David v. Loblaw Companies Limited, 2024 ONSC 1157
CITATION: David v. Loblaw Companies Limited, 2024 ONSC 1157
DIVISIONAL COURT FILE NO.: 345/22
COURT FILE NO.: CV-17-586063-00CP
DATE: 20240226
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
E. Stewart, Mew and Faieta, JJ.
BETWEEN:
MARCY DAVID, BRENDA BROOKS and ANDREW BALODIS
Plaintiffs (Appellants)
– and –
LOBLAW COMPANIES LIMITED, GEORGE WESTON LIMITED, WESTON FOODS (CANADA) INC., WESTON BAKERIES LIMITED, CANADA BREAD COMPANY, LIMITED, GRUPO BIMBO, S.A.B. DE C.V., MAPLE LEAF FOODS INC., EMPIRE COMPANY LIMITED, SOBEYS INC., METRO INC., WAL-MART CANADA CORP., WAL-MART STORES INC. and GIANT TIGER STORES LIMITED
Defendants (Respondents)
James C. Orr, Zohar Levy and Pujan Modi, for the Appellants
Markus Kremer and Joshua Abaki, for George Weston Limited, Loblaw Companies Limited, Weston Foods (Canada) Inc. and Weston Bakeries Limited
Kristine Spence and Sarah Cormack, for Wal-Mart Canada Corporation and Wal-Mart Stores, Inc.
Andrew McCoomb and Ted Brook, for Metro Inc.
Chantelle Cseh, for Giant Tiger Stores Limited
Sinziana R. Hennig and Gavin Inkster, for Sobeys Inc. and Empire Company Limited
Catherine Beagan Flood, Nicole Henderson and Joe McGrade, for Canada Bread Company, Limited and Grupo Bimbo S.A.B. de C.V.
HEARD at Toronto: November 14, 2023
Reasons for Decision
FAIETA j.
[1] The Competition Bureau investigated a price-fixing arrangement between certain producers of packaged bread and certain major grocery retailers that, in a coordinated manner, increased the wholesale and retail prices of packaged bread from 2001 until 2015. In 2017, George Weston Limited and Loblaw Companies Limited acknowledged their participation in this arrangement.
[2] In 2017, a price-fixing class action was commenced. Amongst other things, the plaintiffs advanced a claim on behalf of themselves, the “Class” and three “Umbrella Classes” for loss and damage caused by the wrongful and unlawful conduct of the defendants. Specifically, they allege that the defendants conspired, agreed or arranged amongst themselves to set the wholesale and retail price of packaged bread.
[3] For reasons given December 31, 2021, Morgan J. certified this proposed class action under the Class Proceedings Act, 1996, S.O. 1996, c. 6 (“CPA”), as against the defendant bakeries and retailers for allegedly conspiring to fix the price of packaged bread: See David v. Loblaw, 2021 ONSC 7331, 160 O.R. (3d) 33 (the “Reasons for Decision” or the “Reasons”). At paras. 118-119, the motions judge stated:
This action is certified under s. 5(1) of the CPA as against Loblaw, George Weston, Weston Bakeries, Weston Foods, Canada Bread, Metro, Sobeys, Wal-Mart Canada, and Giant Tiger, in respect of the claims of direct and indirect purchasers of packaged bread. …
The Class shall be as originally framed in the first version of the Statement of Claim - i.e. the version that did not include the umbrella classes. The certified Class consists of people who purchased packaged bread, either directly or indirectly, sold by a Defendant retailer or manufactured by a Defendant producer. [Emphasis added.]
[4] The parties were unable to agree on the terms of the Certification Order. A case conference was convened on June 9, 2022, to settle the terms of the Order. By an Endorsement dated June 10, 2022, the motions judge settled the terms of the Certification Order, directing that the “Class” was limited to those persons who purchased packaged bread manufactured by a defendant producer and that was sold by a defendant retailer: See David v. Loblaw Companies Limited, 2022 ONSC 3486 (the “Terms Endorsement”)
[5] On March 17, 2023, this Court granted the plaintiffs leave to appeal the order of the motions judge, dated December 31, 2021, on the following issue related to the definition of the “Class”
Did the motion judge err in excluding from the class for certification persons who claim damages for purchases of Packaged Bread directly or indirectly sold by a defendant producer without being resold by a Defendant retailer?
See David v. Loblaw, 2023 ONSC 1799.
[6] For the reasons that follow, I would dismiss the appeal.
BACKGROUND
[7] The plaintiffs sought the certification of their class action under the CPA, as described in their Amended Amended Third Fresh as Amended Statement of Claim (the “Claim”).
[8] Paragraph 3 of the Claim states:
Since about November 2001 the Defendants have conspired, agreed or arranged amongst themselves to set the wholesale and retail price of Packaged Bread sold in Canada by controlling output, price and other aspects of the manufacture, production, or supply of Packaged Bread. Their conduct caused and is causing loss and damage to individuals in Canada who purchased Packaged Bread and Fresh Bread, including the Class, Umbrella Class-Packaged Bread, Umbrella Class – Defendants’ Fresh Bread, and Umbrella Class-Non-Defendants’ Fresh Bread. [Emphasis added.]
[9] In paragraph 36 of his Expert Report dated August 1, 2018 (corrected on November 20, 2018), Dr. Jeffrey Leitzinger, an economist, expressed his opinion that the “Class” would include direct and indirect purchasers of packaged bread. Dr. Leitzinger states:
This includes purchasers of packaged bread directly from the defendant bakeries. These class members mostly would be businesses such as retail stores and food distributors. The Class definition also includes purchasers of packaged bread directly from the defendant grocers. These class members mostly would be individual consumers. Finally, the Class includes indirect purchasers of packaged bread products—that is, those who purchased packaged bread products, manufactured by Canada Bread or Weston, from a non-defendant business. These Class members would include restaurants and other businesses purchasing bread products through a food distributor. It also would include consumers who purchased a defendant bakery’s packaged bread products from a nondefendant grocery retailer.
[10] Thus, “direct purchasers” are those persons who purchased packaged bread sold by a defendant producer (Canada Bread or Weston Bakeries) that was resold by a defendant retailer (Loblaw, Sobeys, Metro, Wal-Mart or Giant Tiger). “Indirect purchasers” would include non-defendant retailers who purchased packaged bread directly from a defendant bakery and persons who purchased packaged bread produced by a defendant bakery from a non-defendant retailer.
[11] Although the phrases “direct purchaser” and “indirect purchaser” do not appear in the Claim, the Claim does define three Umbrella Classes:
“Umbrella Class – Packaged Bread” means all persons or entities residing in Canada, other than Excluded Persons, who purchased Packaged Bread during the Class Period produced or sold by anyone other than the Defendants or their affiliates, …”
“Umbrella Class – Defendants’ Fresh Bread” means all persons or entities residing in Canada, other than Excluded Persons, who purchased Fresh Bread during the Class Period sold by Loblaw Companies Limited, Sobeys Inc., Metro Inc., Wal-Mart Canada Corp., or Giant Tiger Stores Limited or their affiliates, …”
“Umbrella Class – Non-Defendants’ Fresh Bread” means all persons or entities residing in Canada, other than Excluded Persons, who purchased Fresh Bread during the Class Period sold by Federated Co-Operatives Ltd., The North West Company, Overwaitea Food Group, H Mart, Buy Low Food Ltd., Longo Brothers Fruit Markets Inc., Costco Wholesale Canada Ltd., or Quality Foods or their affiliates …”
[12] In his Reasons for Decision, at para. 14, the motions judge summarized the conspiracy allegations in the Claim as follows:
The conspiracy: Beginning in November 2001, the Defendants conspired to set the wholesale and retail price of packaged bread sold in Canada by controlling the product’s output, price and other aspects of its manufacture, production, or supply.
Parties: Loblaw, Sobeys, Metro, Giant Tiger, and Wal-Mart Canada, who are competitors of one another in the retail grocery market, and Weston Bakeries and Canada Bread, who are competing suppliers and producers in the market for bread.
Intent: To injure the Plaintiffs and class members and to enrich themselves.
Overt acts: Beginning in November 2001 and continuing until today, the supplier Defendants agreed and co-ordinated with each other on at least fifteen occasions to increase the price of packaged bread; at the same time, the retailer Defendants agreed and co-ordinated with each other to set the price of packaged bread, and the supplier and Retail Defendants all agreed and coordinated with one another to ensure adherence with the pricing arrangements.
Particulars: The price increases in packaged bread followed a ‘7/10 Convention’ - a seven-cent increase at wholesale corresponded with a ten-cent increase at retail, with the increases taking place on specific dates. The suppliers were responsible for establishing and enforcing retail price floors and co-ordinating retail price points amongst the retailers.
Market power: The Defendants together possess significant market power in Canada for the production and sale of packaged bread. Relying on this market power, the Defendants were able to increase the wholesale and retail price of the product.
Implementation: The conspiracy was generally conducted via direct communication between senior officers and executives in the Defendants’ organisations. The retail Defendants and the supply Defendants also had relationships with one another, allowing communication between retailers to frequently occur through suppliers.
Umbrella effects: The price of packaged bread produced or sold by anyone other than the co-conspirators was inflated in parallel with the price as between the co-conspirators, as was the price of fresh bread sold by the retail Defendants and by specific non-defendant retailers in Canada.
Economic harm: During the Class Period the Plaintiffs and the Class paid supra-competitive prices for both packaged bread and fresh bread.
[13] Subsection 5(1) of the CPA states that a court shall certify a class proceeding if:
(a) the pleadings or the notice of application discloses a cause of action;
(b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff or defendant;
(c) the claims or defences of the class members raise common issues;
(d) a class proceeding would be the preferable procedure for the resolution of the common issues; and
(e) there is a representative plaintiff or defendant who,
(i) would fairly and adequately represent the interests 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 in conflict with the interests of other class members.
[14] In Bowman v. Ontario, 2022 ONCA 477, 162 O.R. (3d) 561, at para. 25, Brown J.A. stated that the following general principles govern the certification of a class proceeding:
The CPA should be construed generously in a way that gives full effect to the benefits foreseen by the drafters (citations omitted);
The onus is on the representative plaintiff to show why the certification criteria have been met;
The certification stage is decidedly not meant to be a test of the merits of the action. The certification stage focuses on the form of the action. The question is not whether the claim is likely to succeed but whether the suit is appropriately prosecuted as a class action (citations omitted);
The plaintiff must show “some basis in fact” for each of the certification criteria, other than the requirement that the pleadings disclose a cause of action (citations omitted);
In assessing whether the representative plaintiff has met s. 5(1)(a)’s criterion, the court must ask whether, taking the pleaded facts to be provable and true, it is “plain and obvious” that the pleading discloses no reasonable cause of action (or cause of action supportable at law), or the claim has no reasonable prospect of success…. While the approach must be generous and err on the side of permitting a novel but arguable claim to proceed, at the same time a claim will not survive an application to strike simply because it is novel. If a court would not recognize a novel claim when the facts as pleaded are taken to be true, the claim is plainly doomed to fail and should be struck. [Citations omitted.]
[15] In addressing whether the Claim met the threshold under s. 5(1)(a) of the CPA, the motions judge found that the causes of action asserted against the producer and retailer defendants, including s. 36 of the Competition Act, the tort of civil conspiracy and unjust enrichment, were properly pleaded. At para. 26, the motions judge stated:
There is therefore a properly pleaded cause of action against the producer and retail Defendants. The causes of action are drafted in a way that they encompass both the indirect sales and the umbrella effects of the alleged conspiracy. While the claims put forward on behalf of the umbrella purchasers are problematic in other ways (as discussed below with respect to the common issues), the pleading does set out recognizable causes of action. The Statement of Claim therefore passes the CPA's section 5(1)(a) requirement for certification insofar as it makes claims against Loblaw, Weston Bakeries, Weston Foods, Canada Bread, Metro, Sobeys, Wal-Mart Canada, and Giant Tiger. [Emphasis added.]
[16] The plaintiffs’ Claim defines the “Class” of plaintiffs as follows:
… all persons or entities residing in Canada, other than Excluded Persons, who purchased Packaged Bread during the Class Period produced or sold by the Defendants or their affiliates, and who reside in Canada as of the date of the certification order. [Emphasis added.]
[17] In addressing whether the proposed class of plaintiffs met the “identifiable class” threshold under s. 5(1)(b) of the CPA, the motions judge stated, at paras. 58-59, that:
58 The class as originally framed by the Plaintiffs consists of people who purchased packaged bread sold by a Defendant producer or retailer or manufactured by a Defendant producer and sold by either a non-Defendant retailer or an intermediary. When the Supreme Court of Canada ruled in Godfrey [Pioneer Corp. v. Godfrey, 2019 SCC 42] that the cause of action under s. 36 of the Competition Act could include consumers who experienced umbrella price effects from a price-fixing conspiracy, the claim was amended to include them as well.
59 The Statement of Claim now embraces people who purchased packaged bread that was neither produced or nor sold by the alleged conspirators. It also includes people who purchased fresh bread from the retail Defendants and people who purchased fresh bread from the largest non-Defendant retailers in Canada (Federated Co-Operatives Ltd., The North-West Company, Overwaitea Food Group, H Mart, Buy Low Food Ltd., Longo Brothers Fruit Markets Inc., Costco Wholesale Canada Ltd., or Quality Foods). [Emphasis added.]
[18] In deciding to exclude the Umbrella Classes, the motions judge stated, at paras. 66-67:
66 In general, a class satisfies the requirement of section 5(1)(b) of the CPA if members of the class can be identified using objective criteria to determine membership: Robertson v Thomson Corp (1999), 43 OR (3d) 161, at para 25 (Gen Div). The proposed class members need not have identical claims or interests, but the court must be satisfied that the claims will be advanced by the resolution of the common issues: Sankar v Bell Mobility, 2013 ONSC 5916, at para 57. This includes the claims of indirect purchasers, whose inclusion in the action promote the deterrence and compensation objectives of the Competition Act: Pro-Sys, [Pro-Sys Consultants Ltd. v. Microsoft Corp., 2013 SCC 57] at paras 46-49. As indicated above, it theoretically also includes umbrella purchasers who have experienced the price impact of the Defendants' alleged acts by being purchasers in the impacted market: Godfrey, at para 108.
67 The proposed class meets the rather minimal criteria for certification set out in section 5(1)(b) of the CPA. Under the circumstances, however, it will be limited to the direct and indirect purchasers of packaged bread and will exclude purchasers of fresh bread and all of the proposed umbrella classes. While those excluded umbrella purchasers are theoretically capable of being members of a consumer class, the facts of the case do not support it. This will be explained more fully below under the analysis of common issues. The claim, as it currently stands, is not supported by a record that evidences any methodology capable of dealing with the claims of umbrella purchasers as defined by Plaintiffs' counsel. [Emphasis added.]
[19] The plaintiffs did not appeal the exclusion of the claims by the Umbrella Classes.
[20] The applicable principles for assessing whether the claims of the class members raised common issues as required by s. 5(1)(c) of the CPA, were outlined in Hodge v. Neinstein, 2017 ONCA 494, 136 OR (3d) 81, at paras. 111-112, by Hoy A.C.J.O.:
111 The underlying commonality question is whether allowing a proceeding to continue as a class proceeding will avoid duplication of fact-finding or legal analysis: Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 S.C.R. 534 (S.C.C.), [2000] S.C.J. No. 63, 2001 SCC 46, at para. 39; Pro-Sys, at para. 108.
112 The court went on, at para. 108 of Pro-Sys, to list the balance of the instructions found at paras. 39-40 of Dutton as to how to approach the common issues inquiry:
(1) The commonality question should be approached purposively.
(2) An issue will be “common” only where its resolution is necessary to the resolution of each class member's claim.
(3) It is not essential that the class members be identically situated vis-à-vis the opposing party.
(4) It not necessary that common issues predominate over non-common issues. However, the class members' claims must share a substantial common ingredient to justify a class action. The court will examine the significance of the common issues in relation to individual issues.
(5) Success for one class member must mean success for all. All members of the class must benefit from the successful prosecution of the action, although not necessarily to the same extent.
113 At the certification stage, the factual evidence goes only to establishing whether the questions are common to all the class members: Pro-Sys, at para. 110. While there must be “some basis in fact” that the issues are common, the test “does not require that the court resolve conflicting facts and evidence at the certification stage”, which the court is ill equipped to do at that stage: Pro-Sys, at para. 102.
114 Even a significant level of difference among the class members does not preclude a finding of commonality. If material differences do emerge, the court can deal with them at that time: Pro-Sys, at para. 112; Dutton, at para. 54.
115 An appellate court owes considerable deference to a certification judge’s commonality analysis, and “should restrict its intervention to matters of general principle”: Markson v. MBNA Canada Bank (2007), 85 O.R. (3d) 321 (Ont. C.A.), [2007] O.J. No. 1684, 2007 ONCA 334, at para. 33.
[21] In addressing whether the claims of the proposed class of plaintiffs raise common issues under s. 5(1)(c) of the CPA, the motions judge stated, at paras. 69-71:
69 In Western Canadian Shopping Centres Inc v Dutton, 2001 SCC 46, [2001] 2 SCR 534, at para 39, the Supreme Court explained that in a certification motion, “[t]he underlying question is whether allowing the suit to proceed as a [class proceeding] will avoid duplication of fact-finding or legal analysis”. From this foundation point, it follows that while class members need not all be situated identically vis-à-vis the Defendants, a “common issue” is one which “is necessary to the resolution of each class member’s claim” Ibid.
70 Further, the Court must be satisfied that the evidence tendered in support of the Plaintiffs' claims demonstrates that there is at least some basis in fact for the proposed common issues: Hollick v. Toronto (City), 2001 SCC 68, [2001] 3 SCR 158, at para 25. This assessment entails something more than "a bare assertion in the pleadings" that the common issues have evidentiary support: Fulawka v. Bank of Nova Scotia, 2012 ONCA 443 at para. 79. As the Divisional Court has explained: "some factual basis - in the form of admissible evidence - to support the allegation[s]", without which, the "gatekeeping function of the court would be effectively neutered": Williams v. Canon Canada Inc., 2012 ONSC 3692, at para 23.
71 Thus, section 5(1)(c) requires a two-step inquiry as to whether proposed common issues actually exist and, if so, can be answered in common across the Class. This is not a particularly high standard, but it is one that nevertheless requires the Court to move beyond mere “symbolic scrutiny”: Lin v. Airbnb, Inc., 2019 FC 1563, at para 33. As my colleague Perell J. stated in Kuiper v. Cook (Canada) Inc., 2018 ONSC 6487, at para 134, rev’d in part on other grounds, 2018 ONSC 6487 (Div Ct), “while the standard is low, it is not subterranean.” It is the Defendants’ primary contention in this certification motion that the evidentiary record does not meet the requisite standard.
[22] On the certification motion, the defendants submitted that the record must establish that there is some basis in fact that loss can be proven and quantified on a common basis: See Reasons for Decision, at para. 72. In respect of direct and indirect purchasers of packaged bread, the motions judge found, at paras. 77-78 and 80 of the Reasons for Decision:
77 Turning first to packaged bread, there is certainly sufficient evidence to support, for certification purposes, the allegation that this product has been the subject of a price-fixing conspiracy. Loblaw and George Weston have admitted to the conspiracy even if those it says were its co-conspirators persist in denying it: (citation omitted)… There is some – indeed, more than just some – basis in fact to indicate that damages may be awarded to consumers as well as businesses who paid intentionally inflated prices for packaged bread.
78 This includes consumer and business purchasers who did direct business with the Defendants as well as those who are one level removed and can be characterized as indirect purchasers in the Defendants' chain of commerce in packaged bread. In Godfrey, at para 107, Justice Brown reasoned that on certification the Plaintiffs need only demonstrate that they have a plausible methodology to establish that the loss reached “one or more” claimants at the “purchaser level.” For indirect purchasers, this would require a methodology for showing that direct purchasers passed on the inflated pricing to at least one indirect purchaser member of the class. The expert evidence of Dr. Leitzinger establishes to my satisfaction that the Plaintiffs have a methodology capable of proving this common-sense conclusion.…
80 Given the state of the evidence regarding the conspiracy to fix prices for packaged bread, there are sufficient grounds to certify the claim in respect of direct and indirect purchasers of that product (or that set of products, as defined by the Plaintiffs). [Emphasis added.]
[23] The defendants submit that the only methodology proposed by Dr. Leitzinger in respect of the “direct and indirect purchaser class” was one that would establish the loss experienced by the purchasers of packaged bread produced by a defendant producer and sold by a defendant retailer.
[24] At paras. 118-119, the motions judge certified the class action:
… as against Loblaw, George Weston, Weston Bakeries, Weston Foods, Canada Bread, Metro, Sobeys, Wal-Mart Canada, and Giant Tiger, in respect of the claims of direct and indirect purchasers of packaged bread.…
The Class shall be as originally framed in the first version of the Statement of Claim – i.e. the version that did not include the umbrella classes. The certified Class consists of people who purchased packaged bread, either directly or indirectly, sold by a Defendant retailer or manufactured by a Defendant producer. [Emphasis added.]
[25] Following the receipt of submissions on the form and content of the Certification Order, the motions judge issued the Terms Endorsement that settled the Certification Order.
“Packaged Bread” means industrially-produced bread products and bread alternatives manufactured and packaged by the Defendant producers, …. Packaged Bread does not include Fresh Bread.
“Class” means… all persons residing in Canada as of the date of the Order… who during the Class Period purchased Packaged Bread, either directly or indirectly, that was sold by a Defendant retailer.
[26] Accordingly, “indirect purchasers,” including those persons who purchased Packaged Bread from a non-defendant retailer, were excluded from the Class.
ISSUES
[27] The plaintiffs raise three issues:
(a) Does the Certification Order represent an error at law by failing to accurately reflect the findings as contained in the reasons of motions judge?
(b) Did the motions judge misinterpret the Claim?
(c) Did the motions judge otherwise err by refusing to certify the claims of the Indirect Purchasers?
Standard of Review
[28] As noted in Simpson v. Facebook, Inc., 2022 ONSC 1284, 160 O.R. (3d) 629, at paras. 19-20:
19 The standard of review for judicial appeals is set out in Housen v. Nikolaisen. On questions of law, the standard is correctness. On questions of fact, the standard is palpable and overriding error. On questions of mixed fact and law, where there is an extricable legal principle, the standard of review is correctness; however, with respect to the application of the correct legal principles to the evidence, the standard is palpable and overriding error.
20 The decision of the motion judge on a certification motion is entitled to substantial deference. An appellate court should only intervene if there is an error in principle or a palpable and overriding error of fact. [Footnotes omitted.]
Issue #1: Does the Certification Order represent an error at law by failing to accurately reflect the findings in the Reasons?
[29] The purpose of settling an order is to ensure that the formal order accurately sets out the intention of the court as reflected in the endorsement or reasons for decision: Chitsabesan v. Yuhendran, 2016 ONCA 105, 396 D.L.R. (4th) 657, at para. 11.
[30] The process of settling an order “is not an opportunity for either party to re-argue issues already decided in an effort to change the result set out in the judge’s reasons. Although a judge is not functus officio where the order has not been signed and entered and therefore retains jurisdiction over a matter, the instances in which it might be in the interests of justice to withdraw reasons of the court and rehear the case on the merits will be “rare:” Chitsabesan, at para. 11.
[31] As noted above, paras. 118-119 of the Reasons, the class action was certified to exclude the three umbrella classes and was certified to include the claims of those persons “who purchased packaged bread, either directly or indirectly, sold by a Defendant retailer or manufactured by a Defendant producer.”
[32] In arriving at this conclusion, the motions judge found that the proposed class of “direct and indirect purchasers of packaged bread satisfied the “identifiable class” threshold under s. 5(1)(b) of the CPA and also found, at para. 78, that the plaintiffs had a methodology capable of proving that direct purchasers passed on the inflated pricing of packaged bread to at least one indirect purchaser member of the class and thus found, at para. 80, that there were sufficient grounds to certify the claim under s. 5(1)(c) of the CPA in respect of direct and indirect purchasers of packaged bread.
[33] The certification of the class action on the terms described in the Reasons would have permitted claims by non-defendant retail stores (such as Costco) and food distributors (such as Sysco) who purchased packaged bread directly from a defendant producer. It would have also permitted claims from indirect purchasers such as consumers who purchased packaged bread made by a defendant producer from a non-defendant retail store and food service businesses (such as McDonald’s) that had purchased packaged bread from a food distributor.
[34] While the motions judge’s findings in his Reasons for Decision related to the certified class of plaintiffs arguably are inconsistent with how that definition appears in the Certification Order, the motions judge was not functus officio at the time that his Endorsement was issued. Given that he received three sets of draft Orders, it appears that clarification was required.
[35] In his Terms Endorsement, the motions judge explained, at para. 3, in relation to the definition of “Class” in the Certification Order, that:
Removal of the final phrase “or manufactured by a Defendant producer” ensures that the class is defined by its purchase of products that were subject to the alleged price fixing conspiracy. The retail Defendants are alleged to be conspirators with the producer Defendants; the former are in the business of re-selling the price-fixed products while the latter sell through the retail Defendants.
The case is pleaded as one conspiracy, not separate conspiracies by the producer and retail level of Defendants. Accordingly, any product that is the subject of the conspiracy must have passed through both levels of conspirators. A producer cannot conspire to fix prices on its own without its cooperating retailer. See David v. Loblaw Companies Limited, 2022 ONSC 3486, para. 3. [Emphasis added.]
[36] As a result, the motions judge approved the definition of “Class” in the Certification Order which limits the class of plaintiffs to those persons who purchased packaged bread from a defendant retailer that was made by a defendant producer.
[37] In providing this explanation, I find that the motions judge satisfied the onus to explain the modification: SS&C Technologies Canada Corp. v. The Bank of New York Mellon Corporation, 2022 ONCA 373, 162 O.R. (3d) 753, at para. 21.
[38] The interests of justice were served by the opportunity for clarification that the settling of the Certification Order provided. The motions judge did not purport to change the Reasons and, as he stated, at para. 3 of his Endorsement, the approved definition of “Class” in the Certification Order “matches my reasons for decision.”
[39] I therefore would not give effect to this ground of appeal.
Issue #2: Did the motion judge misinterpret the Claim?
[40] In David v. Loblaw Companies Limited, 2022 ONCA 833, at para. 11, Doherty J.A., in the course of finding that the appeal from the decision of the motions judge lay to the Divisional Court, with leave, rather than the Court of Appeal, stated:
The motion judge defined the class to reflect his understanding of the nature and scope of the allegations advanced by the plaintiffs. He read the claim as requiring that persons harmed by the conspiracy include only persons who had acquired packaged, manufactured bread that had passed through both a defendant producer and a defendant retailer.
[41] The plaintiffs submit that the motions judge misinterpreted the Claim by not appreciating that it was alleged that the Claim alleges that the conspiracy resulted in the fixing of two separate prices and thus the nature and scope of the allegations includes all direct and indirect purchasers of packaged bread.
[42] The plaintiffs’ Certification Factum, at para. 36, states:
The Defendants’ experts’ reports are based on a misunderstanding of this case. They believe, contrary to the pleadings, that there are two separate conspiracies – one between producers and one between retailers – and that each must be considered separately. But that is not what this case is about. It involves a single conspiracy between all the major producers and retailers of bread products in Canada in which they together agreed to divide up between them the overcharge they imposed on consumers according to a formula, and as a result caused other bread prices to be inflated. The complicated analysis the Defendants’ experts advance is therefore simply unnecessary to address the impact of a conspiracy where most class members are direct purchasers from the conspirators and any indirect purchasers bought bread products easily analysed supply chains. [Emphasis added.]
[43] Dr. Leitzinger states in a report dated October 2, 2020:
… plaintiffs allege a single conspiracy involving both manufacturers and retailers, creating overcharges in prices paid to the conspiring manufacturers and ensuring that the conspiring retailers would be able to pass through those overcharges to their customers. Plaintiffs are not alleging multiple conspiracies both among manufacturers and separately among retailers that operate independently.
[44] I agree with the defendants’ submission that the plaintiffs cannot insist on a class definition that reflects a theory of the case that they disavowed in their Certification Factum and in their expert’s evidence.
[45] I therefore would not give effect to this ground of appeal.
Issue #3: Did the motion judge otherwise err by refusing to certify the claims of the Indirect Purchasers?
[46] The plaintiffs submit that the once the motions judge found that the direct and indirect purchasers met all the requirements for certification set out in s. 5(1) of the CPA, he was required to certify their claims. In other words, the plaintiffs submit that there is no basis in law to limit the class of plaintiffs to only those persons who purchased packaged bread from a defendant retailer that had been produced by a defendant bakery.
[47] While there is no dispute that all direct, indirect and umbrella purchasers may, in theory, claim damages under s. 36 of the Competition Act for price fixing, I agree with the motions judge that, in this class action, the definition of the class must align with the nature of the conspiracy that has been asserted.
[48] I therefore would not give effect to this ground of appeal.
Disposition
[49] For these reasons, the appeal is dismissed.
[50] The parties have agreed that costs of this appeal shall be fixed at $40,000.00, all inclusive, to be awarded to the successful party on appeal. Accordingly, the plaintiffs shall pay costs of this appeal to the defendants in the amount of $40,000.00 within thirty days.
Faieta J.
I agree _______________________________
E. Stewart J.
I agree _______________________________
Mew J.
Released: February 26, 2024
CITATION: David v. Loblaw Companies Limited, 2024 ONSC 1157
DIVISIONAL COURT FILE NO.: 345/22
COURT FILE NO.: CV-17-586063-00CP
DATE: 20240226
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
E. Stewart, Mew and Faieta, JJ.
BETWEEN:
MARCY DAVID, BRENDA BROOKS and ANDREW BALODIS
Plaintiffs (Appellants)
– and –
LOBLAW COMPANIES LIMITED, GEORGE WESTON LIMITED, WESTON FOODS (CANADA) INC., WESTON BAKERIES LIMITED, CANADA BREAD COMPANY, LIMITED, GRUPO BIMBO, S.A.B. DE C.V., MAPLE LEAF FOODS INC., EMPIRE COMPANY LIMITED, SOBEYS INC., METRO INC., WAL-MART CANADA CORP., WAL-MART STORES INC. and GIANT TIGER STORES LIMITED
Defendants (Respondents)
REASONS FOR DECISION
Faieta J.
Released: February 26, 2024