



COURT OF APPEAL FOR ONTARIO

CITATION: Fanshawe College of Applied Arts and Technology v.
    AU Optronics Corporation, 2016 ONCA 621

DATE: 20160811

DOCKET: C60670 & C61994

Hoy A.C.J.O., Laskin and Hourigan JJ.A.

BETWEEN

C60670

The Fanshawe College of Applied Arts and
    Technology

Plaintiff (Appellant)

and

AU
    Optronics Corporation, Chi Mei Corporation,

Chi
    Mei Optoelectronics Corporation,

Nexgen
    Mediatech Inc., and
HannStar Display Corporation

Defendant
s (
Respondent
)

AND BETWEEN

C61994

The Fanshawe College of Applied Arts and
    Technology

Plaintiff (Respondent)

and

AU
    Optronics Corporation, Chi Mei Corporation,

Chi
    Mei Optoelectronics Corporation,

Nexgen
    Mediatech Inc., and
HannStar Display Corporation

Defendants
    (
Appellant
)

Charles M. Wright, Paul Bates, and Reidar Mogerman, for
    Fanshawe College of Applied Arts and Technology

John Callaghan and Alex Zavaglia, for HannStar Display
    Corporation

Heard: June 16, 2016

On appeal from the orders of Justice A. Duncan Grace of
    the Superior Court of Justice, dated March 31, 2015 and May 28, 2015, with
    reasons reported at 2015 ONSC 2046 and 2015 ONSC 3414.

Hourigan J.A.:

Overview

[1]

There are two appeals before the court. They
    arise in the context of a putative class action where the representative
    plaintiff, Fanshawe College of Applied Arts and Technology (Fanshawe),
    asserts that it and other members of the proposed class were victims of a price-fixing
    conspiracy in the liquid crystal display (LCD) industry.

[2]

In the first appeal, the defendant HannStar
    Display Corporation (HannStar) appeals the order of the motion judge
    dismissing its motion for summary judgment (the HannStar Appeal).

[3]

In the second appeal, Fanshawe appeals the order
    of the motion judge dismissing its motion for leave to amend the statement of
    claim (the Fanshawe Appeal).

[4]

For the reasons that follow, I would dismiss the
    HannStar appeal and grant the Fanshawe Appeal.

Background Facts

[5]

On December 13, 2006, news agencies around the
    world reported that various LCD manufacturers were being investigated regarding
    allegations of price-fixing in their industry. Media coverage of the
    investigations continued throughout 2007. Various class actions in the United
    States followed.

[6]

The first proposed class action in Canada
    alleging price-fixing in the LCD industry was commenced in British Columbia on
    March 6, 2007. AU Optronics Corporation (AU) and HannStar, among others, were
    named as defendants. Both AU and HannStar are Taiwanese corporations.

[7]

In Ontario, the Siskinds law firm commenced a
    class action on May 2, 2007 (the First Ontario Action). None of the
    defendants in the First Ontario Action was based in Taiwan. However, AU and HannStar,
    among others, were named in the body of the statement of claim as alleged
    co-conspirators. Siskinds says that the Taiwanese companies were not made
    defendants because they did not want to impede the progress of the action while
    service in Taiwan was being effected.

[8]

Over two years later, on July 20, 2009, this
    action was commenced against various Taiwanese corporations, with Fanshawe
    serving as the proposed representative plaintiff.  AU and HannStar were named
    as defendants. In this action, Fanshawe asserts a claim in civil conspiracy and
    a claim pursuant to s. 36 of the
Competition Act
, R.S.C. 1985, c.
    C-34, predicated on a breach of s. 45 of the Act, the provision that makes
    conspiracies to fix prices illegal. The conspiracy period was alleged to be
    from January 1, 1998 to December 11, 2006.

[9]

AU and HannStar brought a motion for summary
    judgment, asserting that the action was time-barred pursuant to the
Limitations
    Act, 2002
, S.O. 2002, c. 24, Sched. B, and pursuant to s. 36(4)(a) of
    the
Competition Act
and was an abuse of process. The parties filed
    affidavit material on the motion. Fanshawe also served a motion to amend its
    claim, including amendments to add MASS Engineered Design Inc. (Mass) as
    another representative plaintiff.

[10]

In an affidavit filed on behalf of Fanshawe in
    the summary judgment motion, David Smith, Fanshawes Manager of Retail
    Services, swore that Fanshawe became aware of a potential claim in January 2008
    when a lawyer at Siskinds retained on unrelated matters informed Fanshawe that
    it might have been impacted by the alleged conspiracy. Fanshawe retained
    Siskinds on January 24, 2008 to pursue the litigation on its behalf. However,
    during his cross-examination on his affidavit, Mr. Smith testified that Fanshawe
    first had discussions about this litigation with Siskinds in the spring of 2007,
    more than two years before July 2009 when the action was commenced. After the cross-examination,
    Fanshawe brought a motion to file a supplementary affidavit clarifying the
    timing of the initial discussions with Siskinds.  The motion judge denied that
    motion.

[11]

The motion for summary judgment was heard on
    November 13, 2014, and was dismissed in written reasons released on March 31,
    2015. With respect to the civil conspiracy claim, the motion judge ruled that Fanshawes
    evidence demonstrated that there is a genuine issue requiring a trial as to
    whether the presumption of knowledge set forth in s. 5(2) of the
Limitations
    Act
had been rebutted. He concluded that there was not sufficient clarity
    in the evidence regarding
whether Fanshawe knew or
    ought to have known of the elements set forth in s. 5(1)(a) of the
Limitations Act
t
o make a dispositive finding
based on the
    evidence before him.
The motion judge also found that
    the discoverability rule applies to the limitation period in s. 36(4)(a) of the
Competition Act
. Finally, he held that commencing this action more
    than two years after the Ontario Action, an action involving the same putative
    class and alleged co-conspirators, was not an abuse of process.

[12]

The motion for leave to amend the statement of
    claim in this action was heard on February 27, 2015, and was dismissed in
    written reasons dated May 28, 2015. The motion judge denied leave to amend on
    the basis that the amendments constituted an expansion of the claims asserted
    and were statute-barred.

[13]

Fanshawe commenced an appeal in this court. AU
    and HannStar also brought an appeal to this court.

[14]

In an endorsement dated November 24, 2015, this
    court quashed AU and HannStars appeal on the basis that the order below is
    interlocutory and, therefore, leave must be sought for the appeal to be heard
    by Divisional Court. Fanshawe conceded that nothing in the order dismissing the
    motion for summary judgment, or in the reasons of the motion judge in support
    of that order, precludes AU and HannStar from advancing at trial their
    arguments regarding s. 36(4) of the
Competition Act
or abuse of
    process as substantive defences or otherwise:
Fanshawe College of Applied
    Arts and Technology v. AU Optronics Corporation
, 2015 ONCA 808, at para.
    1.

[15]

AU and HannStar then brought a motion in writing
    in Divisional Court for leave to appeal the order of the motion judge
    dismissing the summary judgment motion to that court. Rady J. granted leave to
    appeal. As I will discuss below, there is some confusion regarding the scope of
    her order.

[16]

The parties then argued two motions in this
    court before Huscroft J.A. AU and HannStar brought a motion to consolidate the
    HannStar Appeal with the Fanshawe Appeal. That motion was granted. Fanshawe
    brought a motion to strike paragraphs in AUs and HannStars factums in the
    Fanshawe Appeal on the basis that the factums raised issues that went beyond
    the scope of the motion judges reasons. That motion was dismissed. However,
    Fanshawe was granted leave to file a reply factum on the additional issue raised
    by the respondents in the Fanshawe Appeal: whether a breach of s. 45 of the
Competition
    Act
can serve as the unlawful means in a civil conspiracy claim.

[17]

Prior to the hearing of the appeals, AU entered
    into a settlement agreement with Fanshawe.

Issues

[18]

The issues raised on these appeals and my conclusions
    on each issue may be summarized as follows:

(i) Does this court have the jurisdiction
    to consider the appeal of the motion judges ruling that there is a genuine
    issue for trial regarding whether the limitation period has expired for the civil
    conspiracy claim?

No. The
    order was interlocutory. An appeal lay to the Divisional Court with leave. On
    the motion for leave, the motion judge granted leave on the sole issue of
    whether the discoverability principle applied to s. 36(4)(a)(i) of the
Competition
    Act
. Huscroft J.A. ordered that the Fanshawe Appeal and the HannStar Appeal
    be heard together in this court. He only had jurisdiction to combine the
    Fanshawe Appeal with what was pending in the Divisional Court. Because leave
    had not been granted on the issue of the expiry of the limitation period for
    the conspiracy claim, that issue could not be combined with the Fanshawe Appeal.
    Accordingly, we have no jurisdiction to hear the appeal of the motion judges
    ruling on that issue.

(ii) Did the motion judge err
    in finding that the discoverability principle applies to the limitation period
    found in s. 36(4)(a)(i) of the Competition Act?

No. Subsection
    36(4)(a)(i) is subject to the discoverability principle. A statutory limitation
    period will generally be subject to the discoverability principle when the
    running of the limitation period is linked either to the plaintiffs knowledge
    about an event or to an event related to the plaintiffs cause of action. The
    limitation period in s. 36(4)(a)(i) is triggered by an event related to the
    underlying cause of action  specifically, conduct contrary to Part VI of the
Competition
    Act
. Therefore, it is subject to discoverability.

(iii) Did the trial judge err
    in refusing to grant leave to amend the statement of claim?

Yes.
    The motion judge erroneously concluded that the proposed amendments to the
    statement of claim had the effect of broadening the subject matter of the claim
    from LCD products to LCD products and LCD panels. In fact, both items were
    always part of the claim. The motion judge erred, therefore, in refusing to grant
    leave to amend.

(iv) Is it plain and obvious
    that a breach of s. 45 of the Competition Act cannot serve as the unlawful
    means for a civil conspiracy claim?

No. Prior to the enactment of what is now s. 36 of the
Competition
    Act
, a breach of Part VI of the Act could serve as the unlawful means in a
    civil conspiracy. If Parliament intended to take away this existing common law
    right it would have to have done so in the clearest of terms. It did not. The
    weight of appellate authority on the point, including a case from this court, supports
    the view that a breach of Part VI of the
Competition Act
may serve as
    the unlawful means in a civil conspiracy.

Analysis

(i)

Jurisdiction

[19]

At the outset of oral argument, the panel raised
    with counsel for HannStar whether we had jurisdiction to hear his clients
    appeal of the ruling that there was a genuine issue requiring a trial regarding
    whether Fanshawes civil conspiracy claim was statue-barred.  We heard argument
    on both this jurisdictional point and the merits of HannStars appeal on this
    issue.

[20]

As mentioned above, this appeal has an unusual
    procedural history. AU and HannStar first brought their appeal to this court.
    We found that the appeal was interlocutory. Therefore, the proper appeal route
    was to seek leave to appeal in the Divisional Court. AU and HannStar then
    brought a motion before a single judge of the Divisional Court, Rady J.

[21]

It is worth reviewing in some detail Rady J.s endorsement
    because there is confusion regarding its effect. After reviewing the test for
    leave to appeal an interlocutory order to the Divisional Court in r. 62.02(4)
    of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, she found the
    following:

[7]      First however, it is important to note that the
    motions judge made no final determination with respect to the limitation
    issues. Rather, he concluded that he was unable to determine when the plaintiff
    knew of its cause of action on the strength of the record before him.  The
    issues remain live to be fully litigated either at the common issues trial or
    any trial of individual issues.  This, in my view, tends to militate against
    granting leave to appeal.

[8]      However, I am persuaded that leave should be granted
    with respect to whether discoverability applies to the limitation period in the
Competition Act
. The motions judge concluded that it did

[22]

Rady J. then went on to review the motion
    judges analysis of the issue and the conflicting jurisprudence on the issue,
    concluding, at para. 10, that i
t is apparent that
    there is conflicting authority on this issue, which the motions judge
    recognized. She then concluded as follows:

[11]    I am persuaded that it is desirable that leave be
    granted. The question of whether s. 36(4) of the
Competition Act
is
    subject to discoverability is a question of statutory interpretation that is of
    considerable importance to the competition class action bar. It appears to me
    that the law is unsettled on the point. It would therefore be helpful to have
    appellate jurisprudence on the issue.

[23]

Unfortunately, when the order was taken out it
    provided only that leave to appeal is granted and did not specify the issue
    for which leave was granted.

[24]

The law is clear that an appeal lies from an
    order and not from the trial judges reasons for that order. For example, a
    party may not appeal an unfavourable conclusion drawn by the trial judge in his
    or her reasons that was not part of the order binding the parties:
Grand
    River Enterprises v. Burnham
(2005), 10 C.P.C. (6th) 136 (Ont. C.A.), at
    para. 10.

[25]

In the present case, the order at issue is not
    the order being appealed from, but the order defining the issues for which
    leave to appeal has been granted. A review of the order in the context of the
    reasons, makes clear that it is incompatible with its underlying rationale.
    Having reviewed the reasons, I conclude that Rady J. intended to grant leave to
    appeal on the discrete issue of whether the discoverability principle applies
    to the limitation period in s. 36(4).

[26]

On an appeal of an interlocutory order in the
    Divisional Court, an appellant is restricted to arguing the issues on which it
    was granted leave to appeal. It may not raise additional issues on which it was
    not granted leave:

see
Locking v. Armtec Infrastructure Inc.
,
    2012 ONSC 7274 (Div. Ct.), at paras. 16-18.

[27]

The Court of Appeals power to consolidate
    appeals and its complementary power to transfer appeals are found in ss. 6(2)
    and 6(3) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43, which
    provide as follows:

(2)

The Court of Appeal has jurisdiction to hear and
    determine an appeal that lies to the Divisional Court or the Superior Court of
    Justice if an appeal in the same proceeding lies to and is taken to the Court
    of Appeal.

(3) The
    Court of Appeal may, on motion, transfer an appeal that has already been
    commenced in the Divisional Court or the Superior Court of Justice to the Court
    of Appeal for the purpose of subsection (2).

[28]

Until the motion before Rady J. was heard, there
    was no appeal in the Divisional Court because leave had not been granted. The
    result of her order was that an appeal restricted to the issue of the applicability
    of the discoverability principle to s. 36(4)(a)(i) of the
Competition Act
was before the Divisional Court.

[29]

Huscroft J.A. made an order consolidating the
    appeals but that order was necessarily restricted to the proceedings that were
    pending at the time of his order. He had no statutory authority to, and did not
    purport to, consolidate appeals that were not extant at the time of his order.
    Accordingly, this court has no jurisdiction to hear any issue that was not
    before the Divisional Court.

[30]

To be clear, if the appeal had stayed in the
    Divisional Court, HannStar would have been restricted to arguing the issue on
    which it received leave to appeal. An order of this court consolidating appeals
    and transferring a Divisional Court appeal does not have the effect of
    expanding the issues on the appeal.

[31]

Before leaving this part of the analysis, I note
    that the merits of the issue were argued before us. HannStar raised concerns
    about the correctness of the trial judge's analysis. Those concerns will have
    to be addressed at trial.

(ii)
    Discoverability and s. 36(4)(a)(i) of the Competition Act

[32]

The discoverability principle is a common law
    rule providing that a cause of action arises for purposes of a limitation
    period when the material facts on which it is based have been discovered or
    ought to have been discovered by the plaintiff by the exercise of reasonable
    diligence:
Central Trust Co. v. Rafuse
, [1986] 2 S.C.R. 147, at p. 224;
see also Graeme Mew, Debra Rolph & Daniel Zacks,
The Law of
    Limitations
, 3rd ed. (Toronto: LexisNexis Canada Inc., 2016), at p. 75.

[33]

Discoverability is also an interpretive rule
    relevant to the construction of limitation statutes:
Ryan v. Moore,
2005 SCC 38, [2005] 2 S.C.R. 53, at para. 23. As explained below, it provides
    certain presumptions for courts interpreting statutory limitation periods.

[34]

The approach for determining whether a
    particular statutory limitation period is subject to the discoverability
    principle was discussed by Twaddle J.A. in
Fehr v. Jacob
(1993), 14
    C.C.L.T. (2d) 200 (Man. C.A.), at p. 206:

[T]he judge-made discoverability rule is nothing more than a
    rule of construction. Whenever a statute requires an action to be commenced
    within a specified time from the happening of a specific event, the statutory
    language must be construed. When time runs from "the accrual of the cause
    of action" or from some other event which can be construed as occurring
    only when the injured party has knowledge of the injury sustained, the
    judge-made discoverability rule applies. But, when time runs from an event
    which clearly occurs without regard to the injured party's knowledge, the
    judge-made discoverability rule may not extend the period the legislature has
    prescribed.

The Supreme Court of Canada has
    endorsed this passage in
Peixeiro v. Haberman
, [1997] 3 S.C.R. 549, at
    para. 37, and in
Ryan
,

at para. 23.

[35]

Ryan
is the
    latest statement from the Supreme Court of Canada on this issue. In that
    decision, at para. 24, Bastarache J. concluded as follows:

Thus, the Court of Appeal of Newfoundland and Labrador is
    correct in stating that the rule is generally applicable where the
    commencement of the limitation period is related by the legislation to the
    arising or accrual of the cause of action. The law does not permit resort to
    the judge-made discoverability rule when the limitation period is explicitly
    linked by the governing legislation to a fixed event unrelated to the injured
    partys knowledge or the basis of the cause of action.

[36]

The applicability of discoverability is a matter
    of statutory construction. The jurisprudence noted above only provides
    presumptions and, in
Ryan
, at para. 23, Bastarache J. cautioned
    against applying the principle automatically or systematically without a
    thorough balancing of competing interests.

[37]

With these general principles in mind, I turn to
    a consideration of the limitation period in s. 36(4)(a)(i), which provides the
    following:

(4) 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

(i) a day on which the conduct was
    engaged in, or

(ii) the day on which any criminal
    proceedings relating thereto were finally disposed of,

whichever is the later

[38]

I begin by discussing
Ryan
and
Waschkowski
    v. Hopkinson Estate
(2000), 47 O.R. (3d) 370 (C.A.), both relied upon by
    HannStar, where courts found that the limitation period in issue was not
    subject to discoverability.

[39]

Ryan
considered
    the limitation period in s. 5 of the
Survival of Actions Act
, R.S.N.L.
    1990, c. S-32, which linked the limitation period to the granting of letters of
    probate or the death of a defendant. In
Waschkowski
, this court
    considered s. 38(3) of the
Trustee Act
, R.S.O. 1990, c. T.23,
    which linked the limitation period to the death of a deceased.

[40]

In both cases, the courts noted that the event
    that triggered the running of the limitation period at issue  the issuing of
    letters probate or the death of the defendant  did not affect the plaintiffs
    cause of action and the plaintiffs knowledge of the event at issue was
    irrelevant to their cause of action:
Ryan
, at para. 32;
Waschkowski
,
    at para. 8. In contrast, the conduct mentioned in s. 36(4)(a)(i) is not
    unrelated to the claimants cause of action; rather, it is the basis for the
    plaintiffs claim.

[41]

I turn now to a consideration of
Peixeiro
and of
Grenier v. Canadian General Insurance Company
(1999), 43 O.R.
    (3d) 715 (C.A.), two cases where courts found that the limitation period in
    issue was subject to discoverability.

[42]

In
Peixeiro
,

t
he
    limitation period is similar to the one at issue in the present case. There,
    the Supreme Court considered what was s. 206(1) of the
Highway Traffic Act
,
    R.S.O. 1990, c. H.8, which provided that any action for damages caused by a
    motor vehicle accident had to be brought within two years from the time when
    the damages were sustained. The court concluded that the discoverability
    principle applied. Major J.s comments, at para. 38, are instructive:

The appellant submitted here that the general rule of
    discoverability was ousted because the legislature used the words damages were
    sustained, rather than the date when the cause of action arose. It is unlikely
    that by using the words damages were sustained, the legislature intended that
    the determination of the starting point of the limitation period should take
    place without regard to the injured partys knowledge. It would require clearer
    language to displace the general rule of discoverability.  The use of the
    phrase damages were sustained rather than cause of action arose, in the
    context of the
HTA
, is a distinction without a difference. The
    discoverability rule has been applied by this Court even to statutes of
    limitation in which plain construction of the language used would appear to
    exclude the operation of the rule.
Kamloops, supra
, dealt in part with
    s. 739 of the
Municipal Act
, R.S.B.C. 1960, c. 255, which required
    that notice should be given within two months from and after the date on which
    [the] damage was sustained. However, this Court applied the discoverability
    rule even with respect to this section. [Citation omitted.]

[43]

Subsection 36(4)(a)(i) links the limitation
    period to conduct that gives rise to any damage or loss. In that way, it is
    similar to the former s. 206 of the
Highway Traffic Act
, which linked
    the limitation period to damages caused by a motor vehicle accident.

[44]

Also instructive is this courts decision in
Grenier
in which
the issue was
    whether the discoverability principle applied to the old s. 258(2) of the
Insurance
    Act
, R.S.O. 1990, c. I.8, which provided as follows: No action shall be
    brought against an insurer under subsection (1) after the expiration of one
    year from the final determination of the action against the insured, including
    appeals if any. At p. 722, Morden A.C.J.O. concluded that the discoverability
    principle applied:

With respect, I do not think that the triggering event in s. 258(2)
    of the
Insurance Act
 the final determination of the action against
    the insured  is the same as that in
Fehr
. It is a constituent element
    of the cause of action which is created by s. 258(1)  a judgment against a
    person insured by a motor vehicle liability policy. Under the discoverability
    rule this triggering event does not come into existence until the plaintiff
    has, or reasonably should have, knowledge not only that he or she has
a
judgment but, also, that it is a judgment against an insured person. [Emphasis
    in original.]

[45]

Similarly, in this case, the term conduct in
    s. 36(4)(a)(i) of the
Competition Act
refers to the conduct giving
    rise to damages mentioned in s. 36(1) and is, therefore, also a
    constituent element of the cause of action subject to the limitation period. To
    use Bastarache J.s language from
Ryan
,

quoted above, the
    triggering event is related to the accrual of the cause of action. Applying the
    rationale from
Grenier
, s. 36(4)(a)(i) too is subject to the
    discoverability principle.

[46]

Also, in
Peixeiro
, at para. 39, Major
    J. stated the following:

In balancing the defendants legitimate interest in respecting
    limitations periods and the interest of the plaintiffs, the fundamental
    unfairness of requiring a plaintiff to bring a cause of action before he could reasonably
    have discovered that he had a cause of action is a compelling consideration.

In my view, that applies in the
    present case as well, particularly given that secrecy and deception are invariably
    elements of anti-competition agreements.

[47]

I note that s. 36(4)(a)(ii) provides an
    alternative date for the limitation period (i.e. the day on which any criminal
    proceedings relating to the conduct at issue were disposed of). That alternate
    event is arguably not connected to a plaintiffs cause of action or knowledge 
    at the very least it is clearly not a constituent element of the cause of
    action provided in s. 36 of the
Competition Act
. As such, it imposes a
    limitation period that is probably not subject to discoverability. One could
    argue that this produces an anomalous result in that the discoverability
    principle would apply to s. 36(4)(a)(i) but not to s. 36(4)(a)(ii). However, I
    do not think such an outcome would be anomalous. There is no rule that suggests
    that both limitation periods in s. 36(4)(a) must operate in the same way.

[48]

I agree with the statements of Sharpe J. in
Chadha
    v. Bayer Inc.
(1998), 82 C.P.R. (3d)
    202 (Ont. Gen. Div.)

about s. 36(4)(a)(i) and (ii). In concluding
    that it was not beyond doubt that the discoverability principle did not apply
    to s. 36(4)(a)(i), he noted, at p. 206, that Parliament has hardly
    provided potential defendants with an iron-clad assurance that they may not be
    sued more [than] two years after the cessation of their conduct as the
    limitation period could start to run again in the event of criminal
    proceedings.

[49]

I also agree with the submission of Fanshawe
    that any other interpretation has the potential to render the remedy nugatory
    by depriving victims of the chance to make a claim when the conspirators concealment
    has been particularly effective.

(iii) Leave to Amend the
    Statement of Claim

[50]

Fanshawes lawyers brought a motion for leave to
    amend the statement of claim. Their impetus for the motion was twofold.

[51]

First, there was concern that the Supreme Court
    of Canada in a series of unrelated cases would rule that only direct
    purchasers, as opposed to indirect purchasers, could assert price-fixing
    claims. Fanshawe is an indirect purchaser, so there was the potential that
    there would be no representative plaintiff in the case. Accordingly, in the
    proposed amendments, they sought to add Mass, which was a direct purchaser.

[52]

Second, Fanshawes lawyers wanted to eventually
    move to consolidate this action with the First Ontario Action. So they proposed
    a series of amendments to ensure that the terminology in the statement of claim
    in this action would match the terminology in the statement of claim in the
    First Ontario Action.

[53]

The motion judge declined to grant the motion.
    He observed, at para. 8, that a party
should not be
    added as a plaintiff if the limitation period applicable to their claim has
    clearly expired.
In his view, it was clear that the
Limitations
    Act
barred the conspiracy claim and that the
Competition Act
claim was time-barred by s. 36(4)(1)(a) of the Act. By the
    time Fanshawe filed this motion to add Mass as a representative plaintiff, more
    than two years had passed since Mass retained Siskinds to pursue claims related
    to the price-fixing of LCD products.

[54]

The motion judge reasoned that the only way
    the claim would not be statute-barred was if the applicable limitation periods were
    tolled with respect to Mass, as an existing class member, when Fanshawe
    commenced this action, pursuant to s. 28(1) of the
Class Proceedings
    Act, 1992
, S.O. 1992, c. 6
.
He
    correctly identified the issue, at para. 16 of his reasons, as 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.

[55]

To determine this issue, the motion judge first
    analyzed the relief sought in paragraph 1(a) of the existing statement of
    claim, which provided as follows:

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);

[56]

He then compared that paragraph to the same
    paragraph in the proposed statement of claim, underlining the amendments:

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);

[57]

The motion judge also referenced paragraph 4 of
    the proposed statement of claim, which provided the following underlined
    amendments:

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.

[58]

The motion judge found that, had the amendments
    stopped there, he would have granted leave to amend because they were cosmetic
    in nature and did not change the substance of the relief sought in the action.
    However, he found that the other proposed amendments went beyond mere cosmetic
    refinements of the existing language and expanded the scope of the action. In
    particular, he pointed to proposed paragraph 8, which stated [d]uring the
    Conspiracy Period, Mass Multiples purchased LCD Panels for use in the design
    and manufacturing of multiple-display products.

[59]

According to the motion judge, that amendment
    expanded the scope of the action. His reasoning was as follows:

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

[30]    That 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. [Italics added]

[31]    It 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.  [Italics added]

[32]    When 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.

[33]    In 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 [
Class Proceedings Act
]
.
The commencement of this action
    had no effect on the limitation periods relating to Mass claims.  Those
    periods have expired.

[34]    In 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. [Footnotes omitted.]

[60]

In my view, the motion judge erred in concluding
    that Mass was not a member of the class described in the existing statement of
    claim. That claim contained language in paragraph 1(a) that made clear that the
    action sought relief for direct and indirect purchasers: 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).  Mass
    was a direct purchaser (i.e. it purchased panels, not finished products
    containing panels).

[61]

The effect of the amendments was not to expand
    the scope of the action to include a new category of class members. Mass was
    part of the class from the outset as an indirect purchaser. Accordingly, it had
    the benefit of s. 28(1) of the
Class Proceedings Act
. The limitation
    period for its claim was tolled and there was no basis for the motion judge to
    deny the motion for leave to amend the statement of claim.

(iv) Civil Conspiracy

[62]

Fanshawe asserts a claim in civil conspiracy,
    alleging that the defendants breach of s. 45 of the
Competition Act

    the provision that establishes the offence of price-fixing  constituted an
    unlawful act directed at Fanshawe and other purchasers knowing that this
    conduct would likely cause them injury. On the Fanshawe Appeal, HannStar argued
    that, as an additional issue raised before the motion judge but not addressed
    in his reasons, the amendment should not be granted because such a breach could
    not serve as the unlawful means in a civil conspiracy claim.

[63]

While the general rule is that amendments are
    presumptively approved, there is no absolute right to amend pleadings. An
    amendment will not be permitted where prejudice would result that could not be
    compensated for by costs or an adjournment: r. 26.01 R.R.O. 1990, Reg. 194.

[64]

HannStar opposes the amendment because it
    asserts that the unlawful means conspiracy claim, as pleaded, is not tenable in
    law, suggesting the claim would have been struck if it had been originally
    pleaded. The test to strike a claim at the pleadings stage is well established:
    a claim must be permitted to proceed unless it is plain and obvious that it cannot
    succeed. Therefore, only claims with no reasonable prospect of success should
    be struck, whereas claims that have some chance of success should proceed to
    trial:
R. v. Imperial Tobacco Canada Ltd.
, 2011 SCC 42, [2011] 3
    S.C.R. 45, at paras. 17-19.

[65]

The issue for determination is whether it is
    plain and obvious that Fanshawes civil conspiracy cannot succeed because a
    breach of s. 45 of the
Competition Act
cannot serve as the unlawful
    means. Below, I review the submission made by HannStar and the case law on the
    interaction between the
Competition Act
and unlawful means conspiracy.
    I then apply the legal principles to this case to determine whether HannStar
    has met the plain and obvious test.

(a)
    HannStars Submission

[66]

The crux of HannStars submission is that s. 36
    of the
Competition Act
provides the only available civil remedy for a
    breach of Part VI of the Act.  That section provides in part:

36 (1) Any person who has suffered loss or damage as
    a result of

(a) conduct that is contrary to any provision of Part
    VI, or

(b) the failure of any person to comply with an order
    of the Tribunal or another court under this Act,

may, in any court of competent jurisdiction, sue for and
    recover from the person who engaged in the conduct or failed to comply with the
    order an amount equal to the loss or damage proved to have been suffered by
    him, together with any additional amount that the court may allow not exceeding
    the full cost to him of any investigation in connection with the matter and of
    proceedings under this section.

[67]

Thus, s. 36 creates a statutory cause of action for
    any person who has suffered loss or damage arising from the breach of any of
    the criminal provisions in Part VI of the Act.  These provisions include
    conspiracy (s. 45), bid-rigging (s. 47), misleading advertising (s. 52) and
    deceptive telemarketing (s. 52.1). Available damages are restricted to
    recovering an amount equal to the loss or damage proved to have been
    suffered. So, for example, punitive damages are not available:
Wong v.
    Sony of Canada Ltd
. (2001), 9 C.P.C. (5th) 122 (Ont. S.C.), at paras.
    17-18.

[68]

HannStars position is that s. 36 operates as a
    complete code for the assertion of claims for damages resulting from conduct
    that breaches Part VI of the Act. It submits that Parliament intended to limit
    the available remedy to the statutory cause of action provided for in s. 36. 
    It would, therefore, be contrary to the
Competition Act
and Parliaments
    intentions to permit a s. 45 breach to serve as the unlawful means in a civil
    conspiracy claim because it would impermissibly expand the scope of available
    remedies.

[69]

In support of this submission, HannStar relies
    on a line of authority beginning with
Orpen v. Roberts
, [1925] S.C.R.
    364, which stands for the proposition that, in determining whether an
    individual can sue in respect of a statutory duty, the court must look to
    whether the action is brought in respect of the kind of harm which the statute
    is designed to prevent, whether the person bringing the claim is part of the
    class that the statute is designed to protect, and whether the remedy provided
    by the statute is adequate protection for the person injured: see also
Stewart
    v. Park Manor Motors Ltd.
, [1968] 1 O.R. 234 (C.A.), at p. 238.

[70]

HannStar submits that the remedy in s. 36
    adequately protects injured parties and that it was not Parliaments intent to
    augment the statutory cause of action by enacting a general right for consumers
    to sue in tort for a breach of Part VI of the Act.

(b)
    Competition Act and Unlawful Means Conspiracy Case Law

[71]

The analysis of the relevant case law begins with
    the seminal case
Canada

Cement LaFarge Ltd. v. B.C. Lightweight
    Aggregate,
[1983] 1 S.C.R. 452. There the Supreme Court of Canada provided
    much needed guidance regarding the constituent elements of the tort of civil
    conspiracy. At pp. 471-72, the court ruled that the tort of conspiracy exists
    in the following circumstances: (1) the predominant purpose of the defendants
    conduct is to cause plaintiff injury, whether or not the defendants' means were
    lawful; or (2) the defendants conduct is unlawful and directed towards the
    plaintiff (alone or with others) and, in the circumstances, the defendants
    should know that injury to the plaintiff is likely to, and does,
result,
notwithstanding that the
    predominant purpose of the defendants conduct was not to cause injury to the
    plaintiff.

[72]

For present purposes, it is important to note
    that the unlawful means alleged by the plaintiff in
Cement LaFarge

was
    based upon the guilty pleas of the defendants to charges of conspiracy to
    prevent or unduly lessen competition in the production of cement contrary to s.
    32(1)(c) of the
Combines Investigation Act
, R.S.C. 1970, c. C-23
.
That section was the predecessor of
    the current  s. 45 of the
Competition Act
. The Supreme Court

ruled
    that, in the circumstances of that case, the plaintiff had not made out a civil
    conspiracy claim. However, the court appeared to accept that a breach of s.
    32(1)(c) of the
Combines Investigation Act
could, in appropriate
    circumstances, serve as the unlawful means in a civil conspiracy claim.

[73]

The Supreme Court of Canada in
A.I.
    Enterprises Ltd. v. Bram Enterprises Ltd
., 2014 SCC 12, [2014] 1 S.C.R.
    177, clarified any doubt about the courts meaning in
Cement LaFarge
.
    There, Cromwell J., writing for the court, referred to
Cement LaFarge
as standing for the proposition that a breach of a statute could satisfy the
    unlawful means component.

[74]

I pause in my review of the case law to note
    that HannStar takes the position that
Cement LaFarge
is not controlling
    on the issue because at the time of the commencement of the claim in that case
    the predecessor to s. 36 had not yet been enacted. Things changed, it argues,
    when Parliament added a statutory cause of action.  At that point, there was no
    need for resort to a common law claim because Parliament had enacted a complete
    code for civil claims.

[75]

In
Westfair Foods Ltd v. Lippens Inc.
(1989),
64 D.L.R. (4th) 335 (Man. C.A.), at pp. 337-39, leave
    to appeal refd (1990), 106 N.R. 16 (note), the Manitoba Court of Appeal
    rejected the argument that the statutory remedy provided for in the Act
    overtook or foreclosed existing common law remedies.  The courts view was that
    Parliament could have stated in clear language in the Act that existing tort
    claims were restricted or eliminated, but it chose not to do so.  In addition,
    the court held that s. 62 of the Act rebuts any argument that the statutory
    cause of action precludes any civil remedies. Section 62 provides that nothing
    in Part VI shall be construed as depriving any person of any civil right of
    action.

[76]

In
Apotex Inc. v. Hoffman La-Roche Limited
(2000),
195
    D.L.R. (4th) 244 (Ont. C.A.), this court relied on
Westfair
in rejecting
    an argument that the unlawful conduct allegations in a civil conspiracy claim
    had not been properly pleaded. Rosenberg J.A.s analysis of the issue is found at
    para. 21:

The motions judge held that while allegations of unlawful
    conduct are made in the amended statement of claim no factual underpinning is
    pleaded to sustain the tort of unlawful interference with economic
    relations.  Similarly, with respect to conspiracy, he held that the
    pleading is devoid of facts supporting an allegation of unlawful
    purpose.  With respect, I do not agree.  It is open to the appellant
    to rely upon breach of s. 52 of the
Competition Act
as supplying the
    element of unlawful means for both unlawful interference with economic
    interests and conspiracy. See
Westfair Foods Ltd. v. Lippens Inc.
(1989), 64 D.L.R. (4th) 335 at 338, 30 C.P.R. (3d) 209 (Man. C.A.).

[77]

HannStar relies upon the Court of Appeal for British
    Columbias decision in
Wakelam v. Johnson & Johnson
, 2014 BCCA 36,
54 B.C.L.R. (5th) 7,
    leave to appeal refd [2014] 2 S.C.R. x (note), in support of its position.
    That was a class action where the plaintiff alleged that the defendants had
    engaged in deceptive acts or practices under the British Columbia
Business
    Practices and Consumer Protection Act
,
    S.B.C. 2004, c. 2,
and had made false or misleading representations
    to the public contrary to s. 52 of the
Competition Act
. The
    provincial statute also provided a private right of action for persons who
    suffer loss or damage due to breach of the statute.

[78]

In finding that the plaintiff could not sue in
    tort on the basis of a breach of Part VI, the court relied on
General
    Motors of Canada Ltd. v. City National Leasing
,
[1989] 1 S.C.R. 641, in which the Supreme Court of Canada
    considered the constitutionality of the statutory cause of action in the
Competition
    Act
.  Newbury J.A, writing for the court in
Wakelam
, observed the
    following, at para. 89:

The Court in
General Motors
was careful to emphasize
    that this right of action was part of the well-integrated scheme of the whole
    Act, and that it did not create a right of action at large. Had it done so,
    it appears the constitutional verdict in
General Motors
might have
    been different.

[79]

The Court of Appeal for British Columbias analysis
    in
Wakelam
was considered a short time later by that same court in
Watson
    v. Bank of America Corp.
, 2015 BCCA 362, 79 B.C.L.R. (5th) 1, which was an
    appeal on a pleadings motion. In that case, Saunders J.A., writing for the
    court, noted that, in
Wakelam,
the court never adverted to the issue of
    whether the enactment of the statutory cause of action was meant to eliminate
    an existing cause of action at common law.  Saunders J.A. restricted the
    application of
Wakelam
to the proposition that a breach of the
Competition
    Act
alone could not ground claims for restitutionary remedies. She
    distinguished the cases applicability for claims based on the tort of unlawful
    means conspiracy.


[80]

In answering the question of whether
    Parliament intended to eliminate the existing common law right, the court
    framed the issue, at para. 55, as whether the
Competition Act
provides a new and superior method of remedying a breach of the statute. The
    Supreme Court of Canadas decision in
Gendron v. Supply and Services Union
    of the Public Service Alliance of Canada, Local 50057
, [1990] 1 S.C.R.
    1298, was relied upon, at para. 54, for the proposition that if Parliament
    desires to replace an existing common law right it must express its intention
    with irresistible clearness.

[81]

The court in
Watson
found that s. 36
    was not intended to replace the common law action in unlawful means conspiracy.
    It relied on the fact that the statutory and common law causes of action had
    different constituent elements, available remedies, and limitation periods in
    support of its conclusion. The court concluded that it was not plain and
    obvious that a claim in unlawful means conspiracy based on ss. 45 and 61 of the
Competition Act
could not succeed.

[82]

The final case for consideration on this point
    is
Shah v. LG Chem, Ltd.
, 2015 ONSC 6148, 390 D.L.R. (4th) 87,
[1]
which is
    also relied upon by HannStar. In that case, the motion judge conducted an
    exhaustive review of the case law on this issue in the context of determining
    whether an unlawful means conspiracy should be certified in a class action.
At paras. 226-27, he expressed his reasons for declining
    to follow
Watson
:

In my opinion, the error in this analysis of the statutory
    interpretation issue of whether Parliament intended to preclude an unlawful
    means conspiracy based on a breach of Part VI of the
Competition Act

appears
    at para. 55 of the Courts judgment in

Watson
, where
    Justice Saunders reframes the question to be asked as whether the
Competition Act

p
rovides "a new and superior"
    method of remedying a breach of the statute. With respect, the superiority of
    the new statute in providing a remedy for a breach of the statute is not the
    right interpretative question. The proper question is: Based on a reading of
    the whole statute what was Parliaments intent in introducing the statutory
    cause of action? I repeat what Justice Duff stated in
Orpen v. Roberts
,
supra
at pp. 369-370

For the reasons expressed above, Parliaments intent was not
    constrained to replacing the existing common law means of enforcing competition
    law with a new and superior method. Parliament does not have to justify making
    its statutory cause of action the exclusive cause of action by making it
    broader and more generous or superior in some way to the common law cause of
    action. Given the policy pulls of competition law, Parliament was not
    constrained to only introduce pro-plaintiff amendments to the
Competition
    Act,

and, in my opinion, Parliament intended to
    introduce a statutory cause of action that had a briefer limitation period and
    that did not admit of punitive damages but did offer plaintiffs a more
    efficient claim against price-fixers. As Justice Howland, noted in

Stephens
    v. Gulf Oil Canada Ltd.,

supra
, the
    scope of the common law may be changed to the extent that Parliament determines
    that regulation is desirable in the public interest.

(c) Application of the Legal
    Principles

[83]

In my view, the weight of appellate authority in
    this country is contrary to the position asserted by HannStar and its position
    is wrong in law.

[84]

The appellate authorities cited by the parties
    are, with the exception of
Wakelam
, entirely consistent with
    Fanshawes position. In
Apotex
,
the issue was squarely before this court and the position urged upon us by
    HannStar was rejected.

[85]

Further, in my view, there is no reason to
    depart from the reasoning of this court in
Apotex
, of the Manitoba
    Court of Appeal in
Westfair,
and of

the Court of Appeal for
    British Columbia in
Watson.
There is nothing in the language of s. 36 or
    in the debates surrounding its enactment that suggests it was Parliaments
    intention to eliminate the use of a breach of Part VI of the Act as the
    unlawful means in a civil conspiracy claim. To the contrary, it would appear to
    be incongruous with the purpose of the Act, being the elimination of
    anti-competitive behaviour, that Parliament would eliminate a common law cause
    of action that serves to punish such behaviour.

[86]

The cases relied upon by HannStar that consider
    the
Competition Act
are outliers. They are not binding on this court
    and should not be followed.

[87]

Barely eighteen months after it was issued, the
    application of
Wakelam
was severely restricted by the same courts
    subsequent decision in
Watson
. There is good reason for this. In
Wakelam
,
    the court took the wrong analytical approach. It relied on
General Motors
,
    which was concerned with whether the enactment of the predecessor to s. 36 was
    constitutionally valid. That was not the issue before the court in
Wakelam
and it is not the issue before this court. The issue here is whether the
    enactment eliminated an existing cause of action, i.e. civil conspiracy with a
    Part VI breach serving as the unlawful means. The court in
Wakelam
never
    considered that issue and
Westfair
and
Apotex
were not
    referenced.

[88]

In
Shah
, the motion judge determined,
    at para. 193, that his preferred analytical approach was to begin by considering
    the issue as a matter of first principles and then analyze what the case law
    says. That approach, while unusual, is certainly acceptable. He acknowledged,
    at para. 191, that there was existing case law recognizing that a breach of
    the
Competition Act
was an unlawful act for the purposes of satisfying
    this constituent element of the tort of conspiracy. He then cites
Apotex
.
    However, in his extensive legal analysis, there is no further reference to the
    case.

[89]

While it was open to the motion judge in that
    case to distinguish
Apotex
, what he could not do was ignore the dicta
    from this court. The selective nature of the analysis taints his conclusions
    and leads me to conclude that the case should not be followed.

[90]

I am also of the view that the motion judge in
Shah
erred in relying upon the
Orpen
line of case law. It is not applicable
    to the present case because, in those cases, the courts were considering
    statues where the legislature identified the proscribed behaviour and provided
    for a remedy at the same time. Thus, the analysis focused on whether it was the
    intention of the legislature to provide a complete code of redress.

[91]

This contrasts with the legislative history of
    the predecessor to the
Competition Act
, in which Parliament first prohibited
    certain conduct without providing a corresponding civil remedy. As discussed
    above, the common law filled the void by allowing a Part VI violation to serve
    as the unlawful means in a civil conspiracy. It was only after that remedy was
    established that the Act was amended to provide a statutory remedy. In these
    circumstances, the correct analysis is whether Parliament intended to take away
    this established remedy with the enactment of the statutory cause of action.

[92]

In summary, I am of the view that the weight of appellate
    authority is contrary to the position espoused by HannStar and that the cases
    relied upon by HannStar are not persuasive. In these circumstances, it can
    hardly be said that the unlawful means conspiracy claim asserted in the present
    case has no chance of success.

Disposition

[93]

I would dismiss the HannStar Appeal. I would
    allow the Fanshawe Appeal and grant Fanshawe leave to amend its statement of
    claim in the manner proposed in its motion for leave to amend.

[94]

If the parties are unable to agree on the issue
    of costs, they may make brief submissions in writing within two weeks of the
    release of these reasons.

C.W.
    Hourigan J.A.

I
    agree Alexandra Hoy A.C.J.O.

I
    agree John Laskin J.A.

Released: August 11, 2016 AH





[1]
Leave to appeal to the Divisional Court was granted on August 8, 2016: 2016
    ONSC 4670 (DIv. Ct.).


