Law Times

Page 12 September 21, 2015 • Law timeS www.lawtimesnews.com Fanshawe College v. AU Optronics Court weighs in on discoverability in price-fixing cases BY JULIUS MELNITZER For Law Times I n Fanshawe College v. AU Op- tronics, the Ontario Superior Court of Justice ruled that the discoverability principle applies to the limitation period found in s. 36(4)(a) of the Com- petition Act. The legislation makes it an offence to fix prices. Section 36(1) allows anyone who suf- fers loss as a result of such con- duct to sue privately. Section 36(4), however, requires a party to bring such an action within two years of the day the conduct occurred or the disposition of related criminal proceedings, whichever came later. Plaintiffs have also based their claims on the common law civil tort of conspiracy. But whether or not such a cause of action exists is unclear. "Plaintiffs who bring these actions tend to bring them both under s. 36 and under the civil tort of conspiracy and other torts," says Michael Brown of Norton Rose Fulbright Canada LLP. "Fanshawe is important be- cause there is an ongoing dis- pute as to the viability of certain common law causes of action to prosecute civil antitrust cases." The Fanshawe College of Ap- plied Arts and Technology is a community college based in London, Ont. It purchased tele- visions, computers, and laptops containing large liquid crystal display panels for use in its fa- cilities. The college, acting as a rep- resentative plaintiff, brought a proposed class action in July 2009. It alleged that various companies, including AU Op- tronics Corp. and Hannstar Display Corp., unlawfully con- spired to artificially inf late the price of the liquid crystal dis- play. The claim, commenced in July 2009, asserted causes of action both under the Com- petition Act and the common law tort of civil conspiracy and covered the period from Jan. 1, 1998, to Dec. 11, 2006. AU Optronics and Hannstar moved for summary judgment. They alleged the action was outside the two-year limitation periods in the Competition Act (regarding the statutory claim) and Ontario's Limitations Act (regarding the common law claim). Unlike the Limitations Act, the Competition Act doesn't specifically provide that its limitation periods are subject to discoverability. The law is unclear on the issue, but a series of cases in the Federal Court and various provincial superior and appellate courts, including the Alberta Court of Appeal, the British Columbia Supreme Court, and the Ontario Superi- or Court, suggest discoverabili- ty doesn't in fact apply to extend the operation of s. 36(4). "The argument that discov- erability does not apply to the Competition Act has become more enticing to defendants in light of certain recent decisions, particularly in British Columbia, holding that tort proceedings are not an appropriate basis for viola- tions of the statute," says Charles Wright of Siskinds LLP in Lon- don. Wright acted as counsel for Fanshawe. But Justice Duncan Grace dismissed the motion for sum- mary judgment in Fanshawe. Among other things, he ruled that discoverability does apply to the limitation period in s. 36(4). "The court reasoned that because conspirators can be ex- pected to conceal their conduct, affected individuals may not find out about the conspiracies until more than two years after the conduct has ended," says Brown. "As such, if discoverabil- ity does not apply to the section 36(4) limitation period, indi- viduals may see their rights of action expire before they learn about possible harm." Wright says Grace's logic makes sense. "If the court had interpreted the Competition Act the way the defendants wanted it inter- preted, the statutory right of action would verge on being a useless instrument because of the secret conspiracies that are often the basis of these claims," he says. "I can't imagine that Parliament intended the legisla- tion to work that way." Wright also believes that if the law ultimately resolves in the defendants' favour, legisla- tive amendments would be in order. "It would have to be fixed one way or another," he says. The Divisional Court may soon be ruling on the issue: AU Optronics and Hannstar have filed an application for leave to appeal. LT FOCUS THE RIGHT CONNECTIONS MADE EASY Alberta Legal Telephone Directory is all about your legal community connecting you to the lawyers and law offices you need in Alberta, Northwest Territories, Nunavut and Yukon. 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