Maritime Travel Inc. v. Go Travel Direct.Com Inc., 2009 NSCA 42

• Judge: Saunders, Hamilton and Fichaud, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: April 22, 2009
• Jurisdiction: Nova Scotia
• Citations: 2009 NSCA 42;(2009), 276 N.S.R.(2d) 327 (CA)

Maritime Travel v. Go Travel Direct.Com (2009), 276 N.S.R.(2d) 327 (CA);

    880 A.P.R. 327

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Temp. Cite: [2009] N.S.R.(2d) TBEd. AP.030

Go Travel Direct.Com Inc., a body corporate (appellant) v. Maritime Travel Inc., a body corporate (respondent)

(CA 297729; 2009 NSCA 42)

Indexed As: Maritime Travel Inc. v. Go Travel Direct.Com Inc.

Nova Scotia Court of Appeal

Saunders, Hamilton and Fichaud, JJ.A.

April 22, 2009.

Summary:

The plaintiff travel agency claimed damages under s. 36(1) of the federal Competition Act from the defendant online competitor, claiming that the defendant's comparative price ads were false and misleading in a material respect.

The Nova Scotia Supreme Court, in a judgment reported (2008), 265 N.S.R.(2d) 369; 848 A.P.R. 369, allowed the action in part. The court found several of the ads to be false or misleading, resulting in direct losses for lost commissions due to reduced market share. The court assessed $216,842 damages for losses directly resulting from the misleading ads, excluding losses that would have resulted in any event from increased competition, legitimate ads, etc. The only costs issue left to be determined was whether the defendant should pay all or part of the disbursement relating to the expert retained by the plaintiff to quantify its loss.

The Nova Scotia Supreme Court, in a judgment reported (2008), 269 N.S.R.(2d) 396; 860 A.P.R. 396, ordered that the defendant partially compensate the plaintiff for the cost of retaining the expert. The court fixed $50,000 as a just and reasonable amount. The defendant appealed the liability and costs decision. The plaintiff cross-appealed the trial judge's failure to find all of the ads to be false or misleading.

The Nova Scotia Court of Appeal dismissed the appeal and the cross-appeal. The trial judge did not err in any respect.

Evidence - Topic 7075

Opinion evidence - Reports by experts - Admission of (incl. objection to) - [See Practice - Topic 7141 ].

Practice - Topic 7141

Costs - Party and party costs - Disbursements - Cost of expert advice - The plaintiff was partially successful in its action for damages against the defendant on-line competitor respecting false and misleading comparative ads by the defendant - At issue was whether the report of the expert accounting firm retained by the plaintiff to quantify its loss was admissible and whether the defendant should pay all or part of that disbursement - Civil Procedure rule 63.10A included the reasonable cost of reports of experts as a disbursement recoverable from the opposite party - The expert quantified all of the losses allegedly suffered by the plaintiff from competition with the defendant - That claim was rejected by the court - The plaintiff's damages were limited to the losses suffered as a result of the false or misleading ads - The trial judge held that notwithstanding the rejection of the basis for damages claimed by the plaintiff (supported by the expert's quantification), it was reasonable for the plaintiff to retain the expert and necessary and appropriate to incur the disbursement - Further, the trial judge relied heavily on the information contained in the expert's report - The trial judge declined to order the defendant to pay the full amount of the disbursement, given the mixed success at trial - The plaintiff was entitled to a just and reasonable contribution from the defendant, which the court fixed at $50,000 - The Nova Scotia Court of Appeal affirmed the admissibility of the report, notwithstanding that all of its assumptions (defendant responsible for entire market share loss) were not accepted by the trial judge - The trial judge still relied extensively on the information in the report to determine appropriate damages and found that retaining the expert was reasonable - The ultimate use to which an expert's report was put did not determine its admissibility - There was no error in the discretionary decision to award the plaintiff $50,000 towards the $71,384.63 cost of the report - See paragraphs 98 to 122.

Trade Regulation - Topic 506

Competition - General - Civil remedy - Competition Act (s. 36) - The plaintiff travel agency claimed damages under s. 36(1) of the federal Competition Act from the defendant online competitor for the defendant's comparative price ads, some of which were false and misleading in a material respect - The trial judge held that compensation was limited to losses resulting from the misleading ads, not those losses that would have arisen in any event because of such factors as the defendant's legitimate ads, the effect of the defendant entering the market, and other external factors affecting the plaintiff's market share - Section 36 was not intended to compensate for legitimate competition and advertising which was not false or misleading - The statutory remedy did not provide for the remedy of an accounting - The evidence supporting the plaintiff's damage claim was compromised, because it addressed the plaintiff's total losses from the overall competitive effects of the defendant entering the market, not just the false or misleading advertising - The misleading ads did result in lost commission income due to a reduced market share - The court assessed that loss at $216,842 - The Nova Scotia Court of Appeal dismissed the defendant's appeal - There was no error in inferring that the misleading ads caused a loss of market share to the plaintiff and in quantifying that loss at $216,842 - The court stated that "the damages the judge awarded were the result of her systematic evaluation of the evidence before her. There was evidence before her supporting each of her findings of fact. Given her thorough analysis in determining the amount of the damages and the fact that when determining damages there may not be one right answer, I would not interfere." - See paragraphs 23 to 97.

Trade Regulation - Topic 645

Competition - Advertising - False or misleading advertising - A print ad by the defendant online tour operator compared the price of its package to a Dominican Republic resort to that of the plaintiff travel agency based on information provided by the plaintiff - The ad did not indicate that the defendant's price was for a limited time or that it was a special or sales price - The dates for the price were in small print, not large enough to bring them to the reader's attention - The ad also stated that the defendant "offers vacations for less by eliminating the travel agent middleman and passing the savings on to you" - The trial judge held that the general and literal impression of the ad was that the defendant could offer vacations at a lower cost than the plaintiff because of savings achieved by eliminating the travel agent middleman - Although the ad was correct in reference to that one resort on the particular date, it left the impression that similar savings were available to other vacation destinations generally - Given the fact that the plaintiff was price matching in some instances, the general sense of the ad may have been false in some cases - However, the defendant's ad was misleading (Competition Act, s. 52) - Because of price matching, it was misleading in a material respect, in that it left the impression that the plaintiff was more expensive because commissions increased the package price - The ad was knowingly one-sided, without a reasonable basis for its representation - It was clearly unfair - The defendant deliberately dropped its price, which was the same as the plaintiff's, for a period of four days solely to run an ad leaving the impression that its vacation packages were cheaper - The Nova Scotia Court of Appeal affirmed the decision, finding that the trial judge did not err in any respect - See paragraphs 18 to 30.

Trade Regulation - Topic 645

Competition - Advertising - False or misleading advertising - A series of print ads by the defendant online tour operator advertised vacation packages not available from the plaintiff travel agency - The ads were capable of two meanings - First, that the plaintiff could not offer those locations and prices - Secondly, because the defendant sold direct packages, you could not purchase them from the plaintiff or any other travel agency - The Nova Scotia Supreme Court held that the ads, which were carefully worded to be ambiguous, were not false or misleading in a material respect - The ads were correct in that the vacation packages could not be purchased from the plaintiff or any other travel agency - Although the ads pushed the bounds of fairness, they did not cross the line, given the two alternate meanings - The Nova Scotia Court of Appeal held that the trial judge did not err in finding that the ads were not false or misleading - See paragraphs 123 to 132.

Cases Noticed:

Bell Mobility Inc. v. Telus Communications Co. (2006), 234 B.C.A.C. 58; 387 W.A.C. 58; 2006 BCCA 578, refd to. [para. 4].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 14].

MacDonald v. McCormick (2009), 274 N.S.R.(2d) 258; 874 A.P.R. 258; 2009 NSCA 12, refd to. [para. 16].

Woodhouse v. Nigerian Produce, [1971] 1 All E.R. 665, refd to. [para. 16].

R. v. Independent Order of Foresters (1989), 32 O.A.C. 278 (C.A.), refd to. [para. 16].

R. v. Stucky (D.), [2006] O.T.C. 1323 (Sup. Ct.), revd. 2009 ONCA 151, refd to. [para. 16].

R. v. International Vacations Ltd. (1980), 33 O.R.(2d) 327 (C.A.), refd to. [para. 26].

H.L. v. Canada (Attorney General) et al. (2005), 333 N.R. 1; 262 Sask.R. 1; 347 W.A.C. 1; 2005 SCC 25, refd to. [para. 32].

B.M.G. v. Nova Scotia (Attorney General) (2007), 260 N.S.R.(2d) 257; 831 A.P.R. 257; 2007 NSCA 120, refd to. [para. 32].

Culhane v. ATP Aero Training Products Inc. et al. (2005), 332 N.R. 387; 2005 FCA 129, refd to. [para. 32].

McNaughton v. Ward (2007), 256 N.S.R.(2d) 355; 818 A.P.R. 355; 2007 NSCA 81, refd to. [para. 36].

Athey v. Leonati et al., [1996] 3 S.C.R. 458; 203 N.R. 36; 81 B.C.A.C. 243; 132 W.A.C. 243, refd to. [para. 37].

R. v. R.E.M. (2008), 380 N.R. 47; 260 B.C.A.C. 40; 439 W.A.C. 40; 2008 SCC 51, refd to. [para. 55].

Olsen et al. v. Behr Process Corp. et al., [2003] B.C.T.C. Uned. 138; 2003 BCSC 429, refd to. [para. 60].

Steele v. Toyota Canada Inc. et al., [2008] B.C.T.C. Uned. 691; 2008 BCSC 1063 (S.C.), refd to. [para. 61].

Apotex Inc. v. Hoffmann-La Roche Ltd. et al. (2000), 139 O.A.C. 63 (C.A.), refd to. [para. 63].

Naylor Group Inc. v. Ellis-Don Construction Ltd. (2001), 277 N.R. 1; 153 O.A.C. 341; 2001 SCC 58, refd to. [para. 66].

Flynn v. Halifax (Regional Municipality) et al. (2005), 232 N.S.R.(2d) 293; 737 A.P.R. 293; 2005 NSCA 81, refd to. [para. 67].

Hendrickson v. Hendrickson (2005), 234 N.S.R.(2d) 212; 745 A.P.R. 212; 2005 CarswellNS 321; 2005 NSSC 202, refd to. [para. 115].

Sidorsky et al. v. CFCN Communications Ltd. et al. (1995), 167 A.R. 181; 1995 CarswellAlta 86 (Q.B.), refd to. [para. 116].

Founders Square Ltd. v. Coopers & Lybrand (1999), 179 N.S.R.(2d) 375; 553 A.P.R. 375; 1999 NSCA 131, refd to. [para. 121].

Conrad v. Snair et al. (1996), 150 N.S.R.(2d) 214; 436 A.P.R. 214 (C.A.), refd to. [para. 121].

Purolator Courier Ltd. v. United Parcel Service Canada Ltd., [1995] O.J. No. 876 (Gen. Div.), refd to. [para. 130].

R. v. Multitech Warehouse Direct Inc. (1992), 119 N.S.R.(2d) 52; 330 A.P.R. 52 (Prov. Ct.), refd to. [para. 130].

R. v. Lowe (R.M.) Real Estate Ltd. and Pastoria Holdings Ltd. (1978), 40 C.C.C.(2d) 529 (Ont. C.A.), refd to. [para. 132].

Counsel:

Peter Bryson, Q.C., and Daniel Wallace, for the appellant;

David P.S. Farrar, Q.C., and John T. Shanks, for the respondent.

This appeal and cross-appeal were heard on January 27, 2009, at Halifax, N.S., before Saunders, Hamilton and Fichaud, JJ.A., of the Nova Scotia Court of Appeal.

On April 22, 2009, Hamilton, J.A., delivered the following judgment for the Court of Appeal.