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Federal Court - Discovery. Atkinson v. Commissioner of Competition
In Atkinson v. Commissioner of Competition (Fed CA, 2026) the Federal Court of Appeal dismissed an appeal, this brought against the Federal Court's decision that "the Commissioner’s right to seek a section 11 [SS: 'Order for oral examination, production or written return'] order did not end with an application before the Competition Tribunal".
Here the court contrasts the Competition Act s.11 provisions with the third party discovery provisions of FCR s.240:[55] The purpose of section 11 is distinct from the purpose of the Federal Court’s third-party discovery rules. The former is investigative; the latter is in support of an adjudicative proceeding. Section 11 enables the Commissioner to investigate and collect facts "“on any matter that is relevant to the inquiry”". In contrast, the Competition Tribunal Rules and third-party discovery are confined to matters relevant to or raised in the pleadings (Federal Courts Rules, r. 240(a)). Discovery is designed to allow a party to know the case they may have to meet at trial and to gain admissions; section 11 is designed to assist the Commissioner to determine if there is a case to bring forward, and if so, scope out its contours.
[56] The appellant’s argument reflects, again, a linear understanding of the relationship between the investigative powers in the Commissioner and the adjudicative powers of the Tribunal. Sections 10 and 11 are continuing investigative powers, not limited by the existence of an adjudicative proceeding. There is nothing in the Act that states or implies that right to discovery precludes resort to an order under section 11. To the contrary, the Tribunal Rules themselves contemplate the integration of section 11 evidence into the adjudicative process. As noted, rule 73 of the Competition Tribunal Rules requires leave of the Tribunal before section 11 evidence is admitted, which serves as a safeguard against the potential misuse of section 11 evidence (Commissioner of Competition v. Canada Pipe, 2003 CanLII 90068 (C.T.)).
[57] The argument that recourse to section 11 is constrained by the existence of the right to discovery has been considered, and rejected (see, e.g., Canada (Commissioner of Competition) v. Indigo Books & Music Inc., 2015 FC 256 at para. 40 [Indigo Books & Music]; Director of Investigation and Research v. Canadian Pacific Ltd., 74 C.P.R. (3d) 55, 1997 CanLII 2729 (C.T.) [Canadian Pacific 2]). Previous cases have concluded that section 11 is an available tool for the Commissioner to use to gather information parallel to an application and "“[a]ny advantage which the [Commissioner] obtains through use of section 11 examinations is an advantage accorded to him under the Act”" (Indigo Books & Music at para. 42, citing Canadian Pacific 2).
[58] It is not inappropriate for the Commissioner to rely on its section 11 investigative power to obtain information, even when the Commissioner may have other means of obtaining that information. Rather, the presumption is that the Commissioner’s actions are bona fide and in the public interest: Canada (Commissioner of Competition) v. Pearson Canada Inc., 2014 FC 376 at para. 43 [Pearson]. The appellants have the onus of displacing that presumption, and they have failed to do so.
[59] But there is a third, and in my view, more compelling reason why I would reject this argument.
[60] Section 11 proceedings are ex parte for a reason. Section 11 orders are not only used against the target of the inquiry. Orders are sought against customers, suppliers, distributors and competitors of the target, many of which may be in a commercially sensitive or vulnerable relationship with the target. Commercially sensitive information lies at the core of any section 11 examination, canvassing, for example, the existence of preferred supplier arrangements or discounts, pricing, operating margins, geographic and product marketing information and the downstream price effects of a restricted practice or merger, to name but a few.
[61] Requiring the Commissioner to gather this evidence in a discovery would bring those parties, and their evidence, into direct contact with the respondent to the application. This would defeat one important purpose of section 11, which is to bolster the Commissioner’s ability to investigate and enforce competition law by incentivizing third parties who, for commercial reasons, might be otherwise reluctant to testify. Under the compulsion of a court order, they can do so without risk of compromising their business relationships or competitive position. Neither the target nor the third party has any right to participate in the application for a section 11 order, file evidence or cross-examine on the Commissioner’s affidavit; rather, their concerns are brought forward to the Court through the Commissioners duty of full disclosure. Importantly, the target is not entitled to attend the examination if it is prejudicial to the effective conduct of the examination, or if it would result in the disclosure of confidential commercial information relating to the business of the person being examined or its employer (Act, s. 12(4)). Considering the purpose of section 11 and the express statutory recognition of the sensitivities involved, attendance by the target should not be expected and requests to attend should not be routinely granted (Pearson at para. 92).
[62] To conclude, the distinctions in purpose and procedure between a section 11 examination and discovery are many and stark; discovery is not a surrogate for an investigatory power, a point made clear by the fact that failure to comply with a section 11 order can result in imprisonment up to two years or significant fines in the discretion of the court.
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