Sun-Rype Products Ltd. et al. v. Archer Daniels Midland Co. et al., (2008) 257 B.C.A.C. 218 (CA)

• Judge: Prowse, Huddart and Levine, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: July 10, 2008
• Jurisdiction: British Columbia
• Citations: (2008), 257 B.C.A.C. 218 (CA);2008 BCCA 278

Sun-Rype Products v. Archer Daniels (2008), 257 B.C.A.C. 218 (CA);

    432 W.A.C. 218

MLB headnote and full text

Temp. Cite: [2008] B.C.A.C. TBEd. JL.028

Sun-Rype Products Ltd. and Wendy Weberg (respondents/plaintiffs) v. Archer Daniels Midland Company, Tate & Lyle Ingredients Americas, Inc. formerly known as A.E. Stanley Manufacturing 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)

(CA035109; CA035114; CA035126; CA035133; 2008 BCCA 278)

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

British Columbia Court of Appeal

Prowse, Huddart and Levine, JJ.A.

July 10, 2008.

Summary:

The plaintiffs, Sun-Rype Products Ltd. and Weberg, brought a proposed class action claiming a remedial constructive trust and other relief in relation to overcharges paid by them pursuant to an alleged price fixing scheme by the defendants in relation to the price of high fructose corn syrup. The action was commenced over six years, but just short of 10 years, after the conclusion of the alleged conspiracy. The defendants applied under rule 18A to dismiss the action on the basis that it was statute barred by the six year limitation period under the Limitation Act for unjust enrichment (and for civil conspiracy and tortious interference with economic interests), and by the two year limitation period in the Competition Act. The defendants also sought to strike out the claim in para. 5 of each plaintiff's Reply that the defendants' conduct amounted to fraud and fraudulent breach of trust. Finally, the defendants sought an order that the plaintiffs were not entitled to postponement of the limitation periods.

The British Columbia Supreme Court, in decision reported at [2007] B.C.T.C. Uned. 336, dismissed the application to strike the plaintiffs' claims. The court held that the definition of "trust" in s. 1 of the Limitation Act included a remedial constructive trust so as to entitle the plaintiffs to the benefit of the 10 year limitation period in s. 3(3) of the Act. The plaintiffs' claims were allowed to proceed solely on the basis of their claim for a remedial constructive trust, subject to their action being dismissed as statute barred if the trial judge determined that a remedial constructive trust was not an appropriate remedy. With respect to the defendants' other arguments, the court found that the plaintiffs' Amended Statement of Claim did not disclose a cause of action in equitable fraud and it struck out para. 5 of each plaintiff's Reply. The court also found that the plaintiffs were not entitled to postponement of the limitation periods. The defendants appealed from the dismissal of their application to strike the plaintiffs' claims as statute barred. The plaintiffs cross-appealed, arguing that the court erred in finding that the plaintiffs had not met the burden of establishing that their claims were postponed and in finding that their Amended Statement of Claim did not disclose a claim in equitable fraud.

The British Columbia Court of Appeal dismissed the defendants' appeal. The court held that the trial judge did not err in finding that the definition of "trust" in s. 1 of the Limitation Act included a remedial constructive trust, and in finding that s. 3(3) of the Act applied to provide a 10 year limitation period for the plaintiffs' claim for a remedial constructive trust (assuming the plaintiffs were to establish at trial that a remedial constructive trust was the appropriate remedy). The court allowed the plaintiffs' cross-appeal on the pleadings issue, holding that the trial judge erred in finding that the pleadings did not disclose a cause of action in equitable fraud. With respect to the postponement issue, the court held that the trial judge erred and in his analysis of the claim for postponement of the limitation periods with respect to the plaintiff, Weberg, but not with respect to the plaintiff, Sun-Rype Products Ltd.

Fraud and Misrepresentation - Topic 446

Fraudulent misrepresentation (deceit) - Practice - Pleadings - The British Columbia Court of Appeal stated that it was not persuaded that a plea in equitable fraud necessarily required a plea that there was a special relationship between the parties - See paragraph 99.

Limitation of Actions - Topic 8

General principles - Interpretation of limitation provisions - The plaintiffs brought a proposed class action claiming a remedial constructive trust and other relief in relation to overcharges paid by them pursuant to an alleged price fixing scheme by the defendants - The trial judge dismissed an application to dismiss the action as statute barred - The trial judge held that the definition of "trust" in s. 1 of the Limitation Act included a remedial constructive trust so as to entitle the plaintiffs to the benefit of the 10 year limitation period in s. 3(3) of the Act - The defendants appealed - The defendants argued that s. 3(3) and the other limitation periods under the Act should be interpreted as applying only to causes of action, without regard to the remedy claimed - The British Columbia Court of Appeal stated that "we do not read the Act as supporting the proposition that the remedy claimed can never be taken into account in determining the appropriate limitation period, at least in circumstances where the remedy claimed is a remedial constructive trust ... Only when the remedy is granted can it be said with confidence that the relationship between the parties carried the 'trust-like' obligation to return the property subject to the imposition of the trust. In summary, while we do not quarrel with the defendants' proposition that limitation periods are generally determined by reference to the underlying cause or causes of action, without regard to the remedy claimed, we do not accept that this is a universal truth brooking no exceptions, or that the Act compels such an inflexible approach" - See paragraphs 46 to 52.

Limitation of Actions - Topic 15

General principles - Discoverability rule - Application of - [See Limitation of Actions - Topic 9305 ].

Limitation of Actions - Topic 6006

Trusts - Constructive trusts - [See Limitation of Actions - Topic 8 ].

Limitation of Actions - Topic 6006

Trusts - Constructive trusts - The plaintiffs brought a proposed class action claiming a remedial constructive trust and other relief in relation to overcharges paid by them pursuant to an alleged price fixing scheme by the defendants - The action was commenced over six years, but just short of 10 years, after the conclusion of the alleged conspiracy - The defendants applied under rule 18A to dismiss the action on the basis that it was statute barred by the six year limitation period under the Limitation Act for unjust enrichment (and for civil conspiracy and tortious interference with economic interests), and by the two year limitation period in the Competition Act - The trial judge dismissed the application - The trial judge held that the definition of "trust" in s. 1 of the Limitation Act included a remedial constructive trust so as to entitle the plaintiffs to the benefit of the 10 year limitation period in s. 3(3) of the Act - The plaintiffs' claims were allowed to proceed solely on the basis of their claim for a remedial constructive trust, subject to their action being dismissed as statute barred if the trial judge determined that a remedial constructive trust was not an appropriate remedy - The British Columbia Court of Appeal held that the trial judge was correct in interpreting s. 1 of the Act to include remedial constructive trusts and in finding that the 10 year limitation period under s. 3(3) of the Act applied to the plaintiffs' claims, assuming that they were able to establish their claims at trial and that a remedial constructive trust was the appropriate remedy - See paragraphs 25 to 91.

Limitation of Actions - Topic 9304

Postponement or suspension of statute - When plaintiff has knowledge of facts leading to a conclusion of reasonable prospect of success - [See Limitation of Actions - Topic 9305 ].

Limitation of Actions - Topic 9305

Postponement or suspension of statute - Discoverability rule - The plaintiffs, Sun-Rype Products Ltd. and Weberg, brought a proposed class action alleging an illegal fixing scheme by the defendants in relation to the price of high fructose corn syrup - On an application by the defendants to dismiss the application as statute barred, the trial judge ruled that the plaintiffs were not entitled to postponement of the limitation periods under either s. 6 of the Limitation Act or the common law discoverability rule - The trial judge found that neither plaintiff established that they could not have reasonably known the material facts on which their claims were based before the applicable limitation periods expired - The British Columbia Court of Appeal upheld the trial judge's conclusion on postponement relating to Sun-Rype - The trial judge did not err in finding that reasonable people in positions of responsibility at Sun-Rype had the means of knowledge to know about the price-fixing conspiracy within the limitation periods - The information in the public record, their admitted knowledge of allegations of misconduct in the United States, and their position as a class plaintiff in an action concerning a related food product should have sparked some curiosity and further inquiry - However, the court held that the trial judge erred with respect to Weberg's claim for postponement - The fact that Weberg was a class plaintiff in a consumer products class action during the material time was insufficient to lead to the conclusion that a reasonable person in her position would have reason to seek out facts concerning other potential class litigation - See paragraphs 102 to 138.

Cases Noticed:

Smith v. Vancouver City Savings Credit Union, [2008] B.C.A.C. Uned. 87; 2008 BCCA 279, refd to. [para. 1].

Kerr et al. v. Danier Leather Inc. et al. (2005), 205 O.A.C. 313; 77 O.R.(3d) 321 (C.A.), refd to. [para. 25].

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. 25].

Bell ExpressVu Limited Partnership v. Rex et al., [2002] 2 S.C.R. 559; 287 N.R. 248; 166 B.C.A.C. 1; 271 W.A.C. 1; 2002 SCC 42, refd to. [para. 26].

Paragon Finance plc v. DB Thakerar & Co., [1999] 1 All E.R. 400 (C.A.), refd to. [para. 29].

Becker v. Pettkus, [1980] 2 S.C.R. 834; 34 N.R. 384; 117 D.L.R.(3d) 257, refd to. [para. 32].

Novak et al. v. Bond, [1999] 1 S.C.R. 808; 239 N.R. 134; 122 B.C.A.C. 161; 200 W.A.C. 161; 172 D.L.R.(4th) 385, refd to. [para. 41].

Lameman et al. v. Canada (Attorney General) et al. (2008), 372 N.R. 239; 429 A.R. 26; 421 W.A.C. 26; 2008 SCC 14, refd to. [para. 42].

Soulos v. Korkontzilas et al., [1997] 2 S.C.R. 217; 212 N.R. 1; 100 O.A.C. 241; 146 D.L.R.(4th) 214, refd to. [para. 49].

Rawluk v. Rawluk, [1990] 1 S.C.R. 70; 103 N.R. 321; 38 O.A.C. 81, refd to. [para. 50].

Atlas Cabinets & Furniture Ltd. v. National Trust Co. (1990), 45 B.C.L.R.(2d) 99 (C.A.), refd to. [para. 63].

Taylor v. Davies (1919), 51 D.L.R. 75 (P.C.), refd to. [para. 70].

Barlow Clowes International Ltd. v. Eurotrust International Ltd. (1998), 2 OFLR (ITELR) 42 (Isle of Man H.C.), refd to. [para. 71].

Dubai Aluminium Co. v. Salaam, [2003] 2 A.C. 366; [2002] UKHL 48, refd to. [para. 73].

Peter v. Beblow, [1993] 1 S.C.R. 980; 150 N.R. 1; 23 B.C.A.C. 81; 39 W.A.C. 81; 101 D.L.R.(4th) 621, refd to. [para. 75].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14, refd to. [para. 75].

Minera Aquiline Argentina SA v. IMA Exploration Inc. et al., [2006] B.C.T.C. 1102; 58 B.C.L.R.(4th) 217; 2006 BCSC 1102, affd. [2007] 10 W.W.R. 648; 246 B.C.A.C. 1; 406 W.A.C. 1; 2007 BCCA 319, refd to. [para. 75].

Hartman Estate, Re (2006), 205 O.A.C. 369; 263 D.L.R.(4th) 640 (C.A.), refd to. [para. 83].

Sylvan Lake Golf & Tennis Club Ltd. v. Performance Industries Ltd. and O'Connor, [2002] 1 S.C.R. 678; 283 N.R. 233; 299 A.R. 201; 266 W.A.C. 201; 2002 SCC 19, refd to. [para. 94].

Bayerische Hypotheken-Und Wechsel-Bank Aktiengesellschaft v. Rieder, [2003] B.C.T.C. Uned. 601; 2003 BCSC 1031, refd to. [para. 99].

Ounjian v. St. Paul's Hospital, [2002] B.C.T.C. 104; 2002 BCSC 104, refd to. [para. 111].

Karsanjii Estate v. Roque, [1990] 3 W.W.R. 612; 43 B.C.L.R.(2d) 234 (C.A.), refd to. [para. 113].

Krusel v. Firth et al. (1991), 2 B.C.A.C. 81; 5 W.A.C. 81; 58 B.C.L.R.(2d) 145 (C.A.), refd to. [para. 113].

Levitt v. Carr et al. (1992), 12 B.C.A.C. 27; 23 W.A.C. 27; 66 B.C.L.R.(2d) 58 (C.A.), refd to. [para. 113].

Statutes Noticed:

Limitation Act, R.S.B.C. 1996, c. 266, sect. 1, sect. 3(3) [para. 27].

Authors and Works Noticed:

Birks and Pretto, Breach of Trust (2002), pp. 323 to 334 [para. 85].

British Columbia, Law Reform Commission, Report on Limitations: Part 2 - General, Report No. 15 (1974), generally [para. 53].

New South Wales, Report of the Law Reform Commission: Being the First Report on the Limitation of Actions, Report No. 3 (1967), generally [para. 53].

Ontario, Law Reform Commission, Report on Limitation of Actions (1969), generally [para. 53].

Sullivan, Ruth, Statutory Interpretation (2nd Ed. 2007), p. 57 [para. 37].

Swadling, William J., Limitation, in Birks and Pretto, Breach of Trust (2002), pp. 323 to 334 [para. 85].

Waters, Donovan W.M., The Law of Trusts in Canada (3rd Ed. 2005), pp. 473 [para. 64]; 474 [para. 65]; 1249, 1250 [para. 82]; 1251 [para. 81].

Counsel:

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

J.K. McEwan, Q.C., for the appellants, Cargill Incorporated, Cargill Limited and Cerestar USA Inc.;

K.I. Chalmers, for the appellant, Tate & Lyle Ingredients Americas Inc.;

G.J. Nash, D. Duncan and M. Brown, for the appellants, Archer Daniels Midland Company and ADM Agri-Industries Company;

J.J. Camp, Q.C., and R. Mogerman, for the respondents, Sun-Rype Products Ltd. and W. Weberg.

This appeal and cross-appeal were heard on April 8 to 10, 2008, at Vancouver, British Columbia, before Prowse, Huddart and Levine, JJ.A., of the British Columbia Court of Appeal. The following judgment was delivered by the Court of Appeal on July 10, 2008.