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Competition - General. Dye & Durham Limited v. Ingarra
In Dye & Durham Limited v. Ingarra (Fed CA, 2024) the Federal Court of Appeal dismissed an appeal from a ruling that found no conflict of interest in counsel for class action plaintiffs, here in a motion "removing plaintiffs’ counsel as counsel of record".
Here the court contrasts s.45 ['Conspiracies, agreements or arrangements between competitors'] with s.79 ['Prohibition if abuse of dominant position'] of the Competition Act:Whether sections 45 and 79 of the Act are sufficiently related
[28] The Federal Court judge conducted a thorough and thoughtful analysis of sections 45 and 79 of the Act. From a competition law perspective, the analysis is unimpeachable. The appellants’ argument, however, and with which I agree, is that the Federal Court did not consider whether or not the two proceedings were, from a conflicts perspective, sufficiently related.
[29] The question of whether the retainers are sufficiently related is answered from an objective standpoint, taking into account the perspective of the reasonably informed client who may be troubled by their former lawyer now acting against them. The answer to the question of sufficient relationship also takes into account the primary purpose of the rule, which is to preserve public confidence in the integrity of the bar.
[30] An offence is committed under section 45 when a person conspires, agrees or arranges with a competitor to fix prices, allocate sales, territories, customers or markets or restrict output in respect of a product or service. Section 79, in contrast, prohibits businesses from abusing their dominant position. It requires proof that a business with substantial control of a class or segment of a business has engaged in an anti-competitive act or practice that has substantially lessened or prevented competition.
[31] Notwithstanding the key differences, rightly noted by the judge, there is a limited, but certain, underlying commonality to the provisions. Retainers under sections 45 and 79 may share many of the same facts which frame the legal advice offered. Each requires an understanding of a relevant market and of a relevant product. Each requires an understanding of existing business practices. In the case of abuse proceedings, these elements are central to the inquiry; in the section 45 inquiry, they are contextual. The close factual overlap between the provisions is recognized in the Act itself: section 45.1 provides that where an order has been sought against a person under section 79, no proceedings can be commenced under subsection 45(1) against that person "“on the basis of facts that are the same or substantially the same”".
[32] The mens rea for an offence under section 45 also illustrates the factual overlap between actions under sections 45 and 79. The Federal Court noted that the mens rea for section 45 offences "“is met when it is demonstrated that the competitors intentionally entered into the agreement”" (Federal Court decision at para. 84). While this is correct, the mens rea for a section 45 offence also includes an objective assessment of the conduct of the parties in relation to an intent to achieve one of the prohibited ends found in paragraphs 45(1)(a), (b), or (c) (Shah at para. 50). This portion of the inquiry focuses on contextual intention and market and business factors beyond the agreement itself.
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