Date: 20110309
Docket: T-279-11
Citation: 2011 FC 281
Toronto, Ontario, March 9, 2011
PRESENT: The Honourable Mr. Justice Scott
BETWEEN:
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HER MAJESTY THE QUEEN
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and
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KASON
INDUSTRIES INC.
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Accused.
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REASONS
FOR SENTENCE AND SENTENCE
[1]
The
Accused has pleaded guilty to one count of an indictable offence of breaching
paragraph 45(1)(c) of the Competition Act, RSC 1985 c. C-34, as amended
(the Act).
[2]
The
Accused stands charged that between January 2005 and December 31, 2008, at the
city or near the environs of Newnan, in the state of Georgia, United States and
elsewhere in the United States did unlawfully conspire, combine, agree or
arrange with Component Hardware Incorporated to prevent or lessen, unduly,
competition in Toronto, Ontario and elsewhere in Canada in the sale and supply
of commercial and institutional refrigeration and food service equipment
components. By agreeing to allocate customers contrary to paragraph 45(1)(c) of
the Competition Act, Chapter 34, and which agreement had the effect of
lessening competition in Canada and did thereby commit an indictable offence
contrary to paragraph 45(1)(c) of the Competition Act.
[3]
Pursuant
to a plea of guilty and the agreed statement of facts, there will be a
conviction registered. It is necessary to sentence the Accused. The substance
of the charge is that the Accused’s company did unlawfully conspire with an
unrelated company, with lessening or preventing competition unduly in the
supply of refrigeration equipment and parts.
[4]
Counsel
for the parties presented an agreed statement of facts which was supplemented
by oral submissions. They have suggested a fine of $250,000.00.
[5]
On
a conviction under section 45, the only penalty provided for a corporation is a
fine not exceeding $10 million. The sentence under the Act should protect the
public interest in free competition and should serve as a general and specific
deterrent.
[6]
The Court
relies on the following factors in deciding upon the sentence in this matter:
a.
In this
case, the relevant section is section 45 of the “Conspiracy” section, and is
the core of the criminal portion of the Act.
b.
The role
of the Accused and its officers is a factor. In this case, the Accused’s
president was the party who entered into the agreement on behalf of the Accused
and, therefore, one of the highest directing minds of the corporation was
involved.
c.
The fine
suggested here is in line in view of the representations I have heard this
morning.
d.
The fine
should also reflect the normal cost of investigations by the Crown. It is
accepted by both the Crown and the Accused that in this case, there is a
certain recovery of costs.
e.
The
international context of this conspiracy cannot be overlooked. The fine should
be sufficient to deter persons outside the country from engaging in actions
which violate Canadian competition laws.
[7]
The
mitigating factors are:
1.
A guilty
plea is always a significant factor.
2.
The
accused has co-operated with the Crown.
[8]
Relying
on these principles and factors and, in particular, the need for general and
specific deterrents, and considering all of the evidence, the Act and the
submissions of counsel, in the Court’s view, the amount of the fine suggested
by counsel is reasonable under these specific circumstances that were
presented.
SENTENCE
THIS COURT,
THEREFORE,
on a plea of guilty and on a review of the agreed statement of facts and oral
submissions, I convict the Accused, Kason Industries Inc. and fine it $250,000.00
to be payable over the next five years, with a minimum payment of $50,000.00
payable within the next 30 days and the balance of $200,000.00 payable into
yearly instalments of $50,000.00 over the next four years.
"André F.J. Scott"
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