Date: 20110318
Docket: A-70-10
A-133-10
Citation: 2011 FCA
106
CORAM: BLAIS C.J.
NOËL J.A.
TRUDEL J.A.
BETWEEN:
GROUPE
WESTCO INC.
Appellant
and
NADEAU FERME AVICOLE LIMITÉE/
NADEAU POULTRY FARM LIMITED
Respondent
Heard at Ottawa, Ontario, on March 15, 2011.
Judgment delivered at Ottawa,
Ontario, on March 18, 2011.
REASONS FOR JUDGMENT BY: TRUDEL
J.A.
CONCURRED
IN BY: BLAIS
C.J.
NOËL
J.A.
Date:
20110318
Docket: A-70-10
A-133-10
Citation: 2011 FCA 106
CORAM: BLAIS
C.J.
NOËL
J.A.
TRUDEL
J.A.
BETWEEN:
GROUPE WESTCO INC.
Appellant
and
NADEAU FERME AVICOLE LIMITÉE/
NADEAU POULTRY FARM LIMITED
Respondent
REASONS FOR JUDGMENT
TRUDEL J.A.
[1]
This
is a consolidated appeal from two decisions of the Competition Tribunal (the
Tribunal or the Judge). Under File A-70-10, Groupe Westco Inc. (the appellant
or Westco) appeals from a decision dated January 22, 2010 (2010 Comp. Trib. 2,
Blanchard J.) finding it in contempt of a previous order of June 26, 2008 (the
Interim Supply Order or ISO). File A-133-10 concerns a decision dated March 18,
2010 (2010 Comp. Trib. 5, Blanchard J.) dismissing Westco’s motion for
directions regarding the interpretation of the ISO.
[2]
Nadeau
Ferme Avicole Limitée/Nadeau Poultry Farm Limited (the respondent or Nadeau) is
a primary chicken processor whose chicken supplies come from different chicken
producers (together the producers), Westco being Nadeau’s main supplier.
[3]
In
early 2008, the producers advised Nadeau that they would cease supplying it
with live chickens in order to favour a new business partner (Olymel). Ensued
Nadeau’s application under section 75 of the Competition Act, R.S.C.
1985, c. C-34 (the Act) for an order requiring the producers to continue to
supply Nadeau with live chickens (the application was eventually dismissed by
the Tribunal, 2009 Comp. Trib. 6 (app’d: matter under reserve)). Pending the
Tribunal’s decision on the section 75 application, Nadeau sought an order
pursuant to section 104 of the Act requiring the producers “to supply it with
live chickens on the usual trade terms, in the volumes previously supplied”. On
June 26, 2008, the Tribunal granted the interim relief sought in order to
maintain the status quo between the parties and protect Nadeau’s business
pending the hearing on the merits.
[4]
The
ISO’s key passages are found at paragraphs 57 and 58. In their relevant parts,
they read:
57. The Respondents are to
continue to supply the Applicant with live chickens on the usual trade terms at
the current level of weekly supply, namely 271,350 live chickens.
58. … This volume of supply is
to be reduced by 25,000 live chickens per week upon the first delivery
of the live chickens to [Nadeau] expected ... in September, 2008, and further
reduced by any other supply of live chickens [Nadeau] may secure during this
interim period [from other sources]. [I underline.]
[5]
Following
the issuance of the ISO, a dispute arose between the parties as to its
interpretation and implementation. Briefly stated, Westco took the position
that its obligation under the ISO was defined by reference to the total weight
of the chickens delivered rather than by the number of heads. Adopting this
view, Westco, without prior authorization by the Tribunal, took it upon itself
to change the pattern of supply by supplying Nadeau with fewer chickens having a
greater weight. Faced with this change, and after requesting without success
that Westco continue to supply it as it had in the past, Nadeau initiated the
contempt proceeding. In response, Westco filed a motion alleging that the ISO was
ambiguous and had to be clarified.
[6]
At
the contempt hearing, there was no dispute as to the existence of the ISO and
knowledge of that order by Westco, two of the constitutive elements of contempt
that Nadeau needed to establish beyond a reasonable doubt. The evidence
surrounding the third and final element of contempt, Westco’s knowing
disobedience of the ISO, was the focus of that hearing.
[7]
Westco
argued that the ISO was ambiguous and open to multiple interpretations. It
submitted that it had complied with the ISO by offering to supply Nadeau with
all of its production of heavier chickens, as permitted under its production
quota, except for the reduction contemplated by paragraph 58 of the ISO for
supplies secured by Nadeau from other sources. In the extreme, the position of
Westco is illustrated by one of its witnesses who testified that Westco’s
requirement would be met if Westco could produce and deliver to Nadeau one
chicken weighing 2,730,000 kgs.
[8]
In
my view, Westco’s contention that the ISO was ambiguous only holds if one
forgets that the purpose of the ISO was to maintain the status quo between the
parties. Westco was well aware of the supply pattern at the time of the ISO and
the importance to Nadeau of maintaining this pattern in terms of size of the chickens
supplied and the total weight delivered to it. Instead, Westco took it upon
itself to unilaterally change the pattern of supply because, as the Judge
found, it wanted to pursue its plan to produce larger chickens in the context
of a more lucrative venture with Olymel. In so doing it ceased to comply with
the ISO in so far as it relates to the size of the chickens.
[9]
I
can detect no error in the judge’s conclusion that the ISO was clear and that Westco
deliberately breached its terms. Therefore, there is no need to address the
other issues raised by Westco, as they would not change the final outcome.
[10]
These
reasons dispose of both appeals which I propose to dismiss with one set of
costs assessed on a solicitor and client basis in relation to Appeal A-70-10. A
copy of these reasons will be filed in appeal A-133-10 as reasons therein.
“Johanne
Trudel”
“I
agree
Pierre
Blais C.J.”
“I agree
Marc Noël J.A .”
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