M.J. No. 135, [1993] 5 W.W.R. 1, 85 Man. R. (2d) 63, 14 C.C.L.T. (2d) 200, 14 C.P.C. (3d) 364, 39 A.C.W.S. (3d) 693 (C.A.); Gendron v. Supply & Services Union of the Public Service Alliance of Canada, Local 50057, 1990 110 (SCC), [1990] 1 S.C.R. 1298, [1990] S.C.J. No. 55, 109 N.R. 321, [1990] 4 W.W.R. 385, J.E. 90-925, 66 Man. R. (2d) 81, 44 Admin. L.R. 149, 90 CLLC Â14,020 at 12172, 21 A.C.W.S. (3d) 289; General Motors of Canada Ltd. v. City National Leasing Ltd., 1989 133 (SCC), [1989] 1 S.C.R. 641, [1989] S.C.J. No. 28, 58 D.L.R. (4th) 255, 93 N.R. 326, J.E. 89-644, 32 O.A.C. 332, 43 B.L.R. 225, 24 C.P.R. (3d) 417, 7 W.C.B. (2d) 100; Grand River Enterprises v. Burnham, 2005 6368 (ON CA), [2005] O.J. No. 952, 197 O.A.C. 168, 10 C.P.C. (6th) 136, 137 A.C.W.S. (3d) 940 (C.A.); Locking v. Armtec Infrastructure Inc., [2012] O.J. No. 6113, 2012 ONSC 7274 (Div. Ct.); Orpen v. Roberts, 1925 2 (SCC), [1925] S.C.R. 364, [1925] S.C.J. No. 14; R. v. Imperial Tobacco Canada Ltd., [2011] 3 S.C.R. 45, [2011] S.C.J. No. 42, 2011 SCC 42, 308 B.C.A.C. 1, 419 N.R. 1, 2011EXP-2380, J.E. 2011-1326, 335 D.L.R. (4th) 513, 21 B.C.L.R. (5th) 215, 25 Admin. L.R. (5th) 1, 86 C.C.L.T. (3d) 1, [2011] 11 W.W.R. 215, 83 C.B.R. (5th) 169, 205 A.C.W.S. (3d) 92; Stewart v. Park Manor Motors Ltd., 1967 243 (ON CA), [1968] 1 O.R. 234, [1967] O.J. No. 1117, 66 D.L.R. (2d) 143, 68 CLLC Â14,087 at 380 (C.A.); Wong v. Sony of Canada Ltd. (2001), 9 C.P.C. (5th) 122 (Ont. S.C.J.)
Statutes referred to
Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2 [as am.]
Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 28(1)
Combines Investigation Act, R.S.C. 1970, c. C-23, s. 32(1)(c)
Competition Act, R.S.C. 1985, c. C-34, ss. 36 [as am.], (1), (4), (a), (i), (ii), Part VI [as am.], ss. 45 [as am.], 47 [as am.], 52 [as am.], 52.1 [as am.], 61 [rep.], 62 [as am.]
Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(2) [as am.], (3) [as am.]
Highway Traffic Act, R.S.O. 1990, c. H.8, s. 206 [rep.], (1) [rep.]
Insurance Act, R.S.O. 1990, c. I.8, s. 258(2) [rep.]
Limitations Act, 2002, S.O. 2002, c. 24, Sch. B [as am.], s. 5(1)(a), (2)
Survival of Actions Act, R.S.N.L. 1990, c. S-32, s. 5 [as am.]
Trustee Act, R.S.O. 1990, c. T.23, s. 38(3)
Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 26.01, 62.02(4)
Authorities referred to
Mew, Graeme, Debra Rolph and Daniel Zacks, The Law of Limitations, 3rd ed. (Toronto: LexisNexis Canada Inc., 2016) [page84 ]
APPEAL by the defendants from the order of Grace J., [2015] O.J. No. 1579, 2015 ONSC 2046 (S.C.J.) dismissing a motion for summary judgment; APPEAL by the plaintiff from the order of Grace J., [2015] O.J. No. 2686, 2015 ONSC 3414 (S.C.J.) dismissing a motion for leave to amend statement of claim.
Charles M. Wright, Paul Bates and Reidar Mogerman, for Fanshawe College of Applied Arts and Technology.
John Callaghan and Alex Zavaglia, for HannStar Display Corporation.
The judgment of the court was delivered by
HOURIGAN J.A.: —
Overview
[1] There are two appeals before the court. They arise in the context of a putative class action where the representative plaintiff, Fanshawe College of Applied Arts and Technology ("Fanshawe"), asserts that it and other members of the proposed class were victims of a price-fixing conspiracy in the liquid crystal display ("LCD") industry.
[2] In the first appeal, the defendant HannStar Display Corporation ("HannStar") appeals the order of the motion judge dismissing its motion for summary judgment (the "HannStar appeal").
[3] In the second appeal, Fanshawe appeals the order of the motion judge dismissing its motion for leave to amend the statement of claim (the "Fanshawe appeal").
[4] For the reasons that follow, I would dismiss the HannStar appeal and grant the Fanshawe appeal.
Background Facts
[5] On December 13, 2006, news agencies around the world reported that various LCD manufacturers were being investigated regarding allegations of price-fixing in their industry. Media coverage of the investigations continued throughout 2007. Various class actions in the United States followed.
[6] The first proposed class action in Canada alleging price-fixing in the LCD industry was commenced in British Columbia on March 6, 2007. AU Optronics Corporation ("AU") and HannStar, among others, were named as defendants. Both AU and HannStar are Taiwanese corporations.
[7] In Ontario, the Siskinds law firm commenced a class action on May 2, 2007 (the "first Ontario action"). None of the defendants in the first Ontario action were based in Taiwan. [page85 ]However, AU and HannStar, among others, were named in the body of the statement of claim as alleged co-conspirators. Siskinds says that the Taiwanese companies were not made defendants because they did not want to impede the progress of the action while service in Taiwan was being effected.
[8] Over two years later, on July 20, 2009, this action was commenced against various Taiwanese corporations, with Fanshawe serving as the proposed representative plaintiff. AU and HannStar were named as defendants. In this action, Fanshawe asserts a claim in civil conspiracy and a claim pursuant to s. 36 of the Competition Act, R.S.C. 1985, c. C-34, predicated on a breach of s. 45 of the Act, the provision that makes conspiracies to fix prices illegal. The conspiracy period was alleged to be from January 1, 1998 to December 11, 2006.
[9] AU and HannStar brought a motion for summary judgment, asserting that the action was time-barred pursuant to the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, and pursuant to s. 36(4)(a) of the Competition Act and was an abuse of process. The parties filed affidavit material on the motion. Fanshawe also served a motion to amend its claim, including amendments to add MASS Engineered Design Inc. ("Mass") as another representative plaintiff.
[10] In an affidavit filed on behalf of Fanshawe in the summary judgment motion, David Smith, Fanshawe's manager of retail services, swore that Fanshawe became aware of a potential claim in January 2008 when a lawyer at Siskinds retained on unrelated matters informed Fanshawe that it might have been impacted by the alleged conspiracy. Fanshawe retained Siskinds on January 24, 2008 to pursue the litigation on its behalf. However, during his cross-examination on his affidavit, Mr. Smith testified that Fanshawe first had discussions about this litigation with Siskinds in the spring of 2007, more than two years before July 2009 when the action was commenced. After the cross-examination, Fanshawe brought a motion to file a supplementary affidavit clarifying the timing of the initial discussions with Siskinds. The motion judge denied that motion.
[11] The motion for summary judgment was heard on November 13, 2014, and was dismissed in written reasons released on March 31, 2015 [2015 ONSC 2046, [2015] O.J. No. 1579]. With respect to the civil conspiracy claim, the motion judge ruled that Fanshawe's evidence demonstrated that there is a genuine issue requiring a trial as to whether the presumption of knowledge set forth in s. 5(2) of the Limitations Act had been rebutted. He concluded that there was not sufficient clarity in the evidence regarding whether Fanshawe knew or ought to have known of the [page86 ]elements set forth in s. 5(1)(a) of the Limitations Act to make a dispositive finding based on the evidence before him. The motion judge also found that the discoverability rule applies to the limitation period in s. 36(4)(a) of the Competition Act. Finally, he held that commencing this action more than two years after the Ontario action, an action involving the same putative class and alleged co-conspirators, was not an abuse of process.
[12] The motion for leave to amend the statement of claim in this action was heard on February 27, 2015, and was dismissed in written reasons dated May 28, 2015 [2015 ONSC 3414, [2015] O.J. No. 2686]. The motion judge denied leave to amend on the basis that the amendments constituted an expansion of the claims asserted and were statute-barred.
[13] Fanshawe commenced an appeal in this court. AU and HannStar also brought an appeal to this court.
[14] In an endorsement dated November 24, 2015, this court quashed AU and HannStar's appeal on the basis that the order below is interlocutory and, therefore, leave must be sought for the appeal to be heard by Divisional Court. Fanshawe conceded that nothing in the order dismissing the motion for summary judgment, or in the reasons of the motion judge in support of that order, precludes AU and HannStar "from advancing at trial their arguments regarding s. 36(4) of the Competition Act or abuse of process as substantive defences or otherwise": Fanshawe College of Applied Arts and Technology v. AU Optronics Corporation, [2015] O.J. No. 6137, 2015 ONCA 808, at para. 1.
[15] AU and HannStar then brought a motion in writing in Divisional Court for leave to appeal the order of the motion judge dismissing the summary judgment motion to that court. Rady J. granted leave to appeal [[2016] O.J. No. 3, 2016 ONSC 17 (S.C.J.)]. As I will discuss below, there is some confusion regarding the scope of her order.
[16] The parties then argued two motions in this court before Huscroft J.A. AU and HannStar brought a motion to consolidate the HannStar appeal with the Fanshawe appeal. That motion was granted. Fanshawe brought a motion to strike paragraphs in AU's and HannStar's factums in the Fanshawe appeal on the basis that the factums raised issues that went beyond the scope of the motion judge's reasons. That motion was dismissed. However, Fanshawe was granted leave to file a reply factum on the additional issue raised by the respondents in the Fanshawe appeal: whether a breach of s. 45 of the Competition Act can serve as the unlawful means in a civil conspiracy claim.
[17] Prior to the hearing of the appeals, AU entered into a settlement agreement with Fanshawe. [page87 ]
Issues
[18] The issues raised on these appeals and my conclusions on each issue may be summarized as follows:
(i) Does this court have the jurisdiction to consider the appeal of the motion judge's ruling that there is a genuine issue for trial regarding whether the limitation period has expired for the civil conspiracy claim?
No. The order was interlocutory. An appeal lay to the Divisional Court with leave. On the motion for leave, the motion judge granted leave on the sole issue of whether the discoverability principle applied to s. 36(4)(a)(i) of the Competition Act. Huscroft J.A. ordered that the Fanshawe appeal and the HannStar appeal be heard together in this court. He only had jurisdiction to combine the Fanshawe appeal with what was pending in the Divisional Court. Because leave had not been granted on the issue of the expiry of the limitation period for the conspiracy claim, that issue could not be combined with the Fanshawe appeal. Accordingly, we have no jurisdiction to hear the appeal of the motion judge's ruling on that issue.
(ii) Did the motion judge err in finding that the discoverability principle applies to the limitation period found in s. 36(4)(a)(i) of the Competition Act?
No. Subsection 36(4)(a)(i) is subject to the discoverability principle. A statutory limitation period will generally be subject to the discoverability principle when the running of the limitation period is linked either to the plaintiff's knowledge about an event or to an event related to the plaintiff's cause of action. The limitation period in s. 36(4)(a)(i) is triggered by an event related to the underlying cause of action -- specifically, conduct contrary to Part VI of the Competition Act. Therefore, it is subject to discoverability.
(iii) Did the trial judge err in refusing to grant leave to amend the statement of claim?
Yes. The motion judge erroneously concluded that the proposed amendments to the statement of claim had the effect of broadening the subject matter of the claim from LCD products to LCD products and LCD panels. In fact, both items were always part of the claim. The motion judge erred, therefore, in refusing to grant leave to amend. [page88 ]
(iv) Is it plain and obvious that a breach of s. 45 of the Competition Act cannot serve as the unlawful means for a civil conspiracy claim?
No. Prior to the enactment of what is now s. 36 of the Competition Act, a breach of Part VI of the Act could serve as the unlawful means in a civil conspiracy. If Parliament intended to take away this existing common law right, it would have to have done so in the clearest of terms. It did not. The weight of appellate authority on the point, including a case from this court, supports the view that a breach of Part VI of the Competition Act may serve as the unlawful means in a civil conspiracy.
Analysis
(i) Jurisdiction
[19] At the outset of oral argument, the panel raised with counsel for HannStar whether we had jurisdiction to hear his client's appeal of the ruling that there was a genuine issue requiring a trial regarding whether Fanshawe's civil conspiracy claim was statue-barred. We heard argument on both this jurisdictional point and the merits of HannStar's appeal on this issue.
[20] As mentioned above, this appeal has an unusual procedural history. AU and HannStar first brought their appeal to this court. We found that the appeal was interlocutory. Therefore, the proper appeal route was to seek leave to appeal in the Divisional Court. AU and HannStar then brought a motion before a single judge of the Divisional Court, Rady J.
[21] It is worth reviewing in some detail Rady J.'s endorsement because there is confusion regarding its effect. After reviewing the test for leave to appeal an interlocutory order to the Divisional Court in rule 62.02(4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, she found the following [at paras. 7 and 8]:
First however, it is important to note that the motions judge made no final determination with respect to the limitation issues. Rather, he concluded that he was unable to determine when the plaintiff knew of its cause of action on the strength of the record before him. The issues remain live to be fully litigated either at the common issues trial or any trial of individual issues. This, in my view, tends to militate against granting leave to appeal.
However, I am persuaded that leave should be granted with respect to whether discoverability applies to the limitation period in the Competition Act. The motions judge concluded that it did[.][page89 ]
[22] Rady J. then went on to review the motion judge's analysis of the issue and the conflicting jurisprudence on the issue, concluding, at para. 10, that "it is apparent that there is conflicting authority on this issue, which the motions judge recognized". She then concluded as follows [at para. 11]:
I am persuaded that it is desirable that leave be granted. The question of whether s. 36(4) of the Competition Act is subject to discoverability is a question of statutory interpretation that is of considerable importance to the competition class action bar. It appears to me that the law is unsettled on the point. It would therefore be helpful to have appellate jurisprudence on the issue.
[23] Unfortunately, when the order was taken out it provided only "that leave to appeal is granted" and did not specify the issue for which leave was granted.
[24] The law is clear that an appeal lies from an order and not from the trial judge's reasons for that order. For example, a party may not appeal an unfavourable conclusion drawn by the trial judge in his or her reasons that was not part of the order binding the parties: Grand River Enterprises v. Burnham, 2005 6368 (ON CA), [2005] O.J. No. 952, 10 C.P.C. (6th) 136 (C.A.), at para. 10.
[25] In the present case, the order at issue is not the order being appealed from, but the order defining the issues for which leave to appeal has been granted. A review of the order, in the context of the reasons, makes clear that it is incompatible with its underlying rationale. Having reviewed the reasons, I conclude that Rady J. intended to grant leave to appeal on the discrete issue of whether the discoverability principle applies to the limitation period in s. 36(4).
[26] On an appeal of an interlocutory order in the Divisional Court, an appellant is restricted to arguing the issues on which it was granted leave to appeal. It may not raise additional issues on which it was not granted leave: see Locking v. Armtec Infrastructure Inc., [2012] O.J. No. 6113, 2012 ONSC 7274 (Div. Ct.), at paras. 16-18.
[27] The Court of Appeal's power to consolidate appeals and its complementary power to transfer appeals are found in ss. 6(2) and 6(3) of the Courts of Justice Act, R.S.O. 1990, c. C.43, which provide as follows:
6(2) The Court of Appeal has jurisdiction to hear and determine an appeal that lies to the Divisional Court or the Superior Court of Justice if an appeal in the same proceeding lies to and is taken to the Court of Appeal.
(3) The Court of Appeal may, on motion, transfer an appeal that has already been commenced in the Divisional Court or the Superior Court of Justice to the Court of Appeal for the purpose of subsection (2). [page90 ]
[28] Until the motion before Rady J. was heard, there was no appeal in the Divisional Court because leave had not been granted. The result of her order was that an appeal restricted to the issue of the applicability of the discoverability principle to s. 36(4)(a)(i) of the Competition Act was before the Divisional Court.
[29] Huscroft J.A. made an order consolidating the appeals but that order was necessarily restricted to the proceedings that were pending at the time of his order. He had no statutory authority to, and did not purport to, consolidate appeals that were not extant at the time of his order. Accordingly, this court has no jurisdiction to hear any issue that was not before the Divisional Court.
[30] To be clear, if the appeal had stayed in the Divisional Court, HannStar would have been restricted to arguing the issue on which it received leave to appeal. An order of this court consolidating appeals and transferring a Divisional Court appeal does not have the effect of expanding the issues on the appeal.
[31] Before leaving this part of the analysis, I note that the merits of the issue were argued before us. HannStar raised concerns about the correctness of the trial judge's analysis. Those concerns will have to be addressed at trial.
(ii) Discoverability and s. 36(4)(a)(i) of the [Competition Act](https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-c-34/latest/rsc-1985-c-c-34.html)
[32] The discoverability principle is a common law rule providing that "a cause of action arises for purposes of a limitation period when the material facts on which it is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence": Central Trust Co. v. Rafuse, 1986 29 (SCC), [1986] 2 S.C.R. 147, [1986] S.C.J. No. 52, at p. 224 S.C.R.; see, also, Graeme Mew, Debra Rolph and Daniel Zacks, The Law of Limitations, 3rd ed. (Toronto: LexisNexis Canada Inc., 2016), at p. 75.
[33] Discoverability is also an interpretive rule relevant to the construction of limitation statutes: Ryan v. Moore, [2005] 2 S.C.R. 53, [2005] S.C.J. No. 38, 2005 SCC 38, at para. 23. As explained below, it provides certain presumptions for courts interpreting statutory limitation periods.
[34] The approach for determining whether a particular statutory limitation period is subject to the discoverability principle was discussed by Twaddle J.A. in Fehr v. Jacob, 1993 4407 (MB CA), [1993] M.J. No. 135, 14 C.C.L.T. (2d) 200 (C.A.), at p. 206 C.C.L.T.:
[T]he judge-made discoverability rule is nothing more than a rule of construction. Whenever a statute requires an action to be commenced within a specified time from the happening of a specific event, the statutory language [page91 ]must be construed. When time runs from "the accrual of the cause of action" or from some other event which can be construed as occurring only when the injured party has knowledge of the injury sustained, the judge-made discoverability rule applies. But, when time runs from an event which clearly occurs without regard to the injured party's knowledge, the judge-made discoverability rule may not extend the period the legislature has prescribed.
The Supreme Court of Canada has endorsed this passage in Peixeiro v. Haberman, 1997 325 (SCC), [1997] 3 S.C.R. 549, [1997] S.C.J. No. 31, at para. 37, and in Ryan, at para. 23.
[35] Ryan is the latest statement from the Supreme Court of Canada on this issue. In that decision, at para. 24, Bastarache J. concluded as follows:
Thus, the Court of Appeal of Newfoundland and Labrador is correct in stating that the rule is "generally" applicable where the commencement of the limitation period is related by the legislation to the arising or accrual of the cause of action. The law does not permit resort to the judge-made discoverability rule when the limitation period is explicitly linked by the governing legislation to a fixed event unrelated to the injured party's knowledge or the basis of the cause of action.
[Citation omitted]
[36] The applicability of discoverability is a matter of statutory construction. The jurisprudence noted above only provides presumptions and, in Ryan, at para. 23, Bastarache J. cautioned against applying the principle automatically or "systematically without a thorough balancing of competing interests".
[37] With these general principles in mind, I turn to a consideration of the limitation period in s. 36(4) (a)(i), which provides the following:
36(4) No action may be brought under subsection (1),
(a) in the case of an action based on conduct that is contrary to any provision of Part VI, after two years from
(i) a day on which the conduct was engaged in, or
(ii) the day on which any criminal proceedings relating thereto were finally disposed of,
whichever is the later[.]
[38] I begin by discussing Ryan and Waschkowski v. Hopkinson Estate (2000), 2000 5646 (ON CA), 47 O.R. (3d) 370, [2000] O.J. No. 470 (C.A.), both relied upon by HannStar, where courts found that the limitation period in issue was not subject to discoverability.
[39] Ryan considered the limitation period in s. 5 of the Survival of Actions Act, R.S.N.L. 1990, c. S-32, which linked the limitation period to the granting of letters of probate or the death of a defendant. In Waschkowski, this court considered s. 38(3) of [page92 ]the Trustee Act, R.S.O. 1990, c. T.23, which linked the limitation period to the death of a deceased.
[40] In both cases, the courts noted that the event that triggered the running of the limitation period at issue -- the issuing of letters probate or the death of the defendant -- did not affect the plaintiff's cause of action and the plaintiff's knowledge of the event at issue was irrelevant to their cause of action: Ryan, at para. 32; Waschkowski, at para. 8. In contrast, the "conduct" mentioned in s. 36(4) (a)(i) is not unrelated to the claimant's cause of action; rather, it is the basis for the plaintiff's claim.
[41] I turn now to a consideration of Peixeiro and of Grenier v. Canadian General Insurance Co. (1999), 1999 2156 (ON CA), 43 O.R. (3d) 715, [1999] O.J. No. 852 (C.A.), two cases where courts found that the limitation period in issue was subject to discoverability.
[42] In Peixeiro, the limitation period is similar to the one at issue in the present case. There, the Supreme Court considered what was s. 206(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8, which provided that any action for damages caused by a motor vehicle accident had to be brought within "two years from the time when the damages were sustained". The court concluded that the discoverability principle applied. Major J.'s comments, at para. 38, are instructive:
The appellant submitted here that the general rule of discoverability was ousted because the legislature used the words "damages were sustained", rather than the date "when the cause of action arose". It is unlikely that by using the words "damages were sustained", the legislature intended that the determination of the starting point of the limitation period should take place without regard to the injured party's knowledge. It would require clearer language to displace the general rule of discoverability. The use of the phrase "damages were sustained" rather than "cause of action arose", in the context of the HTA, is a distinction without a difference. The discoverability rule has been applied by this Court even to statutes of limitation in which plain construction of the language used would appear to exclude the operation of the rule. Kamloops, supra, dealt in part with s. 739 of the Municipal Act, R.S.B.C. 1960, c. 255, which required that notice should be given within two months "from and after the date on which [the] damage was sustained". However, this Court applied the discoverability rule even with respect to this section.
(Citation omitted)
[43] Subsection 36(4)(a)(i) links the limitation period to conduct that gives rise to any damage or loss. In that way, it is similar to the former s. 206 of the Highway Traffic Act, which linked the limitation period to damages caused by a motor vehicle accident.
[44] Also instructive is this court's decision in Grenier in which the issue was whether the discoverability principle applied to the old s. 258(2) of the Insurance Act, R.S.O. 1990, c. I.8, which [page93 ]provided as follows: "No action shall be brought against an insurer under subsection (1) after the expiration of one year from the final determination of the action against the insured, including appeals if any." At p. 722 O.R., Morden A.C.J.O. concluded that the discoverability principle applied:
With respect, I do not think that the triggering event in s. 258(2) of the Insurance Act -- the final determination of the action against the insured -- is the same as that in Fehr. It is a constituent element of the cause of action which is created by s. 258(1) -- a judgment against a person insured by a motor vehicle liability policy. Under the discoverability rule this triggering event does not come into existence until the plaintiff has, or reasonably should have, knowledge not only that he or she has a judgment but, also, that it is a judgment against an insured person.
(Emphasis in original)
[45] Similarly, in this case, the term "conduct" in s. 36(4) (a)(i) of the Competition Act refers to the conduct giving rise to damages mentioned in s. 36(1) and is, therefore, also a constituent element of the cause of action subject to the limitation period. To use Bastarache J.'s language from Ryan, quoted above, the triggering event is related to the accrual of the cause of action. Applying the rationale from Grenier, s. 36(4)(a)(i) too is subject to the discoverability principle.
[46] Also, in Peixeiro, at para. 39, Major J. stated the following:
In balancing the defendant's legitimate interest in respecting limitations periods and the interest of the plaintiffs, the fundamental unfairness of requiring a plaintiff to bring a cause of action before he could reasonably have discovered that he had a cause of action is a compelling consideration.
In my view, that applies in the present case as well, particularly given that secrecy and deception are invariably elements of anti-competition agreements.
[47] I note that s. 36(4)(a)(ii) provides an alternative date for the limitation period (i.e., the day on which any criminal proceedings relating to the conduct at issue were disposed of). That alternate event is arguably not connected to a plaintiff's cause of action or knowledge -- at the very least it is clearly not a constituent element of the cause of action provided in s. 36 of the Competition Act. As such, it imposes a limitation period that is probably not subject to discoverability. One could argue that this produces an anomalous result in that the discoverability principle would apply to s. 36(4)(a)(i) but not to s. 36(4)(a)(ii). However, I do not think such an outcome would be anomalous. There is no rule that suggests that both limitation periods in s. 36(4)(a) must operate in the same way.
[48] I agree with the statements of Sharpe J. in Chadha v. Bayer Inc., 1998 14791 (ON SC), [1998] O.J. No. 6419, 82 C.P.R. (3d) 202 (Gen. Div.) [page94 ] about s. 36(4)(a)(i) and (ii). In concluding that it was not beyond doubt that the discoverability principle did not apply to s. 36(4) (a)(i), he noted, at p. 206 C.P.R., that "Parliament has hardly provided potential defendants with an iron-clad assurance that they may not be sued more [than] two years after the cessation of their conduct as the limitation period could start to run again in the event of criminal proceedings."
[49] I also agree with the submission of Fanshawe that any other interpretation has the potential to render the remedy nugatory by depriving victims of the chance to make a claim when the conspirators' concealment has been particularly effective.
(iii) Leave to amend the statement of claim
[50] Fanshawe's lawyers brought a motion for leave to amend the statement of claim. Their impetus for the motion was twofold.
[51] First, there was concern that the Supreme Court of Canada in a series of unrelated cases would rule that only direct purchasers, as opposed to indirect purchasers, could assert price-fixing claims. Fanshawe is an indirect purchaser, so there was the potential that there would be no representative plaintiff in the case. Accordingly, in the proposed amendments, they sought to add Mass, which was a direct purchaser.
[52] Second, Fanshawe's lawyers wanted to eventually move to consolidate this action with the first Ontario action. So they proposed a series of amendments to ensure that the terminology in the statement of claim in this action would match the terminology in the statement of claim in the first Ontario action.
[53] The motion judge declined to grant the motion. He observed [2015 ONSC 3414, [2015] O.J. No. 2686], at para. 8, that a party "should not be added as a plaintiff if the limitation period applicable to their claim has clearly expired". In his view, it was clear that the Limitations Act barred the conspiracy claim and that the Competition Act claim was time-barred by s. 36(4)(1)(a) of the Act. By the time Fanshawe filed this motion to add Mass as a representative plaintiff, more than two years had passed since Mass retained Siskinds to pursue claims related to the price-fixing of LCD products.
[54] The motion judge reasoned that the only way the claim would not be statute-barred was if the applicable limitation periods were tolled with respect to Mass, as an existing class member, when Fanshawe commenced this action, pursuant to s. 28(1) of the Class Proceedings Act, 1992, S.O. 1992, c. 6. He correctly identified the issue, at para. 16 of his reasons, as "whether Mass is, as it submits, already a class member or [page95 ]whether, as AU argues, the amendments would have the effect of expanding the claim to add a new category of purchaser".
[55] To determine this issue, the motion judge first analyzed the relief sought in para. 1(a) of the existing statement of claim, which provided as follows:
a declaration that the Defendants conspired each with the other to raise, maintain, fix and stabilize the price of large panel liquid crystal display ("LCD") (i.e. LCD panels that are 10 inches or larger, measured diagonally) and televisions, computer monitors and laptops containing LCD (collectively "LCD Products") during the period beginning at least January 1, 1998 to December 11, 2006 ("Conspiracy Period")[.]
[56] He then compared that paragraph to the same paragraph in the proposed statement of claim, underlining the amendments:
a declaration that the Defendants conspired each with the other to raise, maintain, fix and stabilize the price of large panel liquid crystal display ("LCD") (i.e. LCD panels that are 10 inches or larger, measured diagonally) ("LCD Panels") and televisions, computer monitors and laptops containing LCD Panels (collectively "LCD Products") during the period beginning at least January 1, 1998 to December 11, 2006 ("Conspiracy Period")[.]
[57] The motion judge also referenced [at para. 19] para. 4 of the proposed statement of claim, which provided the following underlined amendments:
While LCD Panels are used in a variety of products, such as televisions, computer monitors, laptops, mobile phones, personal digital assistants, and digital cameras, this claim relates only to large LCD Panels used in televisions, computer monitors and laptops.
[58] The motion judge found that, had the amendments stopped there, he would have granted leave to amend because they were cosmetic in nature and did not change the substance of the relief sought in the action. However, he found that the other proposed amendments went beyond mere cosmetic refinements of the existing language and expanded the scope of the action. In particular, he pointed to proposed para. 8, which stated, "[d] uring the Conspiracy Period, Mass Multiples purchased LCD Panels for use in the design and manufacturing of multiple-display products".
[59] According to the motion judge, that amendment expanded the scope of the action. His reasoning was as follows [at paras. 29-34]:
While the words "multiple-display products" are not defined, the words televisions, computer monitors and/or laptops are not used in connection with Mass.
That appears to explain why the proposed pleading has been enlarged to allege that the defendants and others conspired "to enhance unreasonably [page96 ]the prices of LCD Panels and/or LCD Products and to lessen unduly competition in the production, manufacture, sale and/ or supply of LCD Panels and/or LCD Products in North America." [Italics added]
It also explains why the proposed pleading alleges that Fanshawe and Mass paid more for "LCD Panels and LCD Products" than would have been paid in the absence of the alleged conspiracy. [Italics added]
When read as a whole, the proposed pleading introduces substantive changes. Remedies are being sought in relation to a wider range of products and on behalf of a larger putative class. LCD Panels are not simply a sub-category of LCD Products. Mass is not simply an existing class member who is seeking to become a named plaintiff.
In fact, it does not appear that Mass is a member of the class described in the existing statement of claim at all. That means Mass was not under the umbrella of s. 28(1) of the [Class Proceedings Act]. The commencement of this action had no effect on the limitation periods relating to Mass' claims. Those periods have expired.
In those circumstances, it is not appropriate to add Mass as a plaintiff to this action under rule 5.04(2) of the Rules of Civil Procedure. Given that decision there is no need for any of the consequential amendments.
(Footnotes omitted)
[60] In my view, the motion judge erred in concluding that Mass was not a member of the class described in the existing statement of claim. That claim contained language in para. 1(a) that made clear that the action sought relief for direct and indirect purchasers: "a declaration that the Defendants conspired each with the other to raise, maintain, fix and stabilize the price of large panel liquid crystal display (aeLCD') (i.e., LCD panels that are ten inches or larger, measured diagonally) and televisions, computer monitors and laptops containing LCD (collectively aeLCD Products')". Mass was a direct purchaser (i.e., it purchased panels, not finished products containing panels).
[61] The effect of the amendments was not to expand the scope of the action to include a new category of class members. Mass was part of the class from the outset as an indirect purchaser. Accordingly, it had the benefit of s. 28(1) of the Class Proceedings Act. The limitation period for its claim was tolled and there was no basis for the motion judge to deny the motion for leave to amend the statement of claim.
(iv) Civil conspiracy
[62] Fanshawe asserts a claim in civil conspiracy, alleging that the defendants' breach of s. 45 of the Competition Act -- the provision that establishes the offence of price-fixing -- constituted an unlawful act directed at Fanshawe and other purchasers knowing that this conduct would likely cause them injury. On the Fanshawe appeal, HannStar argued that, as an additional [page97 ]issue raised before the motion judge but not addressed in his reasons, the amendment should not be granted because such a breach could not serve as the unlawful means in a civil conspiracy claim.
[63] While the general rule is that amendments are presumptively approved, there is no absolute right to amend pleadings. An amendment will not be permitted where "prejudice would result that could not be compensated for by costs or an adjournment": rule 26.01.
[64] HannStar opposes the amendment because it asserts that the unlawful means conspiracy claim, as pleaded, is not tenable in law, suggesting the claim would have been struck if it had been originally pleaded. The test to strike a claim at the pleadings stage is well established: a claim must be permitted to proceed unless it is plain and obvious that it cannot succeed. Therefore, only claims with "no reasonable prospect of success" should be struck, whereas claims that "have some chance of success" should proceed to trial: R. v. Imperial Tobacco Canada Ltd., [2011] 3 S.C.R. 45, [2011] S.C.J. No. 42, 2011 SCC 42, at paras. 17-19.
[65] The issue for determination is whether it is plain and obvious that Fanshawe's civil conspiracy cannot succeed because a breach of s. 45 of the Competition Act cannot serve as the unlawful means. Below, I review the submission made by HannStar and the case law on the interaction between the Competition Act and unlawful means conspiracy. I then apply the legal principles to this case to determine whether HannStar has met the plain and obvious test.
(a) HannStar's submission
[66] The crux of HannStar's submission is that s. 36 of the Competition Act provides the only available civil remedy for a breach of Part VI of the Act. That section provides in part:
36(1) Any person who has suffered loss or damage as a result of
(a) conduct that is contrary to any provision of Part VI, or
(b) the failure of any person to comply with an order of the Tribunal or another court under this Act,
may, in any court of competent jurisdiction, sue for and recover from the person who engaged in the conduct or failed to comply with the order an amount equal to the loss or damage proved to have been suffered by him, together with any additional amount that the court may allow not exceeding the full cost to him of any investigation in connection with the matter and of proceedings under this section. [page98 ]
[67] Thus, s. 36 creates a statutory cause of action for 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 provisions include conspiracy (s. 45), bid-rigging (s. 47), misleading advertising (s. 52) and deceptive telemarketing (s. 52.1). Available damages are restricted to recovering "an amount equal to the loss or damage proved to have been suffered". So, for example, punitive damages are not available: Wong v. Sony of Canada Ltd. (2001), 9 C.P.C. (5th) 122 (Ont. S.C.J.), at paras. 17-18.
[68] HannStar's position is that s. 36 operates as a complete code for the assertion of claims for damages resulting from conduct that breaches Part VI of the Act. It submits that Parliament intended to limit the available remedy to the statutory cause of action provided for in s. 36. It would, therefore, be contrary to the Competition Act and Parliament's intentions to permit a s. 45 breach to serve as the unlawful means in a civil conspiracy claim because it would impermissibly expand the scope of available remedies.
[69] In support of this submission, HannStar relies on a line of authority beginning with Orpen v. Roberts, 1925 2 (SCC), [1925] S.C.R. 364, [1925] S.C.J. No. 14, which stands for the proposition that, in determining whether an individual can sue in respect of a statutory duty, the court must look to whether the action is brought in respect of the kind of harm which the statute is designed to prevent, whether the person bringing the claim is part of the class that the statute is designed to protect, and whether the remedy provided by the statute is adequate protection for the person injured: see, also, Stewart v. Park Manor Motors Ltd., 1967 243 (ON CA), [1968] 1 O.R. 234, [1967] O.J. No. 1117 (C.A.), at p. 238 O.R.
[70] HannStar submits that the remedy in s. 36 adequately protects injured parties and that it was not Parliament's intent to augment the statutory cause of action by enacting a general right for consumers to sue in tort for a breach of Part VI of the Act.
(b) Competition Act and unlawful means conspiracy case law
[71] The analysis of the relevant case law begins with the seminal case Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd., 1983 23 (SCC), [1983] 1 S.C.R. 452, [1983] S.C.J. No. 33. There the Supreme Court of Canada provided much needed guidance regarding the constituent elements of the tort of civil conspiracy. At pp. 471-72 S.C.R., the court ruled that the tort of conspiracy exists in the following circumstances: (1) the predominant purpose of the defendants' conduct is to cause [page99 ]plaintiff injury, whether or not the defendants' means were lawful; or (2) the defendants' conduct is unlawful and directed towards the plaintiff (alone or with others) and, in the circumstances, the defendants should know that injury to the plaintiff is likely to, and does, result, notwithstanding that the predominant purpose of the defendants' conduct was not to cause injury to the plaintiff.
[72] For present purposes, it is important to note that the unlawful means alleged by the plaintiff in Cement LaFarge was based upon the guilty pleas of the defendants to charges of conspiracy to prevent or unduly lessen competition in the production of cement contrary to s. 32(1) (c) of the Combines Investigation Act, R.S.C. 1970, c. C-23. That section was the predecessor of the current s. 45 of the Competition Act. The Supreme Court ruled that, in the circumstances of that case, the plaintiff had not made out a civil conspiracy claim. However, the court appeared to accept that a breach of s. 32(1)(c) of the Combines Investigation Act could, in appropriate circumstances, serve as the unlawful means in a civil conspiracy claim.
[73] The Supreme Court of Canada in A.I. Enterprises Ltd. v. Bram Enterprises Ltd., [2014] 1 S.C.R. 177, [2014] S.C.J. No. 12, 2014 SCC 12, clarified any doubt about the court's meaning in Cement LaFarge. There, Cromwell J., writing for the court, referred to Cement LaFarge as standing for the proposition that a breach of a statute could satisfy the unlawful means component.
[74] I pause in my review of the case law to note that HannStar takes the position that Cement LaFarge is not controlling on the issue because at the time of the commencement of the claim in that case the predecessor to s. 36 had not yet been enacted. Things changed, it argues, when Parliament added a statutory cause of action. At that point, there was no need for resort to a common law claim because Parliament had enacted a complete code for civil claims.
[75] In Westfair Foods Ltd v. Lippens Inc., 1989 5257 (MB CA), [1989] M.J. No. 572, 64 D.L.R. (4th) 335 (C.A.), at pp. 337-39 D.L.R., leave to appeal to S.C.C. refused [1990] S.C.C.A. No. 17, 106 N.R. 16n, the Manitoba Court of Appeal rejected the argument that the statutory remedy provided for in the Act overtook or foreclosed existing common law remedies. The court's view was that Parliament could have stated in clear language in the Act that existing tort claims were restricted or eliminated, but it chose not to do so. In addition, the court held that s. 62 of the Act rebuts any argument that the statutory cause of action precludes any civil remedies. Section 62 provides that nothing in Part VI "shall be construed as depriving any person of any civil [page100] right of action".
[76] In Apotex Inc. v. Hoffmann La-Roche Ltd., 2000 16984 (ON CA), [2000] O.J. No. 4732, 195 D.L.R. (4th) 244 (C.A.), this court relied on Westfair in rejecting an argument that the unlawful conduct allegations in a civil conspiracy claim had not been properly pleaded. Rosenberg J.A.'s analysis of the issue is found at para. 21:
The motions judge held that while allegations of unlawful conduct are made in the amended statement of claim "no factual underpinning is pleaded" to sustain the tort of unlawful interference with economic relations. Similarly, with respect to conspiracy, he held that the pleading is "devoid of facts supporting an allegation of unlawful purpose". With respect, I do not agree. It is open to the appellant to rely upon breach of s. 52 of the Competition Act as supplying the element of unlawful means for both unlawful interference with economic interests and conspiracy. See Westfair Foods Ltd. v. Lippens Inc. (1989), 1989 5257 (MB CA), 64 D.L.R. (4th) 335 (Man. C.A.) at 338.
[77] HannStar relies upon the Court of Appeal for British Columbia's decision in Wakelam v. Johnson & Johnson, [2014] B.C.J. No. 167, 2014 BCCA 36, 54 B.C.L.R. (5th) 7, leave to appeal to S.C.C. refused [2014] 2 S.C.R. x, [2014] S.C.C.A. No. 125, in support of its position. That was a class action where the plaintiff alleged that the defendants had engaged in "deceptive acts or practices" under the [British Columbia ]Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2 and had made false or misleading representations to the public contrary to s. 52 of the Competition Act. The provincial statute also provided a private right of action for persons who suffer loss or damage due to breach of the statute.
[78] In finding that the plaintiff could not sue in tort on the basis of a breach of Part VI, the court relied on General Motors of Canada Ltd. v. City National Leasing Ltd., 1989 133 (SCC), [1989] 1 S.C.R. 641, [1989] S.C.J. No. 28, in which the Supreme Court of Canada considered the constitutionality of the statutory cause of action in the Competition Act. Newbury J.A, writing for the court in Wakelam, observed the following, at para. 89:
The Court in General Motors was careful to emphasize that this right of action was part of the "well-integrated scheme" of the whole Act, and that it did not create a right of action "at large". Had it done so, it appears the constitutional verdict in General Motors might have been different.
[79] The Court of Appeal for British Columbia's analysis in Wakelam was considered a short time later by that same court in Watson v. Bank of America Corp., [2015] B.C.J. No. 1775, 2015 BCCA 362, 79 B.C.L.R. (5th) 1, which was an appeal on a pleadings motion. In that case, Saunders J.A., writing for the court, noted that, in Wakelam, the court never adverted to the [page101] issue of whether the enactment of the statutory cause of action was meant to eliminate an existing cause of action at common law. Saunders J.A. restricted the application of Wakelam to the proposition that a breach of the Competition Act alone could not ground claims for restitutionary remedies. She distinguished the case's applicability for claims based on the tort of unlawful means conspiracy.
[80] In answering the question of whether Parliament intended to eliminate the existing common law right, the court framed the issue, at para. 55, as "whether the Competition Act provides a aenew and superior' method of remedying a breach of the statute". The Supreme Court of Canada's decision in Gendron v. Supply & Services Union of the Public Service Alliance of Canada, Local 50057, 1990 110 (SCC), [1990] 1 S.C.R. 1298, [1990] S.C.J. No. 55 was relied upon, at para. 54, for the proposition that if Parliament desires to replace an existing common law right it must express its intention with "irresistible clearness".
[81] The court in Watson found that s. 36 was not intended to replace the common law action in unlawful means conspiracy. It relied on the fact that the statutory and common law causes of action had different constituent elements, available remedies and limitation periods in support of its conclusion. The court concluded that it was not plain and obvious that a claim in unlawful means conspiracy based on ss. 45 and 61 of the Competition Act could not succeed.
[82] The final case for consideration on this point is Shah v. LG Chem Ltd., [2015] O.J. No. 5168, 2015 ONSC 6148, 390 D.L.R. (4th) 87 (S.C.J.),1 which is also relied upon by HannStar. In that case, the motion judge conducted an exhaustive review of the case law on this issue in the context of determining whether an unlawful means conspiracy should be certified in a class action. At paras. 226-27, he expressed his reasons for declining to follow Watson:
In my opinion, the error in this analysis of the statutory interpretation issue of whether Parliament intended to preclude an unlawful means conspiracy based on a breach of Part VI of the Competition Act appears at para. 55 of the Court's judgment in Watson, where Justice Saunders reframes the question to be asked as whether the Competition Act provides "a new and superior" method of remedying a breach of the statute. With respect, the superiority of the new statute in providing a remedy for a breach of the statute is not the right interpretative question. The proper question is: Based on a reading of the whole statute what was Parliament's [page102] intent in introducing the statutory cause of action? I repeat what Justice Duff stated in Orpen v. Roberts, supra at pp. 369-370[.]
For the reasons expressed above, Parliament's intent was not constrained to replacing the existing common law means of enforcing competition law with a new and superior method. Parliament does not have to justify making its statutory cause of action the exclusive cause of action by making it broader and more generous or superior in some way to the common law cause of action. Given the policy pulls of competition law, Parliament was not constrained to only introduce pro-plaintiff amendments to the Competition Act, and, in my opinion, Parliament intended to introduce a statutory cause of action that had a briefer limitation period and that did not admit of punitive damages but did offer plaintiffs a more efficient claim against price-fixers. As Justice Howland, noted in Stephens v. Gulf Oil Canada Ltd., supra, the scope of the common law may be changed to the extent that Parliament determines that regulation is desirable in the public interest.
(c) Application of the legal principles
[83] In my view, the weight of appellate authority in this country is contrary to the position asserted by HannStar and its position is wrong in law.
[84] The appellate authorities cited by the parties are, with the exception of Wakelam, entirely consistent with Fanshawe's position. In Apotex, the issue was squarely before this court and the position urged upon us by HannStar was rejected.
[85] Further, in my view, there is no reason to depart from the reasoning of this court in Apotex, of the Manitoba Court of Appeal in Westfair and of the Court of Appeal for British Columbia in Watson. There is nothing in the language of s. 36 or in the debates surrounding its enactment that suggests it was Parliament's intention to eliminate the use of a breach of Part VI of the Act as the unlawful means in a civil conspiracy claim. To the contrary, it would appear to be incongruous with the purpose of the Act, being the elimination of anti-competitive behaviour, that Parliament would eliminate a common law cause of action that serves to punish such behaviour.
[86] The cases relied upon by HannStar that consider the Competition Act are outliers. They are not binding on this court and should not be followed.
[87] Barely 18 months after it was issued, the application of Wakelam was severely restricted by the same court's subsequent decision in Watson. There is good reason for this. In Wakelam, the court took the wrong analytical approach. It relied on General Motors, which was concerned with whether the enactment of the predecessor to s. 36 was constitutionally valid. That was not the issue before the court in Wakelam and it is not the issue before this court. The issue here is whether the enactment eliminated an existing cause of action, i.e., civil conspiracy with [page103] a Part VI breach serving as the unlawful means. The court in Wakelam never considered that issue and Westfair and Apotex were not referenced.
[88] In Shah, the motion judge determined, at para. 193, that his preferred analytical approach was to begin by considering the issue "as a matter of first principles and then analyze what the case law says". That approach, while unusual, is certainly acceptable. He acknowledged, at para. 191, that "there was existing case law recognizing that a breach of the Competition Act was an unlawful act for the purposes of satisfying this constituent element of the tort of conspiracy". He then cites Apotex. However, in his extensive legal analysis, there is no further reference to the case.
[89] While it was open to the motion judge in that case to distinguish Apotex, what he could not do was ignore the dicta from this court. The selective nature of the analysis taints his conclusions and leads me to conclude that the case should not be followed.
[90] I am also of the view that the motion judge in Shah erred in relying upon the Orpen line of case law. It is not applicable to the present case because, in those cases, the courts were considering statues where the legislature identified the proscribed behaviour and provided for a remedy at the same time. Thus, the analysis focused on whether it was the intention of the legislature to provide a complete code of redress.
[91] This contrasts with the legislative history of the predecessor to the Competition Act, in which Parliament first prohibited certain conduct without providing a corresponding civil remedy. As discussed above, the common law filled the void by allowing a Part VI violation to serve as the unlawful means in a civil conspiracy. It was only after that remedy was established that the Act was amended to provide a statutory remedy. In these circumstances, the correct analysis is whether Parliament intended to take away this established remedy with the enactment of the statutory cause of action.
[92] In summary, I am of the view that the weight of appellate authority is contrary to the position espoused by HannStar and that the cases relied upon by HannStar are not persuasive. In these circumstances, it can hardly be said that the unlawful means conspiracy claim asserted in the present case has no chance of success.
Disposition
[93] I would dismiss the HannStar appeal. I would allow the Fanshawe appeal and grant Fanshawe leave to amend its [page104] statement of claim in the manner proposed in its motion for leave to amend.
[94] If the parties are unable to agree on the issue of costs, they may make brief submissions in writing within two weeks of the release of these reasons.
Defendants' appeal dismissed; plaintiff's appeal
allowed.
Notes
1 Leave to appeal to the Divisional Court was granted on August 10, 2016: [2016] O.J. No. 4170, 2016 ONSC 4670 (Div. Ct.).
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