Sun-Rype Products Ltd. et al. v. Archer Daniels Midland Co. et al., 2011 BCCA 187

• Judge: Donald, Lowry and Frankel, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: April 15, 2011
• Jurisdiction: British Columbia
• Citations: 2011 BCCA 187;(2011), 305 B.C.A.C. 55 (CA)

Sun-Rype Products v. Archer Daniels (2011), 305 B.C.A.C. 55 (CA);

    515 W.A.C. 55

MLB headnote and full text

Temp. Cite: [2011] B.C.A.C. TBEd. AP.053

Sun-Rype Products Ltd. and Wendy Weberg (respondents/plaintiffs) v. Archer Daniels Midland Company, Cargill, Incorporated, Cerestar USA, Inc. formerly known as American Maize-Products Company, Corn Products International, Inc., Bestfoods, Inc., formerly known as CPC International, Inc., ADM Agri-Industries Company, Cargill Limited, Casco Inc., and Unilever PLC doing business as Unilever Bestfoods North America (appellants/defendants)

(CA038308; CA038314; CA038324; 2011 BCCA 187)

Indexed As: Sun-Rype Products Ltd. et al. v. Archer Daniels Midland Co. et al.

British Columbia Court of Appeal

Donald, Lowry and Frankel, JJ.A.

April 15, 2011.

Summary:

The plaintiffs alleged that the defendants fixed the price of high fructose corn syrup, a sweetener used in various food products. They claimed that as a result of the defendants' price-fixing scheme the defendants overcharged direct purchasers (DPs) like the representative plaintiff, Sun-Rype Products Ltd., and the overcharge passed through to indirect purchasers (IPs), like the representative plaintiff Weberg. Both the DPs and the IPs claimed for the losses they said they suffered as a consequence of the defendants' scheme.

The British Columbia Supreme Court, in a decision reported at [2010] B.C.T.C. Uned. 922, certified the proceeding as a class action. The defendants appealed.

The British Columbia Court of Appeal, Donald, J.A., dissenting, allowed the appeal. The court held that the pleadings did not disclose a cause of action recognized in law that the IPs could maintain against the defendants. The court set aside the order for certification and remitted the application for certification to the trial court for further consideration.

Editor's Note: This appeal was heard consecutively with Pro-Sys Consultants Ltd. et al. v. Microsoft Corp. et al. (2011), 304 B.C.A.C. 90; 513 W.A.C. 90, which was released at the same time.

Damages - Topic 510

Limits of compensatory damages - General - Prohibition against double recovery - [See Damages - Topic 513 ].

Damages - Topic 513

Limits of compensatory damages - General - Defence of passing on - The plaintiffs alleged that the defendants fixed the price of high fructose corn syrup, a sweetener used in various food products, and that as a result of the defendants' price-fixing scheme the defendants overcharged direct purchasers (DPs) and the overcharge passed through to indirect purchasers (IPs) - Both the DPs and the IPs claimed for the losses they said they suffered as a consequence of the defendants' scheme - The defendants appealed from the order which certified the proceeding as a class action - The British Columbia Court of Appeal allowed the appeal - The court held that the IPs had no cause of action recognized in law against the defendants - In responding to a claim made by the DPs alone, it would be no answer for the defendants to say that the DPs had suffered less than they were overcharged because they passed some of the overcharge on to the IPs - Passing on was not a defence that the defendants could raise - Since there was no defence of passing on, it followed that even though an overcharge may have been passed on, the law did not recognize it - It followed that the IPs had no maintainable cause of action against the defendants - If it were otherwise, the defendants could be liable to the DPs for 100% of the overcharge they paid and could also be liable to the IPs for whatever amount of the overcharge may have been passed on (double recovery) - The court set aside the order for certification and remitted the application for certification to the trial court for further consideration - See paragraphs 74 to 97.

Restitution - Topic 8005

Defences - General - Passing-on - [See Damages - Topic 513 ].

Trade Regulation - Topic 506

Competition - General - Civil remedy (Competition Act, s. 36) - The plaintiffs alleged that the defendants fixed the price of high fructose corn syrup, a sweetener used in various food products, and that as a result of the defendants' price-fixing scheme the defendants overcharged direct purchasers (DPs) and the overcharge passed through to indirect purchasers (IPs) - Both the DPs and the IPs claimed for the losses they said they suffered as a consequence of the defendants' scheme - The defendants appealed from the order which certified the proceeding as a class action - The British Columbia Court of Appeal allowed the appeal, holding that the IPs had no cause of action recognized in law against the defendants - Counsel for the proposed class had also attached importance to s. 36(1) of the Competition Act as a basis for the IPs' cause of action - That section provided for recovery of damages for loss or damage suffered as a result of conduct that was contrary to Part VI of the Competition Act - It was contended that "any person who has suffered loss" in s. 36(1) must include indirect purchasers who had borne some of the overcharge the DPs were alleged to have paid to the defendants - The court stated that "a person who has suffered loss can only mean a person who has suffered a loss that is recognized in law" - The pleadings did not disclose a cause of action which, as a matter of law, the IPs could maintain against the defendants - See paragraphs 94 to 95.

Cases Noticed:

Pro-Sys Consultants Ltd. et al. v. Microsoft Corp. et al. (2011), 304  B.C.A.C. 90; 513 W.A.C. 90; 2011 BCCA 186, refd to. [para. 10].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321; 49 B.C.L.R.(2d) 273, refd to. [para. 13].

Kingstreet Investments Ltd. et al. v. New Brunswick (Minister of Finance) et al., [2007] 1 S.C.R. 3; 355 N.R. 336; 309 N.B.R.(2d) 255; 799 A.P.R. 255; 2007 SCC 1, refd to. [paras. 14, 76].

British Columbia v. Canadian Forest Products Ltd., [2004] 2 S.C.R. 74; 321 N.R. 1; 198 B.C.A.C. 1; 324 W.A.C. 1; 2004 SCC 38, refd to. [paras. 14, 76].

Hanover Shoe Inc. v. United Shoe Machinery Corp. (1968), 392 U.S. 481, refd to. [paras. 16, 77].

Illinois Brick Co. v. Illinois (1977), 431 U.S. 720; 97 S. Ct. 2061, refd to. [paras. 16, 77].

Bunker's Glass Co. v. Pilkington plc (2003), 206 Ariz. 9; 75 P.3d 99 (Ariz. Sup. Ct), refd to. [paras. 16, 92].

Chadha v. Bayer Inc. et al. (2003), 168 O.A.C. 143; 63 O.R.(3d) 22; 223 D.L.R.(4th) 158 (C.A.), refd to. [para. 18].

Irving Paper Ltd. v. Atofina Chemicals Inc., [2009] O.J. No. 4021 (Sup. Ct.), leave to appeal denied 2010 ONSC 2705, refd to. [paras. 18, 89].

Pro-Sys Consultants Ltd. v. Infineon Technologies AG et al. (2009), 277 B.C.A.C. 271; 469 W.A.C. 271; 98 B.C.L.R.(4th) 272; 2009 BCCA 503, refd to. [paras. 20, 89].

Bisaillon v. Concordia University, [2006] 1 S.C.R. 666; 348 N.R. 201; 2006 SCC 19, refd to. [paras. 30, 86].

Peter v. Beblow, [1993] 1 S.C.R. 980; 150 N.R. 1; 23 B.C.A.C. 81; 39 W.A.C. 81, refd to. [para. 35].

Tracy et al. v. Instaloans Financial Solutions Centres (B.C.) Ltd. et al. (2010), 290 B.C.A.C. 193; 491 W.A.C. 193; 2010 BCCA 357, refd to. [para. 37].

Smith v. Vancouver City Savings Credit Union, [2008] B.C.A.C. Uned. 87; 83 B.C.L.R.(4th) 209; 2008 BCCA 279, refd to. [para. 38].

Harraway v. Harraway et al. (2009), 280 B.C.A.C. 285; 474 W.A.C. 285; 315 D.L.R.(4th) 182; 2009 BCCA 561, refd to. [para. 40].

2038724 Ontario Ltd. et al. v. Quizno's Canada Restaurant Corp. et al. (2009), 250 O.A.C. 87; 96 O.R.(3d) 252 (Div. Ct.), affd. (2010), 265 O.A.C. 134; 2010 ONCA 466, leave to appeal denied (2011), 417 N.R. 397, refd to. [para. 44].

Hollick v. Metropolitan Toronto (Municipality) et al., [2001] 3 S.C.R. 158; 277 N.R. 51; 153 O.A.C. 279; 2001 SCC 68, refd to. [para. 54].

Rumley et al. v. British Columbia, [2001] 3 S.C.R. 184; 275 N.R. 342; 157 B.C.A.C. 1; 256 W.A.C. 1; 2001 SCC 69, refd to. [para. 56].

Western Canadian Shopping Centres Inc. et al. v. Dutton et al., [2001] 2 S.C.R. 534; 272 N.R. 135; 286 A.R. 201; 253 W.A.C. 201; 2001 SCC 46, refd to. [para. 62].

Segnitz v. Royal & SunAlliance Insurance Co. of Canada, [2003] O.T.C. Uned. 881; 40 C.P.C.(5th) 391 (Sup. Ct.), refd to. [para. 69].

Southern Pacific Co. v. Darnell-Taenzer Lumber Co. (1918), 245 U.S. 531; 38 S. Ct. 186, refd to. [para. 79].

Pro-Sys Consulstants et al. v. Microsoft Corp. et al., [2010] B.C.T.C. Uned. 285; 2010 BCSC 285, refd to. [para. 89].

Chadha v. Bayer Inc. et al. (1999), 107 O.T.C. 36; 45 O.R.(3d) 29 (Sup. Ct.), revd. (2001), 147 O.A.C. 223; 54 O.R.(3d) 520 (Div. Ct.), affd. (2003), 168 O.A.C. 143; 63 O.R.(3d) 22 (C.A.), refd to. [para. 89].

Osmun et al. v. Cadbury Adams Canada Inc. et al., [2009] O.T.C. Uned. V69; 85 C.P.C.(6th) 148 (Sup. Ct.), refd to. [para. 89].

Vitapharm Canada Ltd. v. Hoffmann-La Roche (F.) Ltd. - see Ford et al. v. Hoffmann-La Roche (F.) Ltd. et al.

Ford et al. v. Hoffmann-La Roche (F.) Ltd. et al., [2005] O.T.C. 207; 74 O.R.(3d) 758 (Sup. Ct.), refd to. [para. 89].

Comes v. Microsoft Corp. (2002), 646 N.W.2d 440, refd to. [para. 92].

Clayworth v. Pfizer Inc. (2010), 49 Cal.4th 758, refd to. [para. 92].

Elms et al. v. Laurentian Bank of Canada et al. (2001), 155 B.C.A.C. 73; 254 W.A.C. 73; 90 B.C.L.R.(3d) 195; 2001 BCCA 429, refd to. [para. 96].

Odhavji Estate et al. v. Woodhouse et al., [2003] 3 S.C.R. 263; 312 N.R. 305; 180 O.A.C. 201; 2003 SCC 69, refd to. [para. 96].

Statutes Noticed:

Competition Act, R.S.C. 1985, c. C-34, sect. 36(1)(a) [para. 94].

Counsel:

J.K. McEwan, Q.C., and T.C. Boyar, for the appellants, Cargill, Incorporated, Cerestar USA, Inc. and Cargill Limited (CA038308);

S.R. Schachter, Q.C., and G.B. Gomery, Q.C., for the appellants, Corn Products International, Inc., Bestfoods, Inc., Casco Inc. and Unilever PLC (CA038314);

G.J. Nash, D.M. Brown and J.L. Bolla, for the appellants, Archer Daniels Midland Company and ADM Agri-Industries Company (CA038324);

R.M. Mogerman and D.G.A. Jones, for the respondents, Sun-Rype Products Ltd. and Wendy Weberg.

This appeal was heard on December 1 and 2, 2010, at Vancouver, B.C., before Donald, Lowry and Frankel, JJ.A., of the British Columbia Court of Appeal. The judgment of the Court of Appeal was delivered on April 15, 2011, including the following opinions:

Donald, J.A., dissenting - see paragraphs 1 to 73;

Lowry, J.A. (Frankel, J.A., concurring) - see paragraphs 74 to 98.