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Key points from the new Supreme Court trilogy

Trials & Tribulations
|Written By Margaret L. Waddell
Key points from the new Supreme Court trilogy

The viability of price-fixing class actions brought on behalf of indirect purchasers was in legal limbo for a decade, particularly after the Ontario Court of Appeal denied certification in Chadha v. Bayer Inc.. But the long-awaited decisions of the Supreme Court of Canada in a trilogy of price-fixing class actions, Pro-Sys Consultants Ltd. v. Microsoft Corp., Sun-Rype Products Ltd. v. Archer Daniels Midland Co., and Infineon Technologies AG v. Option consommateurs, have finally put to rest the uncertainty over whether such actions are tenable.  

To cut to the chase, the answer to the question is yes, indirect purchasers do have a cause of action against price-fixers, and the evidentiary burden they must meet to achieve certification is low. Undoubtedly, there will be a profusion of case commentaries addressing the main issues decided on these appeals. I will leave that to the others.  

Instead, in this month’s column I would like to highlight the many other pieces of buried legal treasure to be found in these new cases of highest authority.

Waiver of tort is still a mystery

In an earlier article last December, I bemoaned the fact that the trial decision in Andersen v. St. Jude Medical Inc. did not resolve the debate about whether waiver of tort is a standalone cause of action or “parasitic” of the underlying tort. Ah well, thought I and many others, surely the Supreme Court will answer that burning question as soon as it gets before them. And so it was put before the Court in these cases.  

But, alas, no. The Supreme Court has also dodged the bullet and simply left for another day to resolve the details of the law of waiver of tort, or the circumstances in which it can be pleaded.

However, the Supreme Court may have tipped its hand on the issue by describing waiver of tort as a restitutionary claim, and apparently citing with approval from authorities that speak of it as a cause of action which focuses on recovery of the defendant’s unjust enrichment.  If that is the focus of the inquiry, it suggests that proof of the plaintiff suffering a loss should not be required. More to follow, eventually, no doubt.

Restitution

The basic principle of restitution is to restore to the plaintiff that which has been taken or received from the plaintiff without justification. It puts the plaintiff back into the position that she was in prior to the wrongful act and therefore it cannot ever result in the plaintiff receiving a windfall, and mitigation is irrelevant. The focus is on disgorgement of gains the defendant achieved through wrongdoing and returning them to the ultimate victim.

Unjust enrichment

It is possible that a claim for unjust enrichment may be made even where the benefit received by the defendant was not received directly from the plaintiff, for example where it was passed on by a third party.

Constructive trust

To establish a claim for a constructive trust, the plaintiff must show a link between the money she has been deprived of and the specific property over which the trust is to be placed. There must be some referential property. A constructive trust is awarded when the plaintiff establishes that a monetary award is inappropriate or insufficient. The burden rests with the plaintiff to show why a monetary award will not suffice.

Conspiracy actions are here to stay, for now

There are two forms of economic torts of conspiracy: predominate purpose conspiracy and unlawful means conspiracy. They are well-accepted torts, and at least for now they remain intact, pending the SCC release of its decision in Bram Enterprises, currently under reserve.  

•    Predominate purpose conspiracy is made out when the “predominate purpose” of the defendant’s conduce is to cause injury to the plaintiff using either lawful or unlawful means, and the plaintiff does in fact suffer a loss as a result of that conduct.

•    Unlawful means conspiracy requires the defendant to engage in unlawful conduct directed towards the plaintiff, with knowledge that injury to the plaintiff is likely to result, and the injury does in fact occur.

Complexity of proof of damages is not a bar to certification

It is no defence to a motion for certification for the defendant to argue that the evidentiary burden the plaintiff will be assuming is too high, or that the complexity of proving loss is too onerous. The burden rests on the plaintiff to make out his case at trial, and so long as he can show there is methodology by which the damages (i.e. pass through of the increased price) reasonably can be proven at trial, then that meets the low evidentiary threshold. The plaintiff is assuming the risks and burdens of proving his case, and whether he fails or succeeds will be determined at trial, not at the certification motion.

The standard of proof for certification

The mischief caused by an academic article authored by Cullity J. has been stamped out for good. In that article, the now retired class actions judge posited that the standard of proof on certification should be higher than that established by the Supreme Court in Hollick v. Toronto (City). Particularly he pondered whether it should be the usual civil standard of a balance of probabilities. He was wrong; the Supreme Court was right. They have said so, again.


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