Wednesday, February 22, 2012

Limitations Period Ends Garford's Competition Act Claim

Garford Pty Ltd. v. Dywidag Systems International, Canada, Ltd. 2012 FCA 48 Layden-Stevenson JA: Gauthier, Stratas JJA

The latest chapter in the saga of procedural wrangling between Garford and Dywidag tells us that this book will not, after all, be about the relationship between patent law and competition law. Garford commenced an action against Dywidag based on alleged infringement of Garford’s patents, as well for alleged breaches of the Competition Act. In 2010 FC 996 Russell J granted Dywidag’s motion for summary judgment and dismissed Garford’s claim under the Competition Act on the basis that it was out of time. The Court of Appeal has now affirmed, essentially for the reasons given by Russell J.

Garford’s claim was based on s 36 of the Competition Act, and the applicable limitation period is established in s 36(4)(a)(i) as being two years from a “day on which the conduct was engaged in … .” Gardford itself had specified the conduct as being Dywidag entering into certain purchase agreements [FC 16]. Two years from the latest agreement was March 2008, and the action was commenced in August 2008. Garford had argued that the period running of the limitation period did not run from the date of the last agreement because of the reasonable discoverability rule. Russell J held that the rule did not apply to subsection 36(4) of the Competition Act [FC 32], and even if it did, it was not relevant on the facts of the case as, inter alia, Garford was fully aware of all the relevant facts by April of 2006. The Court of Appeal affirmed on the latter basis, without any indication as to its view on the legal question of whether the discoverability rule applied to subsection 36(4).

Garford also argued that the cause of action was continuing, essentially on the grounds that even though the purchase agreements were entered into on a specified date, these agreements had ongoing consequences. Russell J held that the offence (if any) was complete at the date the agreements were entered into, even if the agreements had continuing consequences [FC 42]. The Court of Appeal affirmed [19].

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