Date: 20090827
Docket: T-382-09
Citation: 2009 FC 852
[ENGLISH
TRANSLATION]
Montréal, Quebec, August 27, 2009
PRESENT: Richard Morneau, Esq., Prothonotary
BETWEEN:
NANCY BOUCHARD
Plaintiff
and
MITSUBISHI
MOTOR SALES
OF CANADA INC.
and
MITSUBISHI
MOTORS NORTH AMERICA INC.
and
MITSUBISHI MOTORS CORPORATION
Defendants
REASONS FOR ORDER AND ORDER
[1]
This case involves ruling on two motions filed by two of
the three defendants, respectively, against an action brought by the plaintiff
in March 2009 under the terms of Part 5.1 of the Federal Courts Rules (the
Rules) as a “Proposed Class Proceeding”.
[2]
The focus of the motion by the defendant Mitsubishi Motor
Sales of Canada Inc. (hereinafter Mitsubishi Canada) seeks to have the
plaintiff’s statement of claim struck and her action dismissed under Rule
221(1)(a) due to the fact that this Court allegedly does not have jurisdiction
to hear the plaintiff’s action against it.
[3]
The motion and main remedy sought by defendant Mitsubishi
Motors North America Inc. (hereinafter Mitsubishi America) are to the same
effect. With respect to Mitsubishi America, on August 12, 2009, the plaintiff
filed a motion for extension of time to serve the statement of claim that can
be found at subsection 203(1) of the Rules because Mitsubishi America raises in
its motion the fact that it was not served within the time set out in the
Rules. We will address this motion by the plaintiff when dealing with
Mitsubishi America’s motion to strike.
[4]
Defendant Mitsubishi Motors Corporation (hereinafter
Mitsubishi Japan) is not involved in this debate at this time since the
statement of claim still has not been legitimately served on it. The order
accompanying these reasons will extend the plaintiff’s time to do so until
December 3, 2009.
Essential background
[5]
In her statement of claim, the plaintiff sets out, inter
alia, the following:
[translation]
The plaintiff’s cause of action is as follows:
1. The
plaintiff wishes to bring a class action on behalf of the persons who are part
of the group hereinafter, of which she is a member, namely:
“Any natural person, body corporate, corporation, company
or association that purchased or leased from a dealership in Canada, since June
1, 2006, a new vehicle manufactured, imported or distributed by the respondents
(sic).”
(Hereinafter designated as “the group”)
2. The
plaintiff is a lawyer who lives in the greater metropolitan Montréal area and
who needs a vehicle to get around;
3. For
this purpose, the plaintiff signed a purchase offer and agreement to acquire a
new Mitsubishi brand car, as it appears in said purchase offer and agreement,
filed jointly in support hereto (...);
DEFENDANTS
4. Defendants
Mitsubishi Motor Sales of Canada Inc. (hereinafter “Mitsubishi Canada”),
imports, distributes, sells and leases Mitsubishi brand vehicles, parts and
accessories in Canada (...);
5. Defendant
Mitsubishi Motors North America, Inc. (hereinafter “Mitsubishi America”)
imports, distributes, sells and leases Mitsubishi brand vehicle, parts and
accessories in the United States (...);
6. Defendant
Mitsubishi Motors Corporation (hereinafter “Mitsubishi Japan”) manufactures and
coordinates the worldwide distribution, sale, and leasing of Mitsubishi brand
vehicles, parts and accessories (...);
7. Moreover,
the defendants are related companies, work together to import and sell all
Mitsubishi brand vehicles, parts and accessories in Canada and the United
States. However, the retail sale of vehicles is done through dealerships that
are not affiliated with the respondents (sic);
(…)
16. Faced
with a loss in profit, the respondents (sic) therefore conspired among
themselves and with their American and Canadian dealers to restrict the free
movement of their products by the Canadian-American border;
17. In
fact, in order to prevent the free movement of products from Canada to American
consumers, the respondents (sic) implemented various measures to isolate
both markets from each other;
(…)
CONSPIRACY BY
THE RESPONDENTS (sic)
20. As a
result of competition in Canada, it would be normal for the prices of
Mitsubishi products to drop to gradually reach the prices of American
Mitsubishi products. However, the defendants, through their conspiracies,
behaviours and instructions with their dealers, have artificially kept the
prices of cars in Canada approximately 25% higher by preventing the importation
of new vehicles from the United States to Canada;
21. To
prevent Canadian consumers from taking advantage of the buying opportunities in
the United States, and to increase their prices at the expense of those
consumers, the defendants conspired together with their affiliated agents and
dealers to maintain and charge consumers artificially higher prices that they
could have asked for in a true free market for Mitsubishi vehicles;
22. The
main goal of this conspiracy was to increase their profits in Canada and to
prevent the natural erosion of Canadian prices by competition;
[6]
It appears that this statement of claim by the plaintiff is
similar to, if not substantially the same as, an equivalent proceeding filed in
May 2008 by the plaintiff with the Superior Court of Québec, with that
proceeding being struck the Court in December 2008 due to the lack of ratione
loci jurisdiction under article 3148 of the Civil Code of Quebec
(C.C.Q.).
Analysis
[7]
As for Mitsubishi Canada’s motion, it essentially raises
that this Court, by proceeding with the same analysis and application of
article 3148 of the C.C.Q. as that done by the Superior Court of Québec in
December 2008, must arrive at the same conclusion of a lack of jurisdiction.
[8]
Article 3148 of the C.C.Q. reads:
|
Art. 3148. In
personal actions of a patrimonial nature, a Québec authority has jurisdiction
where
(1) the
defendant has his domicile or his residence in Québec;
(2) the
defendant is a legal person, is not domiciled in Québec but has an
establishment in Québec, and the dispute relates to its activities in Québec;
(3) a
fault was committed in Québec, damage was suffered in Québec, an injurious
act occurred in Québec or one of the obligations arising from a contract was
to be performed in Québec;
(4) the
parties have by agreement submitted to it all existing or future disputes
between themselves arising out of a specified legal relationship;
(5) the
defendant submits to its jurisdiction.
However,
a Québec authority has no jurisdiction where the parties, by agreement, have
chosen to submit all existing or future disputes between themselves relating
to a specified legal relationship to a foreign authority or to an arbitrator,
unless the defendant submits to the jurisdiction of the Québec authority.
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Art. 3148. Dans les actions personnelles à
caractère patrimonial, les autorités québécoises sont compétentes dans les
cas suivants :
1o Le
défendeur a son domicile ou sa résidence au Québec;
2o Le
défendeur est une personne morale qui n’est pas domiciliée au Québec mais y a
un établissement et la contestation est relative à son activité au Québec;
3o Une
faute a été commise au Québec, un préjudice y a été subi, un fait dommageable
s’y est produit ou l’une des obligations découlant d’un contrat devait y être
exécutée;
4o Les parties, par convention, leur ont
soumis les litiges nés ou à naître entre elles à l’occasion d’un rapport de
droit déterminé;
5o Le
défendeur a reconnu leur compétence.
Cependant,
les autorités québécoises ne sont pas compétentes lorsque les parties ont
choisi, par convention, de soumettre les litiges nés ou à naître entre elles,
à propos d’un rapport juridique déterminé, à une autorité étrangère ou à un
arbitre, à moins que le défendeur n’ait reconnu la compétence des autorités
québécoises.
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[9]
I believe that Mitsubishi Canada, which is a Canadian
corporation, is wrong to bring up the matter of this Court’s jurisdiction based
on the applicability of article 3148 of the C.C.Q.
[10]
In her statement of claim, the plaintiff clearly appeals to
the Competition Act, R.S.C., 1985, c. C-34, as amended (the Act).
In fact, at paragraph 34 of the statement, the plaintiff argues that the
defendants acted in violation of the provisions of subsection 45(1) of the Act
and that consequently (paragraph 35), all members of the group are entitled to
claim damages from the defendants under subsection 36(1) of the Act.
[11]
These two sections of the Act read as follows:
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Recovery
of damages
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.
Evidence
of prior proceedings
(2) In any
action under subsection (1) against a person, the record of proceedings in
any court in which that person was convicted of an offence under Part VI or
convicted of or punished for failure to comply with an order of the Tribunal
or another court under this Act is, in the absence of any evidence to the
contrary, proof that the person against whom the action is brought engaged in
conduct that was contrary to a provision of Part VI or failed to comply with
an order of the Tribunal or another court under this Act, as the case may be,
and any evidence given in those proceedings as to the effect of those acts or
omissions on the person bringing the action is evidence thereof in the
action.
Jurisdiction of Federal Court
(3) For the purposes of any action under subsection (1), the Federal
Court is a court of competent jurisdiction.
Limitation
(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; and
(b) in the case of an action based on the failure of any
person to comply with an order of the Tribunal or another court, after two
years from
(i) a day on
which the order of the Tribunal or court was contravened, or
(ii) the day on which any criminal
proceedings relating thereto were finally disposed of,
whichever is the later.
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Recouvrement
de dommages-intérêts
36. (1)
Toute personne qui a subi une perte ou des dommages par suite :
a) soit d’un comportement allant à
l’encontre d’une disposition de la partie VI;
b) soit du défaut d’une personne
d’obtempérer à une ordonnance rendue par le Tribunal ou un autre tribunal en
vertu de la présente loi,
peut, devant tout tribunal compétent, réclamer et recouvrer de la personne
qui a eu un tel comportement ou n’a pas obtempéré à l’ordonnance une somme
égale au montant de la perte ou des dommages qu’elle est reconnue avoir
subis, ainsi que toute somme supplémentaire que le tribunal peut fixer et qui
n’excède pas le coût total, pour elle, de toute enquête relativement à
l’affaire et des procédures engagées en vertu du présent article.
Preuves de procédures antérieures
(2) Dans
toute action intentée contre une personne en vertu du paragraphe (1), les
procès-verbaux relatifs aux procédures engagées devant tout tribunal qui a
déclaré cette personne coupable d’une infraction visée à la partie VI ou l’a
déclarée coupable du défaut d’obtempérer à une ordonnance rendue en vertu de
la présente loi par le Tribunal ou par un autre tribunal, ou qui l’a punie
pour ce défaut, constituent, sauf preuve contraire, la preuve que la personne
contre laquelle l’action est intentée a eu un comportement allant à
l’encontre d’une disposition de la partie VI ou n’a pas obtempéré à une
ordonnance rendue en vertu de la présente loi par le Tribunal ou par un autre
tribunal, selon le cas, et toute preuve fournie lors de ces procédures quant
à l’effet de ces actes ou omissions sur la personne qui intente l’action
constitue une preuve de cet effet dans l’action.
Compétence de la Cour fédérale
(3) La
Cour fédérale a compétence sur les actions prévues au paragraphe (1).
Restriction
(4) Les
actions visées au paragraphe (1) se prescrivent :
a) dans le cas de celles qui sont fondées sur un comportement qui
va à l’encontre d’une disposition de la partie VI, dans les deux ans qui
suivent la dernière des dates suivantes :
(i) soit la date du comportement en
question,
(ii) soit la date où il est statué de
façon définitive sur la poursuite;
b) dans le cas de celles qui sont
fondées sur le défaut d’une personne d’obtempérer à une ordonnance du
Tribunal ou d’un autre tribunal, dans les deux ans qui suivent la dernière
des dates suivantes:
(i) soit la date où a eu lieu la
contravention à l’ordonnance du Tribunal ou de l’autre tribunal,
(ii) soit la date où il est statué de
façon définitive sur la poursuite.
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PART VI
OFFENCES IN RELATION TO COMPETITION
Conspiracy
45. (1)
Every one who conspires, combines, agrees or arranges with another person
(a)
to limit unduly the facilities for transporting, producing, manufacturing,
supplying, storing or dealing in any product,
(b)
to prevent, limit or lessen, unduly, the manufacture or production of a
product or to enhance unreasonably the price thereof,
(c) to prevent or lessen,
unduly, competition in the production, manufacture, purchase, barter, sale,
storage, rental, transportation or supply of a product, or in the price of
insurance on persons or property, or
(d) to otherwise restrain or
injure competition unduly,
is guilty of an
indictable offence and liable to imprisonment for a term not exceeding five
years or to a fine not exceeding ten million dollars or to both.
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PARTIE VI
INFRACTIONS RELATIVES À LA CONCURRENCE
Complot
45. (1) Commet un acte criminel et
encourt un emprisonnement maximal de cinq ans et une amende maximale de dix
millions de dollars, ou l’une de ces peines, quiconque complote, se coalise
ou conclut un accord ou arrangement avec une autre personne :
a) soit pour limiter, indûment, les
facilités de transport, de production, de fabrication, de fourniture,
d’emmagasinage ou de négoce d’un produit quelconque;
b) soit pour empêcher, limiter ou réduire, indûment, la fabrication
ou production d’un produit ou pour en élever déraisonnablement le prix;
c) soit pour empêcher ou réduire, indûment, la concurrence dans la
production, la fabrication, l’achat, le troc, la vente, l’entreposage, la
location, le transport ou la fourniture d’un produit, ou dans le prix
d’assurances sur les personnes ou les biens;
d) soit, de
toute autre façon, pour restreindre, indûment, la concurrence ou lui causer
un préjudice indu.
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[12]
However, as it appears in subsection 36(3) of the Act, this
Court has jurisdiction over actions set out in subsection 36(1) of the Act.
[13]
Consequently, with respect to Mitsubishi Canada, the
jurisdiction of this Court over the plaintiff’s action is therefore clearly
established through subsection 36(3), and this finding means that the main
remedy of Mitsubishi Canada’s motion for lack of jurisdiction is without merit.
[14]
As for Mitsubishi America’s motion, since it is an American
corporation, it follows that the analysis cannot end with the observation of
the presence of subsection 36(3) of the Act.
[15]
In Desjean v. Intermix Media, Inc. [2006] F.C.J. No.
1754, affirmed in appeal by the Federal Court of Appeal in [2007] F.C.J. No.
1523 (Desjean), the Court had to assess whether it had jurisdiction over
an American defendant, i.e. Intermix Media, Inc. (hereinafter Intermix),
against the plaintiff’s allegations that through its activities, Intermix was
guilty of deceptive, fraudulent and illegal practices, thereby violating
subsections 52(1), 52(1.1) and paragraph 52(2)(e) of the Act.
[16]
At paragraph 6 of his decision, De Montigny J. describes
these activities as follows:
[6] In his
statement of claim for a proposed class action, Mr. Desjean alleges that
Intermix offers ostensibly free software programs, such as screensavers and
games, that anyone can download. Without disclosure to consumers, however,
Intermix surreptitiously tacks onto these programs one or more additional
programs that deliver ads and other invasive content. Thus, when Mr. Desjean
installed a “free” Intermix screensaver or game on his computer, he also
unwittingly installed one or more spyware programs. In this manner, known as
“bundling”, Intermix has spread its advertising programs onto Mr. Desjean’s
hard drive.
[17]
Of course, the plaintiff had brought her action to this
Court in accordance with the provisions of section 36 of the Act.
[18]
According to De Montigny J. in Desjean, there are
three ways in which a court may assert jurisdiction over foreign defendants. The
Court stated as follows at paragraph 23 of its decision:
[23] There
are three ways in which a court may assert jurisdiction over an out-of-country
defendant. It may assume jurisdiction if the defendant is physically
present within the territory of the court. Second, the foreign resident may
consent to submit the dispute to the Canadian court’s jurisdiction. Third,
the court may declare itself competent to hear the case, in appropriate
circumstances. This case raises the third possibility.
[Emphasis added.]
[19]
I believe that here too, in the case of Mitsubishi America,
we must assess whether the circumstances justify it.
[20]
In Desjean, in appeal, Pelletier J.A. summarizes the
approach taken by De Montigny J. of the Federal Court as follows; application
that allowed de Montigny J. to maintain that the Federal Court did not have
jurisdiction over Intermix:
[4] (...) After
summarizing the facts and the parties’ arguments, he briefly reviewed the case
law on the jurisdiction of Canadian courts pertaining to foreign defendants Relying
on Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 (Morguard),
Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon,
[1994] 3 S.C.R. 1022 (Tolofson) and Hunt v. T&N plc, [1993] 4
S.C.R. 289 (Hunt), he concluded that, before exercising their
jurisdiction over a foreign defendant who has no presence in Canada and who has
not submitted to their jurisdiction, Canadian courts require a real and
substantial connection between the defendant, the cause of action and Canada.
The judge then turned to an analysis of the circumstances giving rise to the
dispute, in light of the factors delineated in Muscutt v. Courcelles
(2002), 213 D.L.R. (4th) 577 (Court of Appeal for Ontario) (Muscutt), to
determine whether there was in fact a real and substantial connection between
the respondent, the cause of action as set out in Mr. Desjean’s statement of
claim and Canada.
[Emphasis added.]
[21]
In its written representations at paragraphs (5) to (13), Mitsubishi
America, referring to a man named John P. McElroy, ‘General Counsel’ at
Mitsubishi America, highlights as follows a wide range of factors that compare
closely with the factors retained by De Montigny J. in Desjean:
5) MMNA
is a corporation having its domicile in the State of California, more
specifically in the city of Cypress.
➢ Tab B,
Paragraph 9 of the Affidavit, DMR page 8
➢ Tab B,
Exhibit 4 of the Affidavit, DMR page 80
6) MMNA
does not currently have, nor did it have, at anytime during the Class Period a
place of business in the Province of Quebec or in Canada, nor did it have any
employees in either Quebec or Canada during the relevant times.
➢ Tab B,
Paragraphs 10 and 12 of the Affidavit, DMR page 9
7) MMNA
does not hold or possess any assets in the Province of Quebec or in Canada, nor
did it hold or possess any during the Class Period.
➢ Tab B,
Paragraph 11 of the Affidavit, DMR page 9
8) MMNA
is not involved in the retailing of vehicles or car parts in any Canadian
market.
➢ Tab B,
Paragraph 13 of the Affidavit, DMR page 9
9) MMNA
does not sell or distribute motor vehicles or any other product at the retail
level in Canada nor in Quebec.
➢ Tab B,
Paragraph 14 of the Affidavit, DMR page 9
10) Furthermore,
MMNA holds no bank accounts anywhere in Canada nor does it pay any provincial
or federal taxes in the Canada.
➢ Tab B,
Paragraph 15 of the Affidavit, DMR page 9
11) MMNA
is not registered with any federal authority as exercising commercial
activities anywhere in Canada and is not registered in any provincial
jurisdiction in Canada as a corporate entity doing business in said
jurisdictions.
➢ Tab B,
Paragraph 16 of the Affidavit, DMR page 9
12) All
of MMNA’s management, pricing, merchandising, and operational decisions are
conducted outside of Canada and in no way involve any Canadian retail market.
➢ Tab B,
Paragraph 17 of the Affidavit, DMR page 9
13) During
the Class Period MMNA did not advertise its products in Canada or Quebec, or
have any marketing strategy for the Canadian Market. Any advertising or
marketing strategy in effect would have been exclusive to the US automobile
retail market.
➢ Tab B,
Paragraph 18 of the Affidavit, DMR page 9
[22]
I therefore consider that, faced with the factors above and
the Federal Court’s decision, as affirmed in appeal, in Desjean, here
must find that none of these factors, taken in isolation or as a whole, as well
as vague allegations from the plaintiff’s statement of claim, do not allow us
to find that there is a real and substantial link between Mitsubishi America,
the cause of action as set out in the plaintiff’s statement of claim and
Canada.
[23]
Thus, the Court must allow with costs Mitsubishi America’s
motion and proceed in that respect to strike the plaintiff’s statement of claim
and dismiss her action on the grounds of lack of jurisdiction in respect of
this defendant. The costs here are allowed in favour of Mitsubishi America
because at this stage, the Court considers that this case has not reached the
circumstances or stages of subsection 334.39(1) in limine of the Rules
and that therefore, Rule 339 cannot come into play to prevent the principles
and rules that moreover apply to an individual action in terms of costs.
[24]
Given this finding, the Court, as part of Mitsubishi
America’s motion, does not have to rule on the other remedies sought by it. Likewise,
and even if it had been led to allow it otherwise, this Court does not have to
rule on the plaintiff’s motion for extension of time to serve the statement of
claim that can be found at subsection 203(1) of the Rules and that concerned
Mitsubishi America.
[25]
Moreover, if we come back to Mitsubishi Canada’s motion and
the other remedies it is seeking, namely the special management of the
plaintiff’s action and the stay of its defence for the time being, there are
grounds to decide on this as follows.
[26]
As for special management, the plaintiff is right to point
out that an order for that end is pointless, since Rule 384.1 already provides
that an action brought by a member of group of persons on behalf of the group
is automatically a specially managed action.
[27]
As for whether the Court should allow Mitsubishi Canada to
simply file its defence after the Court has rule on the motion for leave of the
action as a class action, or alternatively, following what the judge or
prothonotary might decide to be designated as case manager, it is my view that
there are grounds to immediately rule as follows.
[28]
After reading the plaintiff’s statement of action and the
parties written representations on this remedy, and after listening to their
counsel on the same matter, I find that the filing of Mitsubishi Canada’s
defence at this stage will not help the Court in its adjudication of the motion
for leave, and that filing at that stage would only result in additional costs.
Consequently, Mitsubishi Canada’s defence only needs to be served and filed
thirty (30) days after this Court has rule on the plaintiff’s motion for leave.
ORDER
1.
The motion by Mitsubishi Motor Sales of Canada Inc. is only
allowed in part so that this party’s defence only has to be served and filed
thirty (30) days after this Court has ruled on the plaintiff’s motion for
leave. Nevertheless, costs for this motion are awarded to the plaintiff.
2.
The motion by Mitsubishi Motors North America Inc. is
allowed with costs, and the Court orders, in respect of this party, the
striking of the plaintiff’s statement of claim and the dismissal of her action
on the grounds of this Court’s lack of jurisdiction over this defendant.
3.
The plaintiff has until December 3, 2009, to complete the
service of her statement of claim on defendant Mitsubishi Motors Corporation.
“Richard Morneau”
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