Supreme Court of Canada
Stewart v. Thorp, (1918), 59 S.C.R. 671
Thorp and others
1918: May 13, 14, 15; 1918: June 10.
Present:—Sir Charles Fitzpatrick C.J. and Davies, Idington, and Brodeur JJ.
ON APPEAL FROM THE APPELLATE DIVISION OF THE SUPREME COURT OF ALBERTA.
Criminal law—Contract—Restraint of trade—Unduly lessening competition—Sec. 498 Cr. C.
The defendant, respondent, the Canadian Anthracite Coal Company, Limited, was the owner of large coal areas in the Canmore District in this province, of which the defendant the Canmore Coal Company, Limited, was the lessee. The plaintiff, appellant, was a shareholder in both of these companies. The individual defendants, respondents, were directors, some of them, of one of these companies, and some of them, of the other, and some of them of both. By agreement dated the 15th of September, 1916, the former company agreed to buy from the defendant, respondent, the Georgetown Collieries, Limited, a rival concern operating in the same district, all of the assets of that company, for the sum of $100,000 plus the cost price of all its supplies and stock in trade. This agreement has been executed by the Anthracite Coal Company, but the execution of it by the Georgetown company was prevented by an injunction in this action restraining it from doing so, and it is for that reason still unexecuted by it. $2,500 has been paid for the supplies, but the payment of anything further
under the contract was stopped by the same injunction. The plaintiff, appellant, sought a declaration that this agreement was "unlawful, illegal and ultra vires" an injunction restraining each of the defendant, respondent, companies from entering into "any other agreement, arrangement, conspiracy or combine with the defendant the Georgetown Collieries, Limited, forbidden by section 498 of the Criminal Code," from paying over any moneys under the impeached agreement or from doing any further act or thing in the carrying out of the same, and an accounting by the individual defendants for any moneys of either the Anthracite company or the Canmore company, paid to the Georgetown company under the same and judgment against them for all moneys so paid.
The action was tried by Mr. Justice Walsh, who dismissed the action at the close of the plaintiff's case as against the defendants, respondents, the Georgetown Collieries, Limited. He, however, after hearing the evidence of the defence, directed judgment to be entered and a formal judgment was entered accordingly, declaring that the arrangements between the other two companies for the purchase by them of the coal deposits of the Georgetown Collieries, Limited, are illegal, tending to unduly prevent or lessen competition in the production, sale and supply of an article which may be the subject of trade or commerce as provided in section 498 of the Criminal Code, but not otherwise in contravention of the said section, and also declaring that the directors of the Canmore Coal Company, Limited, are liable to the said company for any moneys paid by that company in respect of the agreement in question. A reference was ordered to ascertain the amounts and the judgment ordered the defendants, Thorp, Neale, Thorne, Weyerhaeuser, and
Ingram, to repay the amount so found, to the said company; otherwise the action was dismissed and no injunction was granted.
From this judgment the plaintiff appealed and the defendants, Thorp, Ingram, and Neale, and the two first-mentioned companies cross-appealed. The Appellate Division held that the provisions of section 498 of the Criminal Code are clearly intended to apply to agreements among persons who remain in a particular business as to the method and plan by which they will carry it on and as to regulations and rules among themselves so as to lessen competition in the sale, etc., of any article of commerce, and not to an arrangement to buy out and out the property of a competitor, consequently the Appellate Division dismissed the appeal of the present appellant, allowed the cross-appeal of the present respondent and dismissed the action with costs.
On appeal by the plaintiff to the Supreme Court of Canada, the court, after hearing counsel for all parties, reserved judgment, and, at a subsequent date dismissed the appeal with costs.
Appeal dismissed with costs.
Chrysler K.C. and Bennett K.C. for the appellant.
A. H. Clarke K.C. and M. Macleod for the respondent, the Canmore Coal Company and other respondents.
O. M. Biggar K.C. for the respondent the Georgetown Collieries Company.