R. v. Atlantic Sugar Refineries Co., Redpath Industries Ltd., St. Lawrence Sugar Ltd. and S.L.S.R. Holdings Ltd., (1980) 32 N.R. 562 (SCC)

• Judge: Martland, Ritchie, Pigeon, Dickson, Beetz, Estey and McIntyre, JJ.
• Court: Supreme Court (Canada)
• Case Date: July 18, 1980
• Jurisdiction: Canada (Federal)
• Citations: (1980), 32 N.R. 562 (SCC);54 CCC (2d) 373;[1980] 2 SCR 644;[1980] SCJ No 94 (QL);12 BLR 171;16 CR (3d) 128;32 NR 562;1980 CanLII 226 (SCC);115 DLR (3d) 21;5 WCB 95;53 CPR (2d) 1

R. v. Atlantic Sugar Refineries Co. (1980), 32 N.R. 562 (SCC)

MLB headnote and full text

R. v. Atlantic Sugar Refineries Co. Ltd., Redpath Industries Limited, St. Lawrence Sugar Limited and S.L.S.R. Holdings Limited

Indexed As: R. v. Atlantic Sugar Refineries Co., Redpath Industries Ltd., St. Lawrence Sugar Ltd. and S.L.S.R. Holdings Ltd.

Supreme Court of Canada

Martland, Ritchie, Pigeon, Dickson, Beetz, Estey and McIntyre, JJ.

July 18, 1980.

Summary:

This case arose out of two charges against the four accused companies, the primary sugar manufacturers in eastern Canada, of conspiring to enhance unreasonably the price of sugar and conspiring to prevent or lessen unduly competition in the production or supply of sugar contrary to ss. 32(1)(b) and 32(1)(c) of the Combines Investigation Act, R.S.C. 1970, c. C-23. To avoid disastrous price cutting wars in the industry there was a tacit agreement between the companies that each would maintain its historical share of the market and not try to increase it. The arrangement lessened competition, but did not eliminate it, because price concessions were made to big buyers in the constant effort of each to maintain its historical market share and the consequent vital stability in the industry. The Quebec Superior Court in a judgment reported 26 C.P.R.(2d) 14 acquitted the companies on both charges. The Quebec Court of Appeal in a judgment reported 3 B.L.R. 221; 41 C.C.C.(2d) 209, confirmed the acquittal on the charge of conspiracy to enhance unreasonably the price of sugar, but convicted the companies on the charge of conspiracy to prevent or lessen unduly competition or production or supply of sugar. The companies appealed.

The Supreme Court of Canada allowed the appeal and acquitted the companies. The Supreme Court of Canada held that the tacit agreement, even if it was a conspiracy, which it was not, did not contravene s. 32(1)(c), because, competition was not lessened unduly. See paras. 1 to 18.

Estey, J., dissenting, would have upheld the conviction and was of the opinion that the tacit agreement among the companies was a conspiracy which unduly lessened competition in the industry. See paras. 19 to 35.

Criminal Law - Topic 2650

Conspiracy - Agreement - What constitutes conspiracy - Combines Investigation Act, R.S.C. 1970, c. C-23, s. 32(1)(c) - The four accused companies were charged with conspiring to prevent or lessen unduly competition in the production or supply of sugar - Each of the four had for some years a fixed share of the sugar market - From experience the companies knew that to increase its share any one company would have to cut prices, which led to a disastrous price cutting war between them - As a result, there was a tacit agreement that each would maintain its share of the market and would not try to increase it - In practice the leader, Redpath, tended to set the price, which the others followed - Redpath posted its price list, which was available to the others, and also had a pricing policy, which it knew the others would deduce from available data - There was no communication of pricing policy between them, but it was in all their interests to maintain their respective shares of the market, which required the careful and timely application of modified or restricted price cutting activities - Such an informal system was necessary in an oligopolistic industry for the production of a homogenous product, such as sugar - The Supreme Court of Canada held that the tacit agreement resulting from the expected adoption of similar pricing policies by each of the companies did not constitute a conspiracy within the meaning of s. 32(1)(c) of the Combines Investigation Act - See paras. 1 to 18.

Evidence - Topic 305

Circumstantial evidence - Rule in Hodge's Case - The Supreme Court of Canada stated that the Rule in Hodge's Case applied only to the identification of the accused and had no application to the proof of intent - See paras. 16 and 53 to 54.

Trade Regulation - Topic 605

Competition - Price fixing agreements - Unduly - Meaning of - The four accused companies were charged with conspiring to prevent or lessen unduly competition in the production or supply of sugar - Each of the four had for some years a fixed share of the sugar market - From experience the companies knew that to increase its share any one company would have to cut prices, which led to a disastrous price cutting war between them - As a result, there was a tacit agreement that each would maintain its share of the market and would not try to increase it - In practice the leader, Redpath, tended to set the price, which the others followed - Redpath posted its price list, which was available to the others, and also had a pricing policy, which it knew the others would deduce from available data - There was no communication of pricing policy between them, but it was in all their interests to maintain their respective shares of the market, which required the careful and timely application of modified or restricted price cutting activities - Such an informal system was necessary in an oligopolistic industry for the production of a hemogenous product, such as sugar - As a result, competition was lessened, but it was not eliminated, because price concessions were made to big buyers in the constant effort of each to maintain its historical market share and the consequent vital stability in the industry - The Supreme Court of Canada held that the tacit agreement between the companies, even if it was a conspiracy, which it was not, did not contravene s. 32(1)(c), because competition was not lessened unduly - See paras. 1 to 18.

Cases Noticed:

Howard Smith Paper Mills Ltd. et al. v. The Queen, [1957] S.C.R. 403, appld. [paras. 14, 43].

R. v. Aetna Insurance Co. and others, [1978] 1 S.C.R. 731; 15 N.R. 117; 20 N.S.R.(2d) 565; 27 A.P.R. 565; 34 C.C.C.(2d) 157; 75 D.C.R.(3d) 332; 30 C.P.R.(2d) 193, appld. [paras. 14, 41].

R. v. Cooper, [1978] 1 S.C.R. 860; 14 N.R. 181 [paras. 16, 53].

Hodge's Case (1838), 2 Lewin C.C. 227; 168 E.R. 1136, refd to. [para. 16].

R. v. Eddy Match Co. Ltd. et al. (1951), 13 C.R. 217, affd. 18 C.R. 357, refd to. [para. 29].

Container Materials, Ltd. et al. v. The King, [1942] S.C.R. 147, consd. [para. 41].

R. v. Anthes Business Forms Limited et al. (1976), 26 C.C.C.(2d) 349; 20 C.P.R. 1, affd. 22 N.R. 543, consd. [para. 42].

R. v. Northern Electric Co. Ltd. et al. (1955), 111 C.C.C. 241, consd. [para. 42].

R. v. Armco Canada Ltd. (1976), 13 O.R.(2d) 32; 30 C.C.C.(2d) 183; 70 D.L.R.(3d) 287; 24 C.P.R. 145, consd. [para. 45].

Mulcahy v. The Queen (1868), L.R. 3 H.L. 306, consd. [para. 46].

R. v. O'Brien, [1954] S.C.R. 666, consd. [para. 24].

R. v. Electrical Contractors Association of Ontario and Dent, [1961] O.R. 265, consd. [para. 47].

Paradis v. R., [1934] S.C.R. 165, consd. [para. 48].

R. v. Gage (No. 2) (1908), 18 Man. R. 1975, consd. [para. 51].

R. v. Burrows et al. (1966), 54 C.P.R. 95, consd. [para. 51].

McGreevy v. Director of Public Prosecutors, [1973] 3 All E.R. 503, refd to. [para. 53].

R. v. Mitchell, [1964] S.C.R. 471, consd. [para. 53].

John v. The Queen, [1971] S.C.R. 78, consd. [para. 53].

R. v. Bagshaw, [1972] S.C.R. 2, consd. [para. 53].

R. v. Paul (1975), 4 N.R. 435; 27 C.C.C.(2d) 1, consd. [para. 53].

Statutes Noticed:

Combines Investigation Act, R.S.C. 1970, c. C-23, sect. 32(1)(c), sect. 32(1)(b) [para. 1].

Counsel:

L. Yves Fortier, Q.C. and Pierre Hebert, for the appellant Atlantic Sugar Refineries Co. Ltd.;

Colin Irving and Peter Martin, for the appellant Redpath Industries Ltd.;

J.J. Robinette, Q.C. and Yves Beriault, for the appellant St. Lawrence Sugar Limited;

Bruno Peteras, Q.C. and Arnold Fradkin, for the respondent.

This case was heard on December 10, 11 and 12, 1979, at Ottawa, Ontario, before MARTLAND, RITCHIE, PIGEON, DICKSON, BEETZ, ESTEY and McINTYRE, JJ., of the Supreme Court of Canada

On July 18, 1980, the judgment of the Supreme Court of Canada was delivered and the following opinions were filed:

PIGEON, J. - see paragraphs 1 to 18;

ESTEY, J., dissenting - see paragraphs 19 to 55.

MARTLAND, RITCHIE, DICKSON BEETZ and McINTYRE, JJ., concurred with PIGEON, J.