Can. Cement v. Lightweight Aggregate (1983), 47 N.R. 191 (SCC)
MLB headnote and full text
Canada Cement LaFarge Ltd./Ciments Canada LaFarge Ltée, LaFarge Canada Ltd., LaFarge Concrete Ltd./LaFarge Beton Ltée, and Deeks-LaFarge Ltd. (the “LaFarge Group”) and Ocean Construction Supplies Limited, Construction Aggregates Ltd., and Metro Concrete Ltd. (the “Ocean Group”) v. British Columbia Lightweight Ltd. and Rockcrete Ready-Mix Ltd., Deeks Sand & Gravel Co. Ltd., Holdings Ltd., Deeks Concrete Brick Ltd., Deeks Block Ltd., Lorraine Ltd., T.G. & Co. Ltd., Island Ready-Mix Ltd., Holmes & Wilson Limited, Holmes & Wilson Trucking Company Limited, Fraser Valley Concrete Products Ltd., Butler-LaFarge Ltd., Friday Harbor Sand & Gravel Co., Evans Coleman & Gilley Brothers Limited, Ocean Cement Limited, Ocean Cement & Supplies Ltd., Ocean Construction Supplies Northern Limited, Ocean Construction Supplies (Victoria) Limited, Ocean Cement Trading Limited, Pacific Brick & Block Limited, British Columbia Cement Company Limited, Genstar Limited/Genstar Limitée, Metro Concrete Western Ltd., Inland Cement Industries Limited, Con-Force Products Ltd.; British Columbia Lightweight Aggregate Ltd. v. Canada Cement LaFarge Ltd., et al.
Indexed As: Canada Cement LaFarge Ltd. et al. v. British Columbia Lightweight Aggregate Ltd. et al.
Supreme Court of Canada
Laskin, C.J.C., Ritchie, Estey, McIntyre and Wilson, JJ.
April 26, 1983.
Summary:
Canada Cement LaFarge Ltd. and Ocean Construction Supplies Limited illegally combined to control the concrete industry in British Columbia. Knowing this, British Columbia Lightweight Aggregate Ltd., a manufacturer of “Saturnalite”, a lightweight aggregate for use in concrete, reached an agreement with Canada Cement and Ocean Construction that it be the sole supplier of lightweight aggregate in British Columbia. In return, B.C. Lightweight Aggregate agreed not to produce concrete blocks. The agreement and renewals ran until 1970, when they were not renewed. Thereafter, Ocean and Canada Cement began to use pumice from Seattle, a natural and cheaper lightweight aggregate than Saturnalite. As a result, B.C. Lightweight Aggregate’s business declined and its plant closed in 1974. B.C. Lightweight Aggregate brought an action against Canada Cement and Ocean Construction for damages for conspiracy to injure. The British Columbia Supreme Court in a judgment reported 103 D.L.R.(3rd) 587, allowed the action and awarded $750,000 damages. The defendants appealed. The British Columbia Court of Appeal in a judgment reported [1981] 4 W.W.R. 385; 123 D.L.R.(3rd) 66, dismissed the appeal. The defendants appealed. The Supreme Court of Canada allowed the appeal and dismissed the action. The court discussed the elements of liability for the tort of conspiracy to injure. The court held that, where the defendants use lawful means to injure the plaintiff, the predominant purpose of the defendants’ conduct must be to cause the injury to the plaintiff for an action to lie. The court held that, where the conduct of the defendants is unlawful (such as the defendants’ admitted breach of the Combines Investigation Act in this case), the conduct must be directed towards the plaintiff for an action to lie. The court held that the defendants’ unlawful conduct was not directed at the plaintiff. The court found further that the defendants’ illegal combination to control the concrete industry did not cause the plaintiffs’ demise, but their lawful use of pumice instead of the plaintiffs’ lightweight aggregate did.
Actions – Topic 1704
Cause of action – Bars – Ex turpi causa non oritur actio – No disgraceful matter can found an action – The plaintiff obtained an agreement to be the sole supplier of lightweight aggregate to two groups of companies, which the plaintiff knew had illegally combined to control the British Columbia concrete market – The plaintiff’s business subsequently failed anyway and the plaintiff brought an action for damages against the groups for conspiracy to injure – The defendants pleaded that the plaintiff’s action was barred, because of its participation in the scheme – The Supreme Court of Canada held that the plaintiff’s action was not barred because its participation was not a cause of its failure – See paragraphs 39 to 41.
Actions – Topic 1706
Cause of action – Bars – In pari delicto potior est conditio possidentis – In a case of equal or mutual fault the condition of the party in possession is better or where the fault is mutual, the law leaves the case where it is – The plaintiff obtained an agreement to be the sole supplier of lightweight aggregate to two groups of companies, which the plaintiff knew had illegally combined to control the British Columbia concrete market – The plaintiff’s business subsequently failed anyway and the plaintiff brought an action for damages against the groups for conspiracy to injure – The defendants pleaded that the plaintiff’s action was barred, because of its participation in the scheme – The Supreme Court of Canada held that the plaintiff’s action was not barred because its participation was not a cause of its failure – See paragraphs 39 to 41.
Damages – Topic 526
Limits of compensatory damages – Remoteness – Torts – General – The plaintiff brought an action against the defendants for damages for conspiracy to injure – The Supreme Court of Canada dismissed the action on the ground inter alia that there was no causal connection between the unlawful activities of the defendants and the business injury to the plaintiff – See paragraphs 36 to 38.
Torts – Topic 5086
Interference with economic relations – Conspiracy – Conspiracy to injure – The Supreme Court of Canada set out the elements of liability for the anomalous tort of conspiracy to injure – The court held that, where the defendants’ activities are lawful, the predominant purpose of their conduct must be to cause injury to the plaintiff before an action will lie for damages for actual injury – The court held that, where the defendants conduct is unlawful, such as an illegal combine, the conduct must be directed toward the plaintiff and the defendant should know in the circumstances that injury to the plaintiff is likely to and does result before an action will lie – See paragraphs 20 to 35.
Cases Noticed:
Lornho Limited and others v. Shell Petroleum Company Limited and others, [1982] A.C. 173, appld. [para. 21].
Crofter Hand Woven Harris Tweed Co. v. Veitch, [1942] A.C. 435, appld. [para. 23].
Sorrell v. Smith, [1925] A.C. 700, appld. [para. 23].
International Brotherhood of Teamsters v. Therien, [1960] S.C.R. 265, consd. [para. 27].
Gagnon et al. v. Foundation Maritime Limited, [1961] S.C.R. 435, consd. [para. 27].
Southam Co. Ltd. v. Gouthro et al., [1948] 3 D.L.R. 178 (B.C.S.C.), appld. [para. 39].
National Coal Board v. England, [1954] A.C. 403, consd. [para. 39].
Tallow et al. v. Tailfeathers et al. (1974), 44 D.L.R.(3d) 55 (Alta C.A.), consd. [para. 39].
Tomlinson v. Harrison et al. [1972] O.R. 670; 24 D.L.R.(3d)(Ont. H.C.), consd. [para. 39].
Rondos v. Wawrin et al. (1968), 68 D.L.R.(2d) 658 (Man. C.A.), consd. [para. 39].
Statutes Noticed:
Combines Investigation Act, R.S.C. 1970, c. C-23, sect. 32.
Authors and Works Noticed:
Burns, Peter, The Tort of Conspiracy, 16 U.B.C. L. Rev. 229 [para. 26].
Civil Conspiracy, L.S.U.C. Special Lectures, 1973, p. 502 [para. 25].
Cronkite, Effect of Violation of a Statute by the Plaintiff in a Tort Action (1929), 7 Can. Bar Rev. 67 [para. 40].
Fleming, The Law of Torts (5th Ed.), pp. 24, 33 [para. 20].
Fridman, The Wrongdoing Plaintiff (1972), 18 McGill L.J., 275 [para. 40].
Gibson, Dale, Article on the defence of ex turpi causa non oritur actio (1969), 47 Can. Bar Rev. 89 [para. 40].
Salmond on Torts (17th Ed. 1977), pp. 377 [para. 20]; 379 [para. 24].
Counsel:
R.J. Gibbs, Q.C., and D.F. Robinson, for the appellants the LaFarge group;
J. Edgar Sexton, Q.C., Brian G. Morgan, and G.A. Urquhart, for the appellants the Ocean group. Rees Brock, Q.C., and Vince Orchard, for the respondent.
This case was heard on November 29 and 30, 1982, at Ottawa, Ontario, before LASKIN, C.J.C., RITCHIE, ESTEY, McINTYRE and WILSON, JJ., of the Supreme Court of Canada.
On April 26, 1983, ESTEY, J., delivered the following judgment for the Supreme Court of Canada:
