Stewart v. Thorp

Stewart v. Thorp

The Supreme Court upheld the Appellate Division's interpretation that s.498 targets agreements among competitors to regulate conduct and lessen competition, and does not extend to an arrangement to buy out a competitor's assets; therefore the purchase agreement was not unlawful under s.498 and the appellant's action...

Source-derived case information.

Citation
(1918) 59 SCR 671
Parties
Appellant/plaintiff: Stewart; Defendant/respondent: Canadian Anthracite Coal Company, Limited; Defendant/respondent: Canmore Coal Company, Limited; Defendant/respondent: Georgetown Collieries, Limited; Defendant/respondent: Thorp; Defendant/respondent: Neale; Defendant/respondent: Thorne; Defendant/respondent: Weyerhaeuser; Defendant/respondent: Ingram
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
10 June 1918
Procedural Posture
Criminal Law (restraint of Trade/competition) and Contract Dispute / Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Alberta
Outcome
Appeal dismissed with costs; action dismissed
Legal Topics
Restraint of Trade, Unduly Lessening Competition, Section 498 Criminal Code, Buy‑out Agreements, Directors' Liability, Ultra Vires
Source Language
english
Criminal Law Competition Law Contract Law Corporate Law Injunctions Restraint of Trade Unduly Lessening Competition Section 498 Criminal Code +3 more

Source-derived case record

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Parties

Stewart

Appellant/plaintiff

Canadian Anthracite Coal Company, Limited

Defendant/respondent

Canmore Coal Company, Limited

Defendant/respondent

Georgetown Collieries, Limited

Defendant/respondent

Thorp

Defendant/respondent

Neale

Defendant/respondent

Thorne

Defendant/respondent

Weyerhaeuser

Defendant/respondent

Ingram

Defendant/respondent

Procedural Posture

Criminal Law (restraint of Trade/competition) and Contract Dispute / Appeal to the Supreme Court of Canada From the Appellate Division of the Supreme Court of Alberta

Legal Issues

  1. 1 Whether a contract to purchase a rival's assets constitutes an agreement "to unduly prevent or lessen competition" under s.498 Criminal Code
  2. 2 Whether s.498 applies to buy‑out arrangements as opposed to agreements among continuing competitors to regulate conduct
  3. 3 Whether directors are liable to the company for payments made under the agreement

Ratio Decidendi

The Supreme Court upheld the Appellate Division's interpretation that s.498 targets agreements among competitors to regulate conduct and lessen competition, and does not extend to an arrangement to buy out a competitor's assets; therefore the purchase agreement was not unlawful under s.498 and the appellant's action failed.

Court Disposition

Appeal dismissed with costs; action dismissed

Orders

  • Appeal dismissed with costs
  • Action dismissed