Lexpert US Guides

www.lexpert.ca | LEXPERT • December 2015 | 31 ANTITRUST Background - In July 2007, the Bureau was informed by Cad- bury Canada Inc., through the Immunity Program, of the existence of a price-fixing cartel between chocolate producers in the Canadian market. Cadbury provided information to the Bureau during a prof- fer meeting in August 2007 and a formal immunity agreement was reached in May 2008 (Nestlé at paras 6‒11). The Bureau used Cadbury's information to obtain and execute search warrants against Nestlé Canada Inc. and Hershey Canada Inc. Hershey subsequently approached the Bureau under the Leniency Program and for several years provided information about the price- fixing cartel to the Bureau. A plea agreement between the Bureau and Hershey was ultimately reached in February 2011, with Hershey pleading guilty to one count of price-fixing and paying a C$4-million fine (Nestlé at paras 15‒16). As a result of its investigation and the information provided by Cadbury and Hershey, the Bureau charged Nestlé with price-fixing contrary to s. 45 of the Competition Act, RSC 1985, c C-34. During the Crown's disclosure to the accused, the Crown realized that it had mistakenly disclosed documents received from Cadbury and Her- shey during the proffer stage of negotiations over which it ought to have claimed settlement privilege. The Crown requested that Nestlé return the documents in question, but Nestlé refused. The Crown accordingly brought an application to determine whether that infor- mation had to be disclosed to the accused (Nestlé at paras 19‒20). The court, at the outset of its analysis, rejected the argument put forward by Hershey that solicitor-client privilege attaches to infor- mation provided to the Bureau during proffer meetings. The court noted that Hershey, as an applicant to the Leniency Program, knew that the fundamental purpose of the program was to provide infor- mation that the Crown would use to prosecute the accused. In these circumstances, the court found that Hershey therefore either did not view the information as privileged or waived privilege in order to re- ceive lenient treatment. The court consequently held that if solicitor- client privilege did apply, it was waived once a party instructed its counsel to disclose the information to the Bureau for the purposes of entering into a plea agreement (Nestlé at para 38). The court also held that settlement privilege did not apply to the proffered information. The evidence was likely relevant to the ac- cused and the parties who were seeking to claim privilege would suf- fer no prejudice from the information being disclosed to the defen- dant (Nestlé at para 64). The court emphasized the fact that Cadbury and Hershey knew from the outset that obtaining and retaining immunity or leniency would require them to provide evidence that could be used against others in the price-fixing cartel. The court concluded that Cadbury and Hershey should have known that their evidence would necessarily be relevant to the pros- ecution of Nestlé (Nestlé at para 66). In the court's view, there was no distinction between information provided after the immunity and plea agreements were executed and information provided during the proffer meetings (Nestlé at para 67). The court further held that in the alternative, if pre-agreement in- formation was in fact prima facie protected by settlement privilege, an exception to settlement privilege should apply, based on the right of an accused to make full answer and defence — a right that should trump the public interest in encouraging settlement (Nestlé at para 70). Indeed, the court remarked that "[w]e ought not to allow for the possibility of a wrongful conviction just to reach the desirable goal of achieving resolution" (Nestlé at para 73). The court paid short shrift to the argument put forward by Cadbury and Hershey, namely that such a conclusion would have a cooling effect on the Immunity and Leniency Programs as parties would think twice before stepping forward to provide information to the Bureau. In the court's view, the disclosure of pre-agreement information should not materially affect a person's decision to come forward, since that person already knows they will have to disclose post-agreement information in or- der to maintain their status in the Immunity and Leniency Programs (Nestlé at para 75). Imperial Oil v. Jacques - In October 2014, the Supreme Court of Canada (SCC) ruled in Imperial Oil v. Jacques, [2014] 3 SCR 287 (Imperial Oil) that wiretap information obtained by the Bureau during antitrust investigations may be disclosed to parties in civil and class-action proceedings. This decision may add to concerns about how information in the hands of the Bureau will be treated by courts and the extent to which it will remain confidential. In the summer of 2004, the Bureau commenced an investigation into a conspiracy to fix gasoline pump prices in Québec. The Bureau intercepted and recorded over 220,000 private communications between some of the alleged price-fixers (Imperial Oil at para 2). A "follow-on" class action was initiated against some of the accused and others after 54 charges were laid. The class-action plaintiffs alleged that they suffered damages as a result of the alleged price-fixing conspiracy. Pursuant to Québec's Code of Civil Procedure, CQLR, c C-35, the class-action plaintiffs brought a motion for the disclosure of wiretap information the Bu- reau had obtained from its investigation (Imperial Oil at para 5). The court of first instance ordered disclosure of the wiretap infor- mation with the caveat that it be screened to protect the privacy rights of unrelated third parties (Imperial Oil at para 9). The Québec Court of Appeal dismissed a motion for leave to appeal and the matter was appealed to the SCC (Imperial Oil at para 13). The SCC upheld the decisions of the lower courts. The SCC stat- ed that "seeking truth" is a core principle of the trial process, which is facilitated by the disclosure of information during the pre-trial "ex- ploratory" stage (Imperial Oil at para 24). Civil rules of procedure provide judges with wide discretion to or- der non-parties (such as the Bureau) to produce information to aid in this search for truth. However, the court did note that although the right to disclosure in civil proceedings granted to parties must be understood broadly, it is not unlimited. In exercising their discretion to order the disclosure of information, judges should consider factors such as privacy rights, the relevance of the information at issue, and the accused's right to a fair trial (Imperial Oil at paras 29‒31). The SCC held that in this case, there was no evidence suggesting that the wiretaps would not be relevant to the class action. The SCC also found that any privacy concerns were appropriately addressed by the Superior Court's order to screen the recordings to protect the pri- vacy rights of unrelated third parties. The SCC rejected arguments that disclosure of the wiretaps was precluded by the Competition Act. The SCC specifically addressed s. 29 of the Competition Act, which provides for the confidential treat- ment of certain types of information related to Bureau investigations. The SCC ruled, however, that s. 29 does not apply to intercepted in- formation gathered from wiretaps under Canada's Criminal Code, RSC 1985, c C-46. The SCC explicitly highlighted a portion of s. 29, which states that evidence obtained by the Bureau may be disclosed "for the purpose of the administration or enforcement" of the Com- petition Act (Imperial Oil at paras 36‒37). The SCC similarly rejected arguments that disclosure of the wire- taps was precluded by Canada's Criminal Code. While it is an offense to disclose intercepted private communications under the Criminal

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