[1] This is an appeal from a decision of McGillis J. of the Trial Division (as it then was) which dismissed an appeal from a decision of Prothonotary Lafrenière which had ordered the plaintiff's Statement of Claim struck out. The Statement of Claim was brought under the provisions of section 36 of the Competition Act, R.S.C. 1985, c. C-34. Subsection 36(1) provides:

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.

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.

[2] The Statement of Claim is, in large measure, an attack against the Commissioner of Competition, lawyers, and employees of the Office of the Commissioner and a restatement of some aspects of a separate appeal the plaintiff is taking from a decision of Tremblay-Lamer J. of the Trial Division. Her decision dismissed a judicial review of the Commissioner's decision not to conduct an inquiry under section 10 of the Competition Act.

[3] The large portion of the Statement of Claim dealing with these matters, specifically paragraphs 8 to 30 and 35 to 37, has nothing to do with any of the grounds referred to in section 36 of the Act for commencing an action. McGillis J. was correct to confirm the Prothonotary's decision in respect of that portion of the Statement of Claim. As that portion of the Statement of Claim does not disclose "a scintilla of a cause of action," it should be struck without leave to amend (see Larden v. Canada (1998), 145 F.T.R. 140 at para. 26 (Proth.)).

[4] At the hearing of this appeal, the plaintiff was asked to succinctly state the nature of his cause of action against Delta Controls. He referred to paragraph 5 of the Statement of Claim which provides:

Delta provides the local contractor(Delta Partner), operating in the guise of an exclusive product distributor for Southwestern Ontario, significant discounts which are not made available to the competitors of the Delta Partner, in order to allow the Delta Partner to unfairly compete for service tenders. The Partner(local contractor) receives distributor pricing while other contractors/bidders receive retail.

[5] Paragraph 50(1)(a), which is a provision found in Part VI of the Competition Act, provides that everyone engaged in a business who is a party to any sale that discriminates against the purchaser's competitors commits an offence. Paragraph 50(1)(a) provides:

50. (1) Every one engaged in a business who

(a) is a party or privy to, or assists in, any sale that discriminates to his knowledge, directly or indirectly, against competitors of a purchaser of articles from him in that any discount, rebate, allowance, price concession or other advantage is granted to the purchaser over and above any discount, rebate, allowance, price concession or other advantage that, at the time the articles are sold to the purchaser, is available to the competitors in respect of a sale of articles of like quality and quantity,

...

is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years.

50. (1) Commet un acte criminel et encourt un emprisonnement maximal de deux ans toute personne qui, exploitant une entreprise, selon le cas_:

a) est partie intéressée ou contribue, ou aide, à une vente qui est, à sa connaissance, directement ou indirectement, discriminatoire à l'endroit de concurrents d'un acheteur d'articles de cette personne en ce qu'un escompte, un rabais, une remise, une concession de prix ou un autre avantage est accordé à l'acheteur au-delà et en sus de tout escompte, rabais, remise, concession de prix ou autre avantage accessible à ces concurrents au moment où les articles sont vendus à cet acheteur, à l'égard d'une vente d'articles de qualité et de quantité similaires;

[6] On a motion to strike, the allegations in the Statement of Claim must be taken as being proven to be true (Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 at paras. 30-33). The allegations in paragraph 5 do set out a claim cognizable under paragraph 50(1)(a) of the Competition Act and, on their own, might well justify maintaining at least that paragraph. Although paragraph 5 does not name the purchaser with whom the plaintiff competes, the name of the purchaser does appear in paragraph 7 and, in any event, such a deficiency could be cured by an amendment or perhaps by the defendant seeking particulars.

[7] However, paragraph 2 of the Statement of Claim, which also must be presumed to be true, provides:

Delta has an agreement with a London service contractor, who operates in the guise of an exclusive product distributor for Delta. The agreement lessens competition in the relevant market to the benefit of the contractor, who must purchase a minimum quota of product from Delta, in return for the exclusive territory granted by Delta, under Delta's Partnership program. The local contractor/exclusive distributer is a 'Delta Partner'. [Emphasis added]

[8] A constituent element of discrimination under paragraph 50(1)(a) is that a discount, rebate, etc. has been granted to a purchaser but not made available to the purchaser's competitors in respect of sales of "like quantities." Yet the plaintiff pleads that the purchaser (his competitor) must purchase a minimum quota of product. Thus, the plaintiff's claim is that he should be able to purchase product at the same price as his competitor, notwithstanding that the competitor must purchase a minimum quantity of product.

[9] Paragraph 3 of the Statement of Claim argues that all competing purchasers should be on an "equal cost footing," thereby ignoring the requirement in paragraph 50(1)(a) of the Act that a cause of action based on discrimination must involve like quantities being sold to the purchaser and made available to the purchaser's competitors. Paragraph 3 states:

By enacting the section 50(1)(a) provision of the Act, Parliament has assured that, in terms of the prices which competing businesses pay for their goods, all businesses have an opportunity to be on an equal cost footing with their competitors, with the market outcome determined by their own entrepreneurship and abilities, and not by the actions of third parties (i.e. Delta) operating elsewhere in the distribution system. [Emphasis added]

[10] There is no cause of action for discrimination under paragraph 50(1)(a) unless like quantities are involved. Because the plaintiff's Statement of Claim rejects that requirement, paragraphs 1 to 7 and 31 to 34 also disclose no reasonable cause of action.

[11] Before McGillis J. and this Court, the plaintiff asks for "leave to amend the Statement of Claim, as appropriate, in relation to any paragraph which is deemed to be deficient" by the Court. The only possible amendment would be the withdrawal of paragraphs 2 and 3, which paragraphs negate an essential element of the cause of action. These paragraphs are tantamount to admissions that the plaintiff has no cause of action.

[12] The approach of this Court, as to when admissions in a pleading may be withdrawn, was set out in Andersen Consulting v. Canada (C.A.), [1998] 1 F.C. 605 at paras. 13 and 14:

[13] Rather, they [the British Columbia Courts] have adopted as a test that, in all the circumstances of the case, there will be a triable issue which ought to be tried in the interests of justice and not be left to an admission of fact. Under such a test, inadvertence, error, hastiness, lack of knowledge of the facts, discovery of new facts, and timeliness of the motion to amend become factors to be taken into consideration in deciding whether or not the circumstances show that there is a triable issue which ought to be tried in the interests of justice.

[14] We prefer the approach taken by the Courts in British Columbia which gives the Court seized with a motion to amend pleadings, including an amendment withdrawing or purporting to withdraw an admission, the needed flexibility to ensure that triable issues are tried in the interests of justice without injustice to the litigants.

[13] There is no suggestion that paragraphs 2 and 3 of the Statement of Claim were included due to inadvertence, error, hastiness, or lack of knowledge of the facts by the plaintiff. Nor has the plaintiff raised any relevant new fact. As to timeliness, the plaintiff refused the Prothonotary's invitation to clarify his allegations and insisted that nothing more was required. The first time he raised the subject of an amendment was on appeal before McGillis J. Before McGillis J. and this Court, the plaintiff proposed no specific amendments and, in particular, did not propose withdrawal of paragraphs 2 and 3. Finally, the vast majority of the Statement of Claim constituted a legally unfounded attack on the Commissioner and others. In all these circumstances, I conclude that this is not a case in which the plaintiff should be permitted to amend his Statement of Claim to withdraw the admissions in paragraphs 2 and 3.

[14] For these reasons, the plaintiff's entire Statement of Claim discloses no reasonable cause of action and was properly struck out by Prothonotary Lafrenière. McGillis J. was correct to

dismiss the appeal from the decision of Prothonotary Lafrenière. This appeal should also be dismissed with costs. The plaintiff's Statement of Claim should be struck out without leave to amend.

"Marshall Rothstein"

J.A.

"I agree

J. Edgar Sexton J.A."

"I agree

B. Malone J.A."

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-727-02

STYLE OF CAUSE: KIRK CHARETTE

Appellant

and

DELTA CONTROLS, THE COMMISSIONER OF COMPETITION

Respondent

PLACE OF HEARING: TORONTO, ONTARIO

DATE OF HEARING: OCTOBER 21, 2003

REASONS FOR JUDGMENT: ROTHSTEIN J.A.

CONCURRED IN BY: SEXTON J.A.

MALONE J.A.

DATED: NOVEMBER 14, 2003

APPEARANCES:

Mr. Kirk Charette FOR THE APPELLANT,

ON HIS OWN BEHALF

Ms. Melanie Aitken

Mr. Steve Mason FOR THE RESPONDENT

SOLICITORS OF RECORD:

Kirk Charette

London, Ontario FOR THE APPELLANT, ON HIS OWN BEHALF

Mr. Steve Mason

Ms. Melanie Aitken

Toronto, Ontario

Morris Rosenberg

Deputy Attorney General of Canada FOR THE RESPONDENTS

You are here

Charette v. Delta Controls, 2003 FCA 425

Citations2003 FCA 425

Case tabs

Citations
2003 FCA 425