Ontario Court Of Appeal Summaries (October 8 – 12, 2018)

Good evening.

Following are the summaries for this week's civil decisions of the Court of Appeal for Ontario.

In Shah v LG Chem Ltd, the Court of Appeal certified a class action for claims of conspiracy at common law and conspiracy to price fix under the Competition Act, in relation to lithium-ion batteries. The Court determined that the concept of "indeterminate liability" in negligence law should not be imported into the analysis of common conspiracy or Competition Act claims.

In Beaver v Hill, the Court of Appeal, while not disposing of the issue, determined that some Aboriginal and treaty rights may be capable of being asserted by an individual, rather than an Aboriginal community. In this case, the appellant argued that spousal and child support should be decided under his First Nation's law, not under Ontario's family law statutes. The issue was remanded to the Superior Court of Justice to be determined on a proper evidentiary record.

Other topics covered this week included a priority dispute between insurers under the Insurance Act in the MVA context, and the ability to claim HST from a customer well after the supply of the good in question.

Have a great weekend.

John Polyzogopoulos

Blaney McMurtry LLP

416.593.2953 Email


Shah v LG Chem Ltd, 2018 ONCA 819

[Rouleau, Roberts and Fairburn JJ.A.]


  1. Mogerman, J-M. Leclerc and B. Moran, for the appellants

    J.F. Rook, Q.C., C.A. Jordaan and E. Davis, for the respondents Panasonic Corporation, Panasonic Corporation of North America, Panasonic Canada Inc., Sanyo Electric Co., Ltd., Sanyo North America Corporation and Sanyo Energy (U.S.A.) Corporation

    J.K. Wright and T. Shikaze, for the respondents Hitachi Maxell, Ltd. and Maxell Corporation of America

    L.F. Cooper and V. Toppings, for the respondents Toshiba Corporation, Toshiba America Electronic Components, Inc. and Toshiba of Canada Limited

  2. Littlejohn, for the respondents LG Chem. Ltd. and LG Chem America, Inc.

    Keywords: Torts, Unlawful Means Conspiracy, Statutory Claims, Price Fixing, Civil Procedure, Class Actions, Certification, Common Issues, Representative Plaintiff, Pleadings, Reasonable Cause of Action, Class Proceedings Act, 1992, SO 1992, c 6, s 5, Competition Act, RSC, 1985, c C-34, ss 36 and 45


    This appeal arose out of the sale of lithium-ion batteries by the respondents from 2000 until the end of 2011. The appellants alleged that the respondents and unnamed co-conspirators conspired to raise their prices and/or reduce competition in the production, manufacture, sale and/or supply of such batteries.

    The appellants maintained that because the alleged cartel held so much market share (over 75% of the Canadian market), the increase in prices caused non-conspirators to also raise their prices. This is referred to as an "umbrella" effect, and the purchasers of the non-conspirators' products were "umbrella purchasers".

    The Court of Appeal noted that the issue of liability to umbrella purchasers remained a contested issue in Canada, as the procedural history of this appeal was directly parallel to an umbrella purchaser case in British Columbia. In the course of these two cases, each British Columbia and Ontario court respectively rejected each other's reasoning through various stages of appeal. The British Columbia case, Godfrey v. Sony Corporation, 2017 BCCA 302 was granted leave to appeal to the Supreme Court, with the appeal yet to be heard.

    The appellants sought to have multiple causes of action certified under the Class Proceedings Act, including unlawful means conspiracy and an analogous statutory cause of action under s. 36 of the Competition Act for breach of s. 45 of that Act (the "statutory claim"). The certification judge refused to certify the unlawful means conspiracy claim but certified the statutory claim, although only in relation to the non-umbrella purchasers. The certification judge provided several reasons for excluding the umbrella purchasers, including that the respondents would be exposed to indeterminate liability.

    The appellants sought leave to appeal the certification judge's decision to the Divisional Court, and were granted leave on (a) whether the certification judge erred in denying certification of the unlawful means conspiracy claim and (b) whether the certification judge erred in removing the umbrella purchasers from the class. The Divisional Court found error on the first point, resulting in the certification of the unlawful means conspiracy claim, but no error on the second point, agreeing with the certification judge's concern over indeterminate liability.

    The Divisional Court also expressed the view that the appellants had failed to: (a) plead the requisite elements of the claims relating to the umbrella purchasers; (b) establish common issues for the umbrella purchasers; and (c) propose a separate representative plaintiff for the umbrella purchasers. The appellants then sought and were granted leave to appeal to the Court of Appeal.


    (1) Did the Divisional Court err in finding that the umbrella purchaser claims did not disclose a cause of action because:

    (a) the respondents would be exposed to indeterminate liability, and

    (b) the requisite elements of the claim were not properly pleaded?

    (2) Did the Divisional court err in finding that the umbrella purchaser claims did not raise common issues within the meaning of s. 5(1)(c) of the Class Proceedings Act?

    (3) Did the Divisional Court err in finding that a separate representative plaintiff would be required under s. 5(1)(e) of the Class Proceedings Act?


    Appeal allowed.


    (1) Yes.

    (a) Turning to the first to the statutory claim, the Court of Appeal noted that a plain reading of the s. 45 of the Competition Act suggested that the statutory cause of action did not admit any consideration for indeterminate liability. The cause of action required only proof of the respondents conspiring and proof that it caused the appellants' injuries. The Court of Appeal additionally observed that this reading was consistent with the purpose of the Competition Act to foster vigorous and fair competition.

    The Court of Appeal then turned to an analysis of the legal norms that inform the application of negligence principles to statutory causes of action, rejecting the respondents' contention that indeterminate liability should apply in this case because courts have recognized the applicability of remoteness in similar circumstances. The Court expressly avoided answering the question of whether negligence principles might apply outside the negligence context or whether indeterminate liability might apply to claims that require proof of intention, restricting its reasons specifically to the applicability of indeterminate liability in respect of claims under s. 36 of the Competition Act for conspiratorial conduct under s. 45.

    The Court found that the normative concerns underlying indeterminate liability do not apply in the context of a statutory claim because they have already been addressed by Parliament. In other words, concerns that might otherwise drive the application of indeterminate liability disappear in the face of the exacting statutory provisions. The Court similarly rejected the respondents' contention that indeterminate liability remains a concern because the cause of action does not require that the impugned conduct be specifically directed at harming a plaintiff. Section 45 contains significant internal constraints, insofar as it limits the reach of liability to those who, at a minimum, specifically intend to agree upon anti-competitive conduct.

    Turning second to the common law claim for unlawful means conspiracy, the Court noted that unlawful means conspiracy contains even stronger limitations than those contained in the Competition Act since it requires that the impugned conduct be directed at the plaintiffs. Thus, there is no concern surrounding indeterminate liability in relation to the common law tort.

    Lastly, the Court concluded that even if indeterminate liability were relevant to the two claims, the umbrella purchasers' claims still would not fail on that basis. Because of the limitations built into both the statutory claim and the common law claim, there exists only the possibility for significant liability. The Court also rejected the respondents' contention that they had no control over the non-conspirators' actions and therefore should not be subject to liability for the umbrella purchasers' losses, since the respondent in fact controlled the vast majority of the market.

    (b) Turning next to the sufficiency of the pleadings, the Court of Appeal addressed the issue of whether the appellants' statement of claim was deficient for its apparent reliance on the proposition that a causal link could be presumed between the alleged conspiracy and the losses suffered by the umbrella purchasers. The Court found that although the statement of claim was somewhat lacking in particulars, it was nonetheless worded broadly enough to encompass harm to umbrella purchasers and was therefore sufficiently pleaded.

    (2) Yes...

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