Law Times

Law Times • sepTember 27, 2010 NEWS Court offers guidance on abuse of dominance BY JULIUS MELNITZER For Law Times H istorically, Canadian courts have taken the position that abuse of dominance wasn't an unlawful act that could form the basis of a common law tort claim. But in March 2009, Par- liament amended the Com- petition Act by allowing the Competition Tribunal to im- pose administrative monetary penalties of up to $15 million for abuse-of-dominance viola- tions. Previously, the tribunal only had the power to issue in- junctions to prohibit the con- tinuation of the conduct and make orders to restore compe- tition in the future. "Th e amendments stirred up arguments that the large fi nes now associated for past instances of abuse of domi- nance made such behaviour unlawful when it occurred and not just going forward," says Anita Banicevic of Davies Ward Phillips & Vineberg LLP. "It caused some concern in the business community for whom it is important to know what the consequences are, whether it's the imposition of [the ad- ministrative penalties] or civil liability or both." On July 22, Justice Bruce Greyell of the Supreme Court of British Columbia dealt with the issue in Novus Entertain- ment Inc. v. Shaw Cablesystems Ltd. "Novus Entertainment v. Shaw is the fi rst case to con- sider the nature of the amend- ment and whether it can form the basis of a civil claim," Ban- icevic says. Th e case arose from an ad- vertising campaign Shaw con- ducted in 2009. Novus claimed the promotional pricing off ered by Shaw was below cost and amounted to anti-competitive behaviour. It followed up with a claim founded on the tort of unlawful interference with busi- ness and economic interests. "Novus argued that the amendments to the act permit- ting [penalties] for past conduct constituting an abuse of domi- nance meant that Parliament had changed the fundamental nature of such conduct so that it became unlawful when it oc- curred," Banicevic says. But the court rejected No- vus' argument. "In my view, the amend- ments to the act do not change the rationale underlying the [precedents]," Greyell wrote. "While the amendments have the eff ect of allowing the tri- bunal to consider a respon- dent's prior conduct in the de- termination of any monetary penalty it might impose under the act, the tribunal must fi rst make an order under s. 79(1) that a respondent has engaged or is engaging in anti-compet- itive acts." that the tribunal could impose an [administrative penalty] only if it also issues a remedial order but that it has a discretion not to issue such an order even where the conduct amounts to abuse of dominance," Ban- icevic notes. Accordingly, the court struck the portion of Novus' pleadings based on the abuse- of-dominance claim. Banicevic believes the busi- ness community will welcome the decision. "In many cases, particularly Anita Banicevic believes the business community will wel- come the Novus decision. In other words, the lawful- ness or unlawfulness of a de- fendant's conduct was subject to a fi nding by the tribunal. "Greyell also pointed out where allegations of low pric- ing are raised, it can be diffi cult to distinguish acceptable vigor- ous competition from conduct that is abusive," she says. "A re- duced prospect of civil actions will help provide Canadian businesses with greater confi - dence to compete vigorously in their markets." LT PAGE 5 The Law of Contracts Sixth Edition A classic text, The Law of Contracts has been cited repeatedly by the courts, including the Supreme Court of Canada. This work looks beyond the surface rules of this complex area of law to identify the underlying conflicting principles, so you're never in doubt about their implications. The sixth edition has been revised and updated to incorporate all the latest developments in contract law. New! Twelve recent Supreme Court of Canada Cases are referenced as well as relevant provincial Court of Appeal and Superior Court Cases. Hundreds of cases and issues are analyzed including: • • a number of issues in regards to: - Parol Evidence Rule - Tender Cases - Duty of Good Faith - Limitation of Liability Clauses - Notional Severance - Municipal Immunity from Contractual Liability Includes more than 4,000 cases The Law of Contracts, Sixth Edition delivers the same clear explanation and analysis of the law and its applications that practitioners have relied on for years. - Specific Performance - Exemplary and Punitive Damages - Damages for Mental Distress for Breach of Contract English and commonwealth cases that could potentially affect Canadian jurisprudence ORDER your copy today Hardbound • 802 pp. • June 2010 • $165 P/C 0819010006 • ISBN 918-0-88804-503-4 canadalawbook.ca For a 30-day, no-risk evaluation call: 1.800.565.6967 Canada Law Book, a Thomson Reuters business. Prices subject to change without notice, to applicable taxes and shipping & handling. LT0927 www.lawtimesnews.com LT0920 Professor Stephen M. W addams

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• Libel Woes
• Legal Circus
• Focus On Business/Competition Law