Greetings to the RDG,
Hoping that everyone had a scary Hallowe’en, I write with news of three judgments, all class action certifications, released concurrently yesterday by the Supreme Court of Canada:
The Court rejected the defence of passing on in unjust enrichment in the case of Kingstreet Investments Ltd. v. New Brunswick (Finance), 2007 SCC 1. That is the rejection of a defence that says that the defendant has passed on the enrichment to someone else.
In the cases released yesterday, the question was whether loss or deprivation can be passed on, allowing one who suffered indirectly to sue. In Infineon Technologies AG, governed by the civil law of Quebec, the claim was for a loss caused by fault, and the
Court held that an indirect purchaser should be allowed to sue. The indirect purchaser is one who bought goods not directly from the wrongdoer, but rather from someone who bought them from the wrongdoer; the wrong in question was a statutory one involving
anticompetitive behaviour (ss 36 and 45 of the federal Competition Act, giving a claim to anyone who has “suffered loss or damage”). Moreover:
[115] In the instant case, there is no risk of double recovery, since the direct and indirect purchasers would be combined in a single group that would make a single collective claim of an aggregate loss. This case does
not involve separate claims, so there is quite simply no risk of multiple liability for a single loss.
Pro-Sys Consultants Ltd. and Sun‑Rype Products Ltd. both came from British Columbia, and were based on common law. Moreover, in both of them,
the plaintiffs also claimed in unjust enrichment. Both for the wrong-based claim and the unjust enrichment claim, the Court held (as it put it) that while the defence of passing on has been rejected “as a matter of restitution
law”, nonetheless this does not preclude the “offensive” use of passing on, i.e. by indirect purchasers to found their causes of action.
My own reaction is that this might be plausible for the wrong-based claim, where we are in a factual inquiry as to whether the plaintiff suffered a loss, and if so, how much. For the restitution claim, however, the question
seems to be more of a legal one. Indeed it is strongly arguable, in my view, that the court answered this question, holding that there is no claim in someone only indirectly impoverished, in R v. M. Geller Inc. [1963] SCR 629, 41 DLR (2d) 367. This
case was not cited.
It is important, however, that the Court has not settled this question of law; these being certification proceedings, it has only held that it is not plain and obvious that the claim must fail (Pro-Sys
Consultants Ltd., [87]; Sun‑Rype Products Ltd., [36]).
Lionel
PS In the sprit of the omnibus bill, now gaining popularity in Canada, allow me to tack on a totally unrelated message to the effect that I have signed up with a group of students and professors here at McGill to raise money
for men’s health charities in this year’s “Movember” campaign. Anyone who would like to donate can do so at this page: http://ca.movember.com/mospace/7615633 You will get a charitable receipt (though
whether it is of any use outside of Canada is another question).