CITATION: Fanshawe College v. AU Optronics, 2015 ONSC 3414

COURT FILE NO.: 62858CP

DATE: 20150528

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

THE FANSHAWE COLLEGE OF APPLIED ARTS AND TECHNOLOGY

C. Wright and L. Visser, for the Plaintiffs

Plaintiff

• and -

AU OPTRONICS CORPORATION, CHI MEI CORPORATION, CHI MEI OPTOELECTRONICS CORPORATION, NEXGEN MEDIATECH INC. and HANNSTAR DISPLAY CORPORATION

J.K. McEwan and E.A. Kirkpatrick, for the Defendant AU Optronics Corporation

S. Kugler for the Defendant HannStar Display Corporation

Defendants

HEARD: February 27, 2015

Grace J.

A. Background

1On March 31, 2015, I dismissed the motions for summary judgment brought by AU Optronics Corporation (“AU”) and HannStar Display Corporation (“HannStar”).

2Before the return date of those motions, the Fanshawe College of Applied Arts and Technology (“Fanshawe”) filed a motion seeking leave to deliver a Fresh as Amended Statement of Claim (the “proposed pleading”).

3The proposed pleading would change the existing action in two respects.

4First, Mass Engineered Design Inc. (“Mass”) would be added as a named plaintiff. Second, the text of the claim would be changed to include, among other things, “LCD Panels” as a new defined term.

5The parties do not agree whether the proposed amendments are cosmetic or substantive. AU and HannStar oppose the granting of the relief sought.

6AU maintains that the language relating to LCD Panels has the effect of enlarging the action to include a wider range of items and persons such as Mass who purchased them.

B. Analysis and Decision

7Rule 5.04(2) of the Rules of Civil Procedure allows the court to add a party at any stage of the proceeding “on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.”

8A person should not be added as a plaintiff if the limitation period applicable to their claim has clearly expired.¹

9An affidavit of Jerry Moscovitch, the president of Mass, was filed in support of the motion. Mr. Moscovitch acknowledged that on June 25, 2012 Mass was contacted about this action by the solicitors having carriage of the class proceeding on behalf of Fanshawe. On August 22, 2012, Mass retained that firm “to pursue claims on its behalf relating to the pricing of LCD Panels and Products.”²

10This motion was not filed until August 29, 2014.

11This action is and would continue to be based on two causes of action: conspiracy and a breach of Part VI of the Competition Act, R.S.C. 1985, c. C-34.³ On its face, the conspiracy claim of Mass is barred by s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, sch. B. In part, that section provides that:

a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

12Similarly, a claim by Mass under s. 36(1) of the Competition Act would appear to be too late. The operative portion of section 36(4)(a) of that statute reads as follows:

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

a day on which the conduct was engaged in…

13Even if discoverability is an element of that section, by its own admission Mass discovered the allegedly wrongful conduct of the defendants more than two years before it asked to be joined as a party.

14Mass submits that the applicable limitation periods have not expired because they were suspended – or tolled – when this action was commenced by Fanshawe on July 20, 2009. Mass relies on s. 28(1) of the Class Proceedings Act, S.O. 1992, c. 6.

15That subsection suspends limitation periods applicable to the causes of action raised in the action “in favour of a class member” until one of six stipulated events occurs. None of those has happened.

16The issue is whether Mass is, as it submits, already a class member or whether, as AU argues, the amendments would have the effect of expanding the claim to add a new category of purchaser.

17In the existing statement of claim Fanshawe asks for certain relief “on behalf of themselves [sic] and other persons in Canada who are similarly situated”.⁴

18Paragraph 1(a) of the statement of claim seeks:

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”)

19Under the heading “Nature of the Action”, Fanshawe described the items to which the action relates. Paragraph 4 of the current statement of claim states:

While LCD is 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 panel LCDs used in televisions, computer monitors and laptops.

20The present pleading alleges that the defendants and others conspired “to enhance unreasonably the prices of LCD Products and to lessen unduly competition in the production, manufacture, sale and/or supply of LCD Products in North America.”⁵

21Fanshawe alleges that it paid more for LCD Products than would have been paid in the absence of the alleged conspiracy and that damages have been suffered for which compensation is sought.⁶

22In the proposed pleading Fanshawe and Mass also ask for certain relief “on behalf of themselves and other persons in Canada who are similarly situated”.⁷

23As in the existing statement of claim, paragraph 1(a) of the proposed pleading seeks a declaration. However, it introduces “LCD Panels” as a new term. The proposed modifications to that paragraph are underlined. The amended version asks for:

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”)

24Once again under the heading “Nature of the Action”, the plaintiffs describe the items to which the action relates. With the exception of the underlined words the amended paragraph 4 is identical to what appeared before. The amended paragraph 4 reads:

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.

25Had the amendments stopped there I would have added Mass. I would have concluded the motion was brought to ensure that there was still a “representative plaintiff…anchored in the proceeding as a class member” even if AU and HannStar had obtained a dismissal of Fanshawe’s claims because of the expiry of limitation periods.⁸

26In that event, I also would have concluded that the consequent amendments were cosmetic refinements to the existing language and would have authorized their making under rule 26.01 of the Rules of Civil Procedure.

27However, AU’s concern that the motion seeks to do much more is well-founded.

28Paragraphs 7 and 8 of the proposed pleading introduces Mass in these terms:

7. The plaintiff, MASS Engineered Design Inc. (“Mass Multiples”) is a corporation based in Toronto, Ontario.

8. During the Conspiracy Period, Mass Multiples purchased LCD Panels for use in the design and manufacturing of multiple-display products.

29While the words “multiple-display products” are not defined, the words televisions, computer monitors and/or laptops are not used in connection with Mass.

30That appears to explain why the proposed pleading has been enlarged to allege that the defendants and others conspired “to enhance unreasonably 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.”⁹ [Italics added]

31It 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.¹⁰ [Italics added]

32When 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.

33In 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 CPA. The commencement of this action had no effect on the limitation periods relating to Mass’ claims. Those periods have expired.

34In 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.

35The plaintiff’s motion for leave to serve and file a Fresh as Amended Statement of Claim in the form attached as schedule “A” to the notice of motion is dismissed.

36If the parties are unable to resolve the issue of costs, brief submissions not exceeding three typed pages may be delivered by AU and HannStar by no later than June 19, 2015 and by Fanshawe by no later than July 3, 2015.

Footnotes

1. 1Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 2001 CanLII 8620 (ON CA), 56 O.R. (3d) 768 (C.A.) at para. 25; Pepper v. Zellers Inc. (2006), 2006 CanLII 42355 (ON CA), 278 D.L.R. (4th) 175 (Ont. C.A.) at paras. 8 - 43. The concept of “special circumstances” is referenced in both of those decisions. It no longer applies. See, too, Moore v. Moore Estate, 2001 ONSC 6728 (S.C.J.) at para. 39; Wong v. Adler (2004), 2004 CanLII 8228 (ON SC), 70 O.R. (3d) 460 (Master) at para. 45, aff’d (2005), 2004 CanLII 73251 (ON SCDC), 76 O.R. (3d) 237 (S.C.J.).
2. 2That excerpt is drawn from para. 11 of the Moscovitch affidavit.
3. 3The statement of claim also mentions intentional interference with economic interests. The plaintiff confirmed that it does not intend to pursue that claim at para. 10 of its factum.
4. 4That excerpt is drawn from the preamble to para. 1.
5. 5That excerpt is drawn from para. 38 of the statement of claim.
6. 6That allegation is set forth in para. 48 of the statement of claim.
7. 7That excerpt is drawn from the preamble to para. 1.
8. 8Stone v. The Wellington County Board of Education et al., 1999 CanLII 1886 (ON CA), [1999] O.J. No. 1298 (C.A.) at para. 10.
9. 9That excerpt is drawn from para. 40 of the draft Fresh as Amended Statement of Claim.
10. 10That allegation is contained in para. 50 of the draft Fresh as Amended Statement of Claim