R. v. Maxzone Auto Parts (Canada) Corp., (2012) 418 F.T.R. 256 (FC)

• Court: Federal Court (Canada)
• Case Date: May 03, 2012
• Jurisdiction: Canada (Federal)
• Citations: (2012), 418 F.T.R. 256 (FC);2012 FC 1117

R. v. Maxzone Auto Parts Corp. (2012), 418 F.T.R. 256 (FC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2012] F.T.R. TBEd. SE.049

Her Majesty the Queen v. Maxzone Auto Parts (Canada) Corp.

(T-798-12; 2012 FC 1117; 2012 CF 1117)

Indexed As: R. v. Maxzone Auto Parts (Canada) Corp.

Federal Court

Crampton, C.J.

September 24, 2012.

Summary:

A company carrying on business in Canada pleaded guilty under s. 46 of the Competition Act to implementing a foreign directive intended to give effect to an agreement or arrangement that, if entered into in Canada, would have violated s. 45 of the Act (unduly lessen competition). The Crown and company jointly recommended a fine of $1,500,000, being 10% of the company's total sales during the relevant period.

The Federal Court accepted the joint recommendation, notwithstanding concerns as to whether the evidentiary record and submissions were sufficient to determine whether the amount of the fine was not contrary to the public interest and did not bring the administration of justice into disrepute.

Criminal Law - Topic 5813

Sentencing - Sentencing procedure and rights of accused - Plea bargain or joint submission - Effect of - The Federal Court stated that "before accepting a jointly recommended sentence, the court must be satisfied that the sentence would not be both contrary to the public interest and such as to bring the administration of justice into disrepute" - See paragraph 22.

Criminal Law - Topic 5813

Sentencing - Sentencing procedure and rights of accused - Plea bargain or joint submission - Effect of - [See Trade Regulation - Topic 9186 ].

Trade Regulation - Topic 619

Competition - Price fixing agreements - Sentences and sentencing - [See Trade Regulation - Topic 9186 ].

Trade Regulation - Topic 9163

Offences - Sentencing - General - Fines - [See Trade Regulation - Topic 9186 ].

Trade Regulation - Topic 9185

Offences - Sentence - Conspiracy to limit competition - [See Trade Regulation - Topic 9186 ].

Trade Regulation - Topic 9186

Offences - Sentence - Particular offences - Foreign directives - A Canadian company (Maxzone) was affiliated with foreign companies that entered into a price-fixing agreement that, if made in Canada, would violate s. 45 of the Competition Act (unduly lessen competition) - Maxzone complied with foreign directives to implement the agreement in Canada - Maxzone pleaded guilty under s. 46 to implementing a foreign directive to give effect to an agreement that would violate s. 45 - The Crown and Maxzone, in a short two paragraph joint submission, recommended a fine of $1,500,000, which was 10% of Maxzone's total sales during the relevant period - The Federal Court accepted the joint recommendation, notwithstanding concerns as to whether the evidentiary record and submissions were sufficient to determine whether the amount of the fine was not contrary to the public interest and did not bring the administration of justice into disrepute - The Competition Bureau's 2010 Bulletin provided for a "starting point" sentence of 20% of sales volume, but permitted a 50% reduction for the first party to seek leniency under the Bureau's Leniency Program (which Maxzone was) - The court stated that the framework described in the Leniency Bulletin was consistent with the sentencing principles of the Criminal Code - Further, "if followed in letter and spirit, the framework is sufficiently comprehensive and flexible to permit the court to satisfy itself that a jointly recommended sentence would not be contrary to the public interest and would not bring the administration of justice into disrepute" - To make the determination, the court set out the information that should be provided to support the recommended sentence, including the amount of the illegal profits, whether the victims were paid restitution and all relevant aggravating and mitigating factors - A court faced with a joint sentence recommendation had to have sufficient information to determine whether the principles of sentencing, such as denunciation and deterrence, were met, and that fines were sufficiently high as to not constitute a "mere licence fee or a cost of doing business" - The court needed to know the factors supporting the agreed fine and why, inter alia, the officers, etc., were not facing fines or imprisonment.

Cases Noticed:

R. v. Steeves (T.) (2010), 360 N.B.R.(2d) 88; 930 A.P.R. 88; 2010 NBCA 57, refd to. [para. 21].

R. v. Cerasuolo (J.C.) (2001), 140 O.A.C. 114; 151 C.C.C.(3d) 445 (C.A.), refd to. [para. 21].

R. v. Downey (D.), [2006] O.A.C. Uned. 228 (C.A.), refd to. [para. 21].

R. v. Haufe (O.), [2007] O.A.C. Uned. 288; 2007 ONCA 515, refd to. [para. 21].

R. v. Verdi-Douglas (2002), 162 C.C.C.(3d) 37 (Que. C.A.), refd to. [para. 21].

R. v. Sinclair (E.J.) (2003), 184 Man.R.(2d) 1; 318 W.A.C. 1; 2004 MBCA 48, refd to. [para. 21].

R. v. Ipeelee (M.) (2012), 428 N.R. 1; 288 O.A.C. 224; 318 B.C.A.C. 1; 541 W.A.C. 1; 2012 SCC 13, refd to. [para. 23].

R. v. Nasogaluak (L.M.) (2010), 398 N.R. 107; 474 A.R. 88; 479 W.A.C. 88; 2010 SCC 6, refd to. [para. 24].

R. v. Sargeant (1974), 60 Cr. App. R. 74, refd to. [para. 51].

R. v. C.A.M., [1996] 1 S.C.R. 500; 194 N.R. 321; 73 B.C.A.C. 81; 120 W.A.C. 81, refd to. [para. 51].

R. v. Nova Scotia Pharmaceutical Society (No. 2), [1992] 2 S.C.R. 606; 139 N.R. 241; 114 N.S.R.(2d) 91; 313 A.P.R. 91, refd to. [para. 52].

Canada v. Kason Industries Inc. (2011), 385 F.T.R. 296; 2011 FC 281, refd to. [para. 52].

R. v. Canada Pipe Co. (1995), 101 F.T.R. 211 (T.D.), refd to. [para. 52].

R. v. Kanzaki Specialty Papers Inc. (1994), 82 F.T.R. 63 (T.D.), refd to. [para. 52].

R. v. Albany Felt Co. of Canada et al. (No. 2) (1980), 52 C.P.R.(2d) 204 (Que. S.C.), refd to. [para. 52].

R. v. Browning Arms of Canada Ltd. (1974), 18 C.C.C.(2d) 298 (Ont. H.C.), refd to. [para. 52].

R. v. Dominion Steel (1957), 27 C.P.R. 57 (Ont. H.C.), refd to. [para. 52].

R. v. Firestone Tire & Rubber Co. (1953), 107 C.C.C. 286 (Ont. C.A.), refd to. [para. 52].

R. v. Mitsubishi Corp., [2005] O.J. No. 2394 (Sup. Ct.), refd to. [para. 59].

Canada v. UCAR Inc. (1999), 164 F.T.R. 85 (T.D.), refd to. [para. 59].

R. v. McNamara et al. (No. 2), [1981] O.J. No. 3260 (C.A.), refd to. [para. 59].

R. v. Hoffman-LaRoche Ltd. (No. 2) (1980), 53 C.P.R.(2d) 189 (Ont. C.A.), refd to. [para. 59].

R. v. Canadian General Electric Co., [1977] O.J. No. 509 (C.A.), refd to. [para. 59].

R. v. Armco Canada Ltd. et al. (No. 2) (1975), 19 C.P.R.(2d) 273 (Ont. H.C.), varied (1977), 13 O.R.(2d) 32 (C.A.), refd to. [para. 59].

R. v. Aetna Insurance Co. (1975), 12 N.S.R.(2d) 362; 6 A.P.R. 362 (C.A.), revd. [1978] 1 S.C.R. 731; 15 N.R. 117; 20 N.S.R.(2d) 565; 27 A.P.R. 565, refd to. [para. 59].

R. v. St. Lawrence Corp. et al. (1967), 51 C.P.R. 170 (Ont. H.C.), affd. [1969] O.J. No. 1326 (C.A.), refd to. [para. 59].

R. v. Davis Wire Industries Ltd. (1992), 47 C.P.R.(3d) 394, refd to. [para. 60].

R. v. Ocean Construction Supplies Ltd. (1974), 15 C.P.R.(2d) 224 (B.C.S.C.), refd to. [para. 60].

R. v. Shell Canada Products Ltd. (1990), 63 Man.R.(2d) 1; 75 C.P.R.(3d) 365 (C.A.), refd to. [para. 60].

R. v. Rolex Watch Co. of Canada Ltd. (1980), 50 C.P.R.(2d) 222 (Ont. C.A.), refd to. [para. 60].

R. v. A & M Records of Canada Ltd. (1980), 51 C.P.R.(2d) 225 (Ont. Co. Ct.), refd to. [para. 60].

R. v. Kito Canada Ltd. (1976), 25 C.P.R.(2d) 145 (Man. C.A.), refd to. [para. 60].

R. v. Superior Electronics Inc. (1979), 45 C.P.R.(2d) 234 (B.C.C.A.), refd to. [para. 60].

R. v. Northern Electric Co. et al. (1957), 26 C.P.R. 73 (Ont. H.C.), refd to. [para. 60].

R. v. Goodyear Tire & Rubber Co., [1956] S.C.R. 303, refd to. [para. 60].

R. v. Ciment Québec Inc., [1986] J.Q. No. 2580, refd to. [para. 62].

R. v. Cotroni; R. v. Papalia, [1979] 2 S.C.R. 256; 26 N.R. 133, refd to. [para. 66].

R. v. Cominco Ltd. et al. (1980), 25 A.R. 479 (C.A.), refd to. [para. 66].

Thomson Newspapers Ltd. v. Director of Investigation and Research, Combines Investigation Act et al., [1990] 1 S.C.R. 425; 106 N.R. 161; 39 O.A.C. 161, refd to. [para. 78].

R. v. Serfaty, [2006] O.J. No. 2281 (C.A.), refd to. [para. 80].

Statutes Noticed:

Competition Act, R.S.C. 1985, c. C-34, sect. 45(1)(c) [para. 18].

Authors and Works Noticed:

Canada, Consumer and Corporate Affairs, Competition Law Amendments, A Guide (Dec. 1985), p. 27 [para. 53].

International Competition Network, Cartels Working Group, Setting of Fines for Cartels in ICN Jurisdictions (2008), pp. 7 [para. 65]; 11 [para. 79].

Organization for Economic Co-operation and Development, Fighting Hard-Core Cartels - Harm, Effective Sanctions and Leniency Programmes (2002), pp. 77 [para. 65]; 91 [para. 64].

Organization for Economic Co-operation and Development, Hard Core Cartels - Recent Progress and Challenges Ahead (2003), pp. 27 [para. 63]; 29 [para. 79].

Organization for Economic Co-operation and Development, Hard Core Cartels - Third Report on the Implementation of the 1998 Recommendation (2005), p. 25 [para. 75].

Ruby, Clayton C., Sentencing (7th Ed. 2008), §19.53 [para. 88].

Counsel:

Gary Caracciolo and Nicola Pfeifer, for the Crown;

D. Martin Low and Casey W. Halladay, for the accused.

Solicitors of Record:

Myles J. Kirvan, Deputy Attorney General of Canada, Ottawa, Ontario, for the Crown;

McMillan LLP, Vancouver, British Columbia, for the accused.

This matter was heard on May 3, 2012, at Vancouver, British Columbia, before Crampton, C.J., of the Federal Court, who delivered the following judgment on September 24, 2012.