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COMPETITION - Conspiracy - Price discrimination

Wednesday, May 29, 2019 @ 7:00 AM  

Lexis Advance® Quicklaw®
Appeal by the plaintiffs from the summary dismissal of their proposed class action. The appellants, an individual beer consumer and the licensed restaurant he operated, alleged a 2000 framework agreement between the respondent Liquor Control Board and Brewers Retail violated the Competition Act and that a surcharge Brewers levied on licensees violated the Liquor Control Act. The appellants alleged the respondents conspired to divide the beer market between them, embodied in the framework agreement. The motion judge found s. 45 of the Competition Act left leeway for activity regulated under the Liquor Control Act to operate without criminal liability. He found the alleged violation of the Competition Act was within the powers and rights conferred on the respondents under the Liquor Control Act and the regulated conduct defence insulated the respondents from liability. He further found the Liquor Control Act authorized differential prices for licensees and consumers. In direct response to the within litigation, the Ontario Legislature enacted s. 10(3) of the Liquor Control Act that expressly indicated retroactive effect to authorize the framework agreement.

HELD: Appeal dismissed. The motion judge correctly found the Liquor Control Act authorized the impugned conduct and that the regulated conduct defence insulated the respondents from liability under the Competition Act arising out of the framework agreement. The regulated conduct defence was still available when the conduct in issue was retroactively sanctioned. Section 10(3) of the Liquor Control Act was unquestionably within the province’s jurisdiction under property and civil rights and matters of a local or private nature and was constitutionally valid legislation. There was no conflict between the legislation and the Competition Act. Section 3(1.1) of the Liquor Control Act retroactively authorized the price differential between consumers and licensees. As the impugned conduct was authorized by statute, there was no basis for a claim of misconduct by a civil authority.

Hughes v. Ontario (Liquor Control Board), [2019] O.J. No. 2028, Ontario Court of Appeal, A. Hoy A.C.J.O., J.M. Simmons and G.I. Pardu JJ.A., April 17, 2019. Digest No. TLD-May272019006