r v. National Hockey League, 2021 FC 488

T-1080-20 2021 FC 488 Proposed Class Proceeding Kobe Mohr ( Representative Plaintiff ) v. National Hockey League, American Hockey League Inc, ECHL Inc., Canadian Hockey League, Québec Major Junior Hockey League Inc., Ontario Hockey League, Western Hockey League, Hockey Canada ( Defendants ) Indexed as: Mohr v. National Hockey League Federal Court, Crampton C.J.—Ottawa, May 27, 2021.

Competition — Proposed class proceeding — Motion to strike brought by certain defendants; motion to amend brought by representative plaintiff (representative plaintiff or plaintiff) — In motion to amend, brought pursuant to Federal Courts Rules ( Rules ), r. 75 , representative plaintiff sought leave to amend statement of claim filed on behalf of all major junior hockey players who signed standard player agreement (SPA) that was at heart of one or more conspiracies alleged to have been entered into between defendants (Class Members) — In statement of claim, plaintiff alleged that defendants entered into single conspiracy contrary to Competition Act ( Act ), s. 48(1) — Claimed in particular that defendants conspired to limit unreasonably Class Members’ opportunity to negotiate, play with specific hockey teams — Canadian defendant leagues, their umbrella organization (Canadian Hockey League (CHL)), Hockey Canada brought motion to strike plaintiff’s statement of claim maintaining plain, obvious that Act, s. 48 could not apply to them because applying only to intra-league agreements, arrangements between or among “teams and clubs”, including their directors, officers or employees — Added that statement of claim could not be cured by amending it to claim damages suffered as result of agreement contemplated by general conspiracy provisions in Act, s. 45 — Representative plaintiff, hockey player who played for club in Western Hockey League between 2015–020 — CHL, entity that organizes Canada’s three “major junior” hockey leagues — Defendants CHL, QMJHL, OHL, WHL, Hockey Canada (collectively responding defendants on motion to amend, moving defendants on motion to strike) filing motion to strike before plaintiff filing motion to amend — Issue in motion to amend whether representative plaintiff meeting test for obtaining leave to amend statement of claim; issue in motion to strike whether plain, obvious that representative plaintiff’s statement of claim disclosed no reasonable cause of action or was otherwise abuse of process — Absence of material facts, particulars, as required by Rules , rr. 174, 181, left amended statement of claim without sufficient foundation to support amended allegations made — Was sufficient basis for concluding plain, obvious that amended statement of claim disclosed no reasonable cause of action — Regarding reasonable cause of action under Act, s. 45 , that

section not applying to types of agreements alleged in amended statement of claim — Act, s. 45(1) applying only to “competitors” who enter into conspiracy, agreement or arrangement concerning either “supply” or “production or supply” of product in respect of which they compete — Such elements of s. 45(1) posing insurmountable hurdle for plaintiff — With exception of certain clubs, none of other existing or proposed defendants alleged to have been party to any conspiracy, agreement or arrangement with competitor respecting product — Plain, obvious that NHL, CHL, Hockey Canada not “competitors” of any other party to any of alleged agreements with respect to product — Three offences proscribed in s. 45(1) applying solely to either “supply” or “production or supply” of same product in respect of which alleged conspirators are competitors — By their express terms, provisions in question not applying to purchase or other acquisition of product — Agreements alleged in amended statement of claim plainly not of this type — Based on ordinary meaning of words in s. 45(1) , legislative history thereof, statutory scheme, plain, obvious that plaintiff not pleading reasonable cause of action against existing, proposed defendants under s. 45 , in relation to production, supply of services at issue in this proceeding — Plain, obvious that reasonable cause of action not pleaded in respect of s. 48 in proposed amended statement of claim — Was not alleged, nor apparent, that any of alleged intra-league agreements related exclusively to matters described in s. 48(1), as set forth in s. 48(3) — Various proposed amendments pertaining to alleged conspiracies, as related to wages, players’ images, constituted abuse of process because these questions being litigated before other courts — Amended allegations fell short of providing responding defendants with sufficient information to know case to be met — Proposed amendments not in interests of justice; would not benefit parties to this proceeding, assist Court in pursuit of truth — Concerning moving defendants’ motion to strike, plain, obvious that statement of claim disclosed no reasonable cause of action under Act, ss. 36 or 48 or Canadian Bill of Rights, s. 1(e) — Moreover, existing deficiencies in statement of claim could not be potentially cured by granting plaintiff leave to amend pleading as requested — Motion to amend dismissed; motion to strike granted.

These were two motions in writing in a proposed class proceeding. One motion was a motion to strike brought by certain of the defendants and the other was a motion to amend brought by the representative plaintiff (representative plaintiff or plaintiff).

In his motion to amend, brought pursuant to rule 75 of the Federal Courts Rules ( Rules ), the representative plaintiff sought leave to amend a statement of claim filed on behalf of all major junior hockey players who signed a standard player agreement (SPA) that was at the heart of one or more of the conspiracies alleged to have been entered into between the defendants (the Class Members). In the statement of claim, the plaintiff alleged that the defendants entered into a single conspiracy contrary to subsection 48(1) of the Competition Act ( Act ).

In particular, he claimed that the defendants conspired to limit unreasonably the Class Members’ opportunity to negotiate and play with teams in the National Hockey League (NHL), the American Hockey League Inc. (AHL) and the ECHL Inc. (also known as the East Coast Hockey League) (ECHL). He further claimed that the defendants conspired to impose unreasonable terms and conditions upon the Class Members. The Canadian defendant leagues, their umbrella organization (the Canadian Hockey League (CHL)) and Hockey Canada

brought a motion to strike the plaintiff’s statement of claim in which they maintained that it was plain and obvious that

section 48 of the Act could not apply to them because it applies only to intra-league agreements and arrangements between or among “teams and clubs”, including their directors, officers or employees. They added that the statement of claim could not be cured by amending it to claim damages suffered as a result of an agreement contemplated by the general conspiracy provisions in

section 45 of the Act . In the amended statement of claim, the representative plaintiff proposed to add 148 new defendants, namely, the individual teams of the three Canadian defendant leagues and the three United States-based defendant leagues. He also referred to multiple alleged illegal agreements within the hockey industry rather than to a single alleged conspiracy. The representative plaintiff is a hockey player who played for a club in the Western Hockey League between 2015 and 2020.

The CHL is an entity that organizes Canada’s three “major junior” hockey leagues, namely, the Québec Major Junior Hockey League (QMJHL), the Ontario Hockey League (OHL) and the Western Hockey League (WHL). The defendants CHL, QMJHL, OHL, WHL and Hockey Canada (collectively, the responding defendants on the motion to amend and the moving defendants on the motion to strike) filed their motion to strike before the plaintiff filed his motion to amend.

The issue in the motion to amend was whether the representative plaintiff met the test for obtaining leave to amend the statement of claim.The issue in the motion to strike was whether it was plain and obvious that the representative plaintiff’s statement of claim disclosed no reasonable cause of action or was otherwise an abuse of process. Held , the motion to amend should be dismissed and the motion to strike should be granted.

In determining whether to grant the representative plaintiff’s motion to amend, the Court considered: 1. whether it was plain and obvious, assuming the facts pleaded to be true, that the amended pleading disclosed no reasonable cause of action; 2. whether the proposed amendments assisted the Court to determine the real questions in controversy between the parties; 3. whether the proposed amendments served the interests of justice; and 4. whether the proposed amendments resulted in an injustice to the other party that was not capable of being compensated by an award of costs.

The absence of material facts and particulars, as required by rules 174 and 181, left the amended statement of claim without a sufficient foundation to support the amended allegations that were made. This provided a sufficient basis for concluding that it was plain and obvious that the amended statement of claim disclosed no reasonable cause of action. Nevertheless, other submissions the responding defendants made in support of their position that the representative plaintiff should not be granted leave to file the amended statement of claim were addressed.

The responding defendants correctly asserted that the plaintiff failed to plead a reasonable cause of action under

section 45 of the Act .

Section 45 does not apply to the types of agreements that are alleged in the amended statement of claim. As was apparent from the plain language of subsection 45(1) , it applies only to “competitors” who enter into a conspiracy, agreement or arrangement concerning either the “supply” or the “production or supply” of the product in respect of which they compete. These elements of subsection 45(1) posed an insurmountable hurdle for the plaintiff.

With the exception of the clubs within the AHL and the ECHL and possibly the clubs within the NHL, none of the other existing or proposed defendants were alleged to have been a party to any conspiracy, agreement or arrangement with a “competitor … with respect to a product”. It was plain and obvious that the NHL, the CHL and Hockey Canada are not “competitors” of any other party to any of the alleged agreements, “with respect to a product”.

Moreover, given that it was common ground between the parties that the NHL, the AHL and the ECHL are the first, second and third-tier professional hockey leagues in North America, those leagues are not “competitors” of each other, at least with respect to the product at issue in the present proceedings. The “product” at issue in this proceeding consisted of the services of the Class Members, in particular members of a class consisting of the plaintiff and all individuals who signed a SPA with a club in one of the three leagues comprising the CHL during the relevant period.

On their face, the three offences proscribed in subsection 45(1) of the Act apply solely to either the “supply” or the “production or supply” of the same product in respect of which the alleged conspirators are competitors. By their express terms, those provisions do not apply to the purchase or other acquisition of a product. The agreements alleged in the amended statement of claim were plainly not of this type.

Given that it is the players, rather than the clubs within the AHL and ECHL, who “offer” and then “provide” the services at issue in this proceeding, it was readily apparent from the ordinary meaning of the words in subsection 45(1) that the clubs within those leagues were not competitors in the production or supply of those services, as contemplated by the Act .

Based on the legislative history and the scheme of the Act , it was also readily apparent that the agreements to which the clubs in the AHL and the ECHL were alleged to be a party were not agreements with respect to the production or supply of those services, as contemplated by subsection 45(1) . This legislative history supported the responding defendants’ position that

section 45 does not apply to the types of purchasing agreements to which they or the other defendants were alleged to be parties. In brief, amendments made in 2010 made it clear that Parliament intended to limit the application of

section 45 to hard core cartel agreements, namely, agreements that are unambiguously harmful to competition. Taken together, the statutory scheme contemplated by

section 2, subsection 45(1), subsection 45(4) and

section 90.1 of the Act supported the position of the responding defendants that the types of agreements to which they and the other defendants were alleged to have been a party did not fall within the purview of subsection 45(1) . In

summary, based on the ordinary meaning of the words in subsection 45(1) , the legislative history of that provision, and the statutory scheme, it was plain and obvious that the plaintiff did not plead a reasonable cause of action against the existing and proposed defendants under

section 45 , in relation to the production and supply of the services that were at issue in this proceeding. It was plain and obvious that a reasonable cause of action was not pleaded in respect of

section 48 in the proposed amended statement of claim. This is because it was not alleged, nor was it apparent, that any of the alleged intra-league agreements related exclusively to the matters described in subsection (1), as set forth in subsection 48(3). The

interpretation of subsections 48(1) and (3) asserted by the plaintiff was not supported by the ordinary meaning of the words in subsection 48(3), the scheme of

section 48 as a whole, or the legislative history of that provision. Instead, those words, that scheme and the legislative history are all more consistent with the narrower

interpretation advanced by the responding defendants. To the extent that there was any ambiguity in

section 48 , which is a penal provision, the responding defendants were entitled to the benefit of their narrower

interpretation. The amended statement of claim constituted an abuse of the Court’s process because it sought to add conspiracy claims related to hockey players’ wages that were being litigated in three class actions before Superior Courts in Ontario, Quebec and Alberta, respectively. To litigate these matters anew herein would raise the spectre of a multiplicity of proceedings on these issues. Thus, the various proposed amendments pertaining to the alleged conspiracies, as they related to wages and players’ images, constituted an abuse of process.

In conclusion, it was plain and obvious that the proposed amended statement of claim did not disclose a reasonable cause of action.While this conclusion was sufficient to refuse the plaintiff’s request to make the amendments set forth in the amended statement ofclaim, other factors to be considered in a motion to amend were addressed. The amended allegations fell far short of providing the responding defendants with sufficient information to know the case to be metcontrary to what the plaintiff argued.

As a result of all of the proposed amendments, the amended statement of claim was approximatelydouble the length of the amended statement of claim. Yet, rather than assisting the Court to determine the real issues in controversybetween the parties, it would introduce new complexities and several additional issues. Instead of providing more precision and clarity, itwould give rise to multiple new questions that would need to be resolved. This was in part due to the absence of sufficient facts andparticulars regarding the various alleged conspiracies and their links to sections 45 and 48 of the Act.

Therefore, this considerationweighed against granting the plaintiff’s request to make the modifications reflected in that document. The proposed amendments were not in the interests of justice and would not benefit the parties to this proceeding and assist the Court inthe pursuit of truth contrary to the plaintiff’s argument. Such considerations weighed against granting the plaintiff’s request to make themodifications reflected in the amended statement of claim. As well, the plaintiff’s proposed modifications would introduce newcomplexities and issues and give rise to a range of new questions.

Collectively, these would likely significantly prolong the proceedings.Given that awards of costs in the Court typically do not fully compensate parties for the costs incurred in successfully defending aproceeding, the new complexities, issues and questions presented by the amended statement of claim weighed against granting theplaintiff’s request to make the modifications reflected therein.

With respect to the moving defendants’ motion to strike, such a motion could succeed only if it was plain and obvious, assuming thefacts pleaded to be true, that the amended statement of claim disclosed no reasonable cause of action. It was plain and obvious, evenconsidering facts pleaded to be true, that the amended statement of claim disclosed no reasonable cause of action under sections 36 or48 of the Act or paragraph 1(

e) of the Canadian Bill of Rights, as the amended statement of claim alleged. Moreover, the existingdeficiencies in the amended statement of claim could not be potentially cured by granting the plaintiff leave to amend his pleading asrequested. STATUTES AND REGULATIONS CITED Bill C-2,

An Act to amend the Combines Investigation Act and the Bank Act and to repeal

an Act to amend

an Act to amend theCombines Investigation Act and the Criminal Code, 1st Sess., 30th Parl., 1974, clause 15. Budget Implementation Act, 2009, S.C. 2009, c. 2, ss. 410, 429. Canadian Bill of Rights, S.C. 1960, c. 44 [R.S.C., 1985, Appendix III], ss. 1(e), 2. Combines Investigation Act, R.S.C. 1970, c. C-23, s. 32.3. Competition Act, R.S.C., 1985, c. C-34, ss. 2(1) “supply”, 6(1), 36, 45, 48, 78, 79, 90.1. Federal Courts Rules, SOR/98-106, rr. 75, 174, 181, 200, 221. CASES CITED APPLIED: McCain Foods Limited v. J.R. Simplot Company, 2021 FCA 4; Teva Canada Limited v.

Gilead Sciences Inc., 2016 FCA 176, 140 C.P.R.(4th) 309; Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653. CONSIDERED: Goulet c. National Hockey League et autres, [1980] R.P.Q. 122, AZ-80122012 (Sup. Ct.); Reed v. Canadian Football League (1988), (AB KB), 62 Alta. L.R. (2d) 347, [1988] A.J. No. 1236 (QL) (Q.B.); Authorson v. Canada (Attorney General),2003 SCC 39, [2003] 2 S.C.R. 40. REFERRED TO: Verma v. Canada, 2006 FC 1353; Pelletier v.

Canada, 2020 FC 1019; Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1S.C.R. 27, (1998), 36 O.R. (3d) 418; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559; R. v. McLaughlin, (SCC), [1980] 2 S.C.R. 331, (1980), 113 D.L.R. (3d) 386; R. v. McIntosh, (SCC), [1995] 1 S.C.R.686, (1995), 178 N.R. 161; Dow Chemical Canada ULC v. NOVA Chemicals Corporation, 2018 ABQB 482; Walter c. Quebec MajorJunior Hockey League Inc., 2019 QCCS 2334; Perron-Malenfant v. Malenfant (Trustee of), (SCC), [1999] 3 S.C.R.375, (1999), 177 D.L.R. (4th) 257; Ontario v.

Canadian Pacific Ltd., (SCC), [1995] 2 S.C.R. 1031, (1995), 125 D.L.R.(4th) 385; Berg v. Canadian Hockey League, 2020 ONSC 6389; Walter c. Ligue de hockey junior majeur du Québec inc.,2020 QCCS 3724; Berg v. Canadian Hockey League, 2017 ONSC 2608, revd 2019 ONSC 2106 (Div. Ct.); Walter v. Western HockeyLeague, 2017 ABQB 382, 62 Alta. L.R. (6th) 85; Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, 145 O.R. (3d) 759;Winter v. Sherman Estate, 2018 ONCA 703, 42 E.T.R. (4th) 181; Erschbamer v. Wallster, 2013 BCCA 76, 356 D.L.R. (4th) 634; Walterv. Western Hockey League, 2020 ABQB 631; Pelletier v.

Canada (Attorney General), 2006 FCA 418, 56 Admin. L.R. (4th) 74. AUTHORS CITED Canada. House of Commons. Government Response to the Report of the House of Commons Standing Committee on Industry, Scienceand Technology, A Plan to Modernize Canada’s Competition Regime (October 1, 2002).

Canada. House of Commons. Report of the Standing Committee on Industry, Science and Technology. A Plan to Modernize Canada’s Competition Regime (April 2002) (Chair: Walt Lastewka). Canada. Parliament. Senate. Proceedings of the Standing Senate Committee in Banking, Trade and Commerce, Evidence , 30th Parl., 1st Sess., Issue No. 61 (November 19, 1975). Competition Bureau Canada.

Competition Bureau statement on the application of the Competition Act to no-poaching, wage-fixing and other buy-side agreements , Gatineau: Competition Bureau, November 27, 2020, online: < https://www.canada.ca/en/competition- bureau/news/2020/11/competition-bureau-statement-on-the-application-of-the-competition-act-to-no-poaching-wage-fixing-and-other- buy-side-agreements.html >. Competition Bureau Canada. Competitor Collaboration Guidelines , Ottawa: Her Majesty the Queen in Right of Canada, May 6, 2021. Consumer and Corporate Affairs.

Proposals for a New Competition Policy for Canada , Ottawa: Consumer and Corporate Affairs, November 1973. Driedger, Elmer A. Construction of Statutes , 2nd ed. Toronto: Butterworths, 1983. Government of Canada. Compete to Win: Final Report – June 2008 , Ottawa: Public Works and Government Services Canada, 2008. MOTION TO STRIKE brought by certain of the defendants and MOTION TO AMEND brought by the representative plaintiff in a proposed class proceeding involving hockey leagues and the Competition Act . Motion to strike granted; motion to amend dismissed.

APPEARANCES Felix-Antoine Michaud and Maxime Saint-Onge for representative plaintiff. Eric C. Lefebvre , Francesca Taddeo and Erika Woolgar for defendants. SOLICITORS OF RECORD Trivium Avocats Inc , Brossard, for representative plaintiff. Norton Rose Fulbright Canada LLP , Montréal, for defendants. The following are the reasons for order and order rendered in English by Crampton C.J.: Table of Contents I. Introduction II. The Parties III. Issues IV. Relevant Rules A. The Motion to Amend B. The Motion to Strike V. Analysis – Motion to Amend A. Applicable legal principles B. Assessment

(1) Is it plain and obvious, assuming the facts pleaded to be true, that the Amended Statement of Claim discloses no reasonable cause of action? (

a) Failure to disclose a reasonable cause of action (

i) Insufficient material facts and particulars (ii) Failure to plead a reasonable cause of action under

section 45 of the Act (iii) Failure to plead a reasonable cause of action under

section 48 of the Act (iv) Other claims are not within the scope of

section 36 (

b) Does the Amended Statement of Claim constitute an abuse of the Court’s process? (

i) The Ontario proceeding

(ii) The Alberta proceeding (iii) The Quebec proceeding (iv) Analysis (

c) Is the Amended Statement of Claim scandalous, frivolous or vexatious? (

d) Conclusion: It is plain and obvious that the Amended Statement of Claim discloses no reasonable cause of action

(2) Would the proposed amendments assist the Court to determine the real questions in controversy between the parties?

(3) Would the proposed amendments serve the interests of justice?

(4) Would the proposed amendments result in an injustice to the other party that is not capable of being compensated by an award of costs? C. Conclusion VI. Analysis – Motion to Strike ORDER in T-1080-20 APPENDIX 1 I. Introduction [Back to table of contents ] [ 1 ] These reasons concern two Motions in writing in this proposed class proceeding: (

i) a Motion to Strike, brought by certain of the defendants, and (ii) a Motion to Amend, brought by the representative plaintiff, Mr. Kobe Mohr. I will deal first with the latter motion. [ 2 ] In his Motion, Mr. Mohr seeks leave to amend a Statement of Claim filed on behalf of all major junior hockey players who signed a standard player agreement (SPA) that is at the heart of one or more of the conspiracies alleged to have been entered into between the defendants (the Class Members). [ 3 ] In the Statement of Claim, Mr.

Mohr alleges that the defendants entered into a single conspiracy contrary to subsection 48(1) of the Competition Act , R.S.C., 1985, c. C-34 (the Act ). In particular, he claims that the defendants conspired to limit unreasonably the Class Members’ opportunity to negotiate and play with teams in the National Hockey League (NHL), the American Hockey League Inc. (AHL) and the ECHL Inc. (also known as the East Coast Hockey League) (ECHL). He further claims that the defendants conspired to impose unreasonable terms and conditions upon the Class Members.

These include the imposition of “nominal wages” and “the loss of rights to market their image, sponsorship and endorsement opportunities”. Accordingly, Mr. Mohr seeks damages under paragraph 36(1) (

a) of the Act for losses suffered as a result of the alleged conspiracy. He estimates such losses to be approximately $825 million. [ 4 ] This Motion was brought after the Canadian defendant leagues, their umbrella organization (the Canadian Hockey League (CHL)) and Hockey Canada advised of their intention to bring a Motion to Strike the Statement of Claim. Those defendants explained that their Motion to Strike would maintain that it is plain and obvious that

section 48 of the Act cannot apply to them because it applies only to intra-league agreements and arrangements between or among “teams and clubs”, including their directors, officers or employees. They added that the Statement of Claim cannot be cured by amending it to claim damages suffered as a result of an agreement contemplated by the general conspiracy provisions in

section 45 of the Act . [ 5 ] In the Amended Statement of Claim, Mr. Mohr proposes to add 148 new defendants, namely, the individual teams of the three Canadian defendant leagues and the three United States-based defendant leagues. He also refers to multiple alleged illegal agreements within the hockey industry, rather than to a single alleged conspiracy. In his Notice of Motion, Mr.

Mohr refers to these as being “both intra- and inter-league … [conspiracies that] … may perhaps be governed by one or the other of sections 45 and 48 ”. [ 6 ] The Amended Statement of Claim also provides additional information regarding junior players’ remuneration, the restrictions to which they are subject, the benefits obtained by their clubs and leagues, the position of the various leagues in the industry hierarchy, the junior drafts, the NHL entry draft, the more favourable situation that allegedly exists for junior players from Europe and certain parts of the United States hockey system, the relevant product and the relevant markets.

In addition, the Amended Statement of Claim briefly addresses some of the impugned agreements. [ 7 ] Finally, the Amended Statement of Claim includes new requests for declaratory and injunctive relief, as well as “remedies justified by” certain non-criminal provisions situated in

Part VIII [ sections 75 –107] of the Act . [ 8 ] For the reasons set forth in

part V of these reasons below, the Motion to Amend will be dismissed. For the reasons provided in

part VI below, the Motion to Strike the Statement of Claim will be granted. II. The Parties [Back to table of contents ] [ 9 ] The representative plaintiff, Kobe Mohr, is a hockey player who played for a club in the Western Hockey League between 2015 and 2020. [ 10 ] The CHL is an entity that organizes Canada’s three “major junior” hockey leagues, namely, the Québec Major Junior Hockey League (QMJHL), the Ontario Hockey League (OHL), and the Western Hockey League (WHL). The QMJHL consists of 18 clubs in Quebec and the Maritime provinces. The OHL consists of 20 clubs in Ontario and the United States. The WHL consists of 22 clubs in Western Canada and the United States.

[ 11 ] Hockey Canada is the national governing body for ice hockey in Canada. It is also the Canadian member of the International Ice Hockey Federation. [ 12 ] The NHL is the top-tier professional hockey league in North America, consisting of 32 teams in the United States and Canada. [ 13 ] The AHL is the second-tier professional hockey league in North America, consisting of 31 teams in the United States and Canada. [ 14 ] The ECHL is the third-tier professional hockey league in North America, consisting of 26 teams in the United States and Canada. III.

Issues [Back to table of contents ] [ 15 ] The plaintiff’s Motion to Amend raises a single issue, namely, whether Mr. Mohr has met the test for obtaining leave to amend the Statement of Claim. [ 16 ] The Motion to Strike brought by certain of the defendants also raises a single issue, namely, whether it is plain and obvious that the Statement of Claim discloses no reasonable cause of action or is otherwise an abuse of process. IV. Relevant Rules [Back to table of contents ] A. The Motion to Amend [ 17 ] The Motion to Amend was brought pursuant to rule 75 of the Federal Courts Rules , SOR/98-106 (the Rules ).

Subsection 75(1) contemplates that the Court may, on motion, grant leave to a party to amend a document on such terms as will protect the rights of all parties. [ 18 ] Rule 200 provides an exception to rule 75 with respect to amendments to pleadings. However, that exception does not apply to a pleading that is subject to a motion to strike: Verma v.

Canada , 2006 FC 1353 , at paragraph 14 . [ 19 ] The defendants CHL, QMJHL, OHL, WHL and Hockey Canada (collectively, the Responding Defendants on the Motion to Amend, and the Moving Defendants on the Motion to Strike) filed their Motion to Strike on December 14, 2020, before Mr. Mohr filed this Motion to Amend. Accordingly, the exception set forth in rule 200 does not apply, and leave to amend is required. [ 20 ] For the reasons explained immediately below, rule 221 is relevant to a consideration of a motion to amend a pleading. That provision provides as follows: Motion to strike 221

(1) On motion, the Court may, at any time, order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on the ground that it (

a) discloses no reasonable cause of action or defence, as the case may be, (

b) is immaterial or redundant, (

c) is scandalous, frivolous or vexatious, (

d) may prejudice or delay the fair trial of the action, (

e) constitutes a departure from a previous pleading, or (

f) is otherwise an abuse of the process of the Court, and may order the action be dismissed or judgment entered accordingly. [ 21 ] In considering rule 221, it is important to keep in mind rule 174, which provides as follows: Material facts 174 Every pleading shall contain a concise statement of the material facts on which the party relies, but shall not include evidence by which those facts are to be proved. [ 22 ] Finally, rule 181 requires every pleading to contain particulars of every allegation contained therein. B.

The Motion to Strike [Back to table of contents ] [ 23 ] Rule 221 authorizes the Court, on motion, to order that a pleading, or anything contained therein, be struck out, with or without leave to amend, on numerous grounds. These include that the pleading discloses no reasonable cause of action or is otherwise an abuse of the process of the Court. V. Analysis – Motion to Amend [Back to table of contents ] A. Applicable legal principles [ 24 ] The principles to be applied on a Motion to Amend a pleading were recently restated as follows:

The general rule is that an amendment should be allowed at any stage of an action for the purpose of determining the real questions incontroversy between the parties, provided, notably, that the allowance would not result in an injustice to the other party not capable ofbeing compensated by an award of costs and that it would serve the interests of justice: Canderel Ltd. v. Canada, (FCA), [1994] 1 F.C. 3, 157 N.R. 380 (C.A.); Enercorp at para. 19. However … the proposed amendment must have a reasonableprospect of success: Teva Canada Limited v.

Gilead Sciences Inc., 2016 FCA 176, 140 C.P.R. (4th) 309 at paras. 29-32 (Teva). Anotherway to put this is that a proposed amendment will be refused if it is plain and obvious, assuming the facts pleaded to be true, that thepleading discloses no reasonable cause of action: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 at para. 17(Imperial Tobacco). In deciding whether an amendment has a reasonable prospect of success, its chances of success must be examined in the context of thelaw and the litigation process, and a realistic view must be taken: Teva at para. 30; Imperial Tobacco at para. 25.

McCain Foods Limited v. J.R. Simplot Company, 2021 FCA 4 [at paragraphs 20–21]. [25] In Teva, above [Teva Canada Limited v. Gilead Sciences Inc., 2016 FCA 176, 140 C.P.R. (4th) 309], the requirement that theproposed amendments have a reasonable prospect of success was described as “a threshold issue”, in the sense that it ought to beaddressed before going further and investigating other matters: Teva, above, at paragraph 31.

The Court added that “it makes no sensefor a court to allow an amendment that is doomed to fail” and that if the amended pleadings “do not have some reasonable prospect ofsuccess, allowing them into the litigation does nothing other than to complicate and protract it needlessly and pointlessly”: Teva, above,at paragraph 28. [26] Based on the foregoing, in determining whether to grant leave to amend a pleading, the Court should consider the following: 1. Is it plain and obvious, assuming the facts pleaded to be true, that the amended pleading discloses no reasonable cause of action? 2.

Would the proposed amendments assist the Court to determine the real questions in controversy between the parties? 3. Would the proposed amendments serve the interests of justice? 4. Would the proposed amendments result in an injustice to the other party that is not capable of being compensated by an award ofcosts? B. Assessment [Back to table of contents]

(1) Is it plain and obvious, assuming the facts pleaded to be true, that the amended statement of claim discloses no reasonable cause ofaction? [27] The Responding Defendants[1] submit that the Amended Statement of Claim would not survive a motion to strike under rule221 for three distinct reasons: (

i) it does not disclose any reasonable cause of action, (ii) it constitutes an abuse of the Court’s process,and (iii) it is scandalous, frivolous and vexatious. For the reasons set forth below, I agree with the first two of those submissions.Consequently, I consider it unnecessary to address the third. (

a) Failure to disclose a reasonable cause of action [Back to table of contents] (

i) Insufficient material facts and particulars [28] The Responding Defendants assert that the Amended Statement of Claim does not provide sufficient material facts andparticulars, as required by rules 174 and 181. Specifically, they maintain that whereas the Statement of Claim alleged a single conspiracycontrary to

section 48 of the Act, the Amended Statement of Claim refers to multiple alleged conspiracies, without providing sufficientmaterial facts and particulars to understand the case to be met by any given defendant. I agree. [29] The Amended Statement of Claim refers to what appear to be six separate conspiracies, or groups of agreements that eachconstitute a conspiracy: 1. An agreement between the NHL and the CHL. This agreement, which is addressed at paragraphs 3.1, 47.1 and 47.2, is described ashaving defined “the modalities of a partnership to their mutual interest, but to the detriment of Canadian CHL players”.

However, theparticulars of those modalities and their impact on Canadian hockey players have not been provided. The Amended Statement of Claimsimply makes a vague reference to “various activities including the enforcement of restrictive rules alleged here to be illegal andunreasonable restraints of trade”. Likewise, no material facts or explanation are provided to indicate how this agreement is believed to, orcould, contravene either

section 45 or

section 48 of the Act. 2. An unspecified number of agreements between the NHL, NHL clubs and the CHL, which are mentioned at paragraph 47.3. It isalleged that pursuant to these agreements, NHL clubs have agreed not to sign players under the age of 18 playing in the CHL, or to assigna player who has an NHL/AHL contract under the age of 20 to their AHL/ECHL affiliate if that player also has a contract in the CHL.However, once again, no other information is provided regarding those agreements (including whether two or more clubs are parties toany of them) or the basis upon which they are asserted to, or could, contravene

section 45 or 48 of the Act. 3. An unspecified number of alleged agreements between NHL clubs and their AHL/ECHL affiliate clubs, pursuant to which the partiesare said to have agreed not to sign any North American players who play or have played for a CHL club, until the end of his eligibility inthe CHL. Apart from this bare assertion, which is made at paragraphs 47.6 and 47.18, no further information has been provided. In theabsence of any further material facts or particulars, it is not apparent how these alleged agreements are considered to contravene section45 or 48. 4.

One or more agreements among the CHL, the WHL, the OHL and the QMJHL, pursuant to which they are alleged to have agreed to

standardize player contracts that, among other things “impose very low ceilings for the remuneration of players, and will deprive those players of any opportunity to market [their] time, skills or talents or even their own image or name for the purpose of endorsement or sponsorship”. Those agreements are referenced at paragraphs 3.2, 13, 14 and 47.8. As with the alleged agreements discussed above, the Amended Statement of Claim does not describe how these alleged agreement(

s) among the CHL and its three member leagues to impose SPAs meet(

s) the requirements of sections 45 and 48 of the Act . Instead, the Amended Statement of Claim simply repeats the language of paragraphs 48(1) (

a) and (

b) by alleging that the SPAs limit players’ opportunities to participate in a professional sport, impose unreasonable terms and conditions (including unreasonable compensation and restrictions on players’ abilities to market their own image), and limit their opportunity to negotiate with the team of their choice. 5. One or more agreements among the Responding Defendants and between them and “the NHL and its affiliates” which, among other things, prevent Canadian hockey players from playing in other leagues or with other clubs.

These agreements, which are mentioned at paragraph 47.8, are alleged to “unreasonably limit the opportunities of Class Members to play professional hockey” and to “offer their services elsewhere, mostly in the AHL/ECHL, for better remuneration”, until the end of their CHL eligibility. However, once again, this simply paraphrases the language in paragraphs 48(1) (

a) and (

b) of the Act , respectively, without providing any other material facts or particulars. In addition, no explanation is provided as to why those limitations are considered to be unreasonable, within the meaning of

section 48 , and having regard to the matters identified in subsection 48(2) of the Act . 6. An agreement between the CHL, Hockey Canada and one or more unnamed entities in the United States which deprives Class Members of the benefit of competition for their services. This agreement, which is mentioned at paragraph 8.2, is described as being “the amendment to the Hockey Transfer Agreement among the USA, CHL and [Hockey Canada] to ensure that Class Members cannot seek scholarships in exchange for playing within the NCAA.” No further information regarding that alleged agreement is provided.

Indeed, no allegations are made that the parties to this agreement are “competitors”, as contemplated by

section 45 of the Act , or that the agreement contravenes

section 48 in any particular way. [ 30 ] The absence of the material facts and particulars described above leaves the Amended Statement of Claim without a sufficient foundation to support the amended allegations that have been made. This provides a sufficient basis for concluding that it is plain and obvious that the Amended Statement of Claim discloses no reasonable cause of action: Pelletier v.

Canada , 2020 FC 1019 [ Pelletier FC ], at paragraphs 46–47 . [ 31 ] Notwithstanding this conclusion, I will proceed to address certain of the other submissions made by the Responding Defendants in support of their position that Mr. Mohr should not be granted leave to file the Amended Statement of Claim. (ii) Failure to plead a reasonable cause of action under

section 45 of the Act [Back to table of contents ] [ 32 ] The Responding Defendants assert the plaintiff has not pleaded a reasonable cause of action under

section 45 of the Act because that provision applies only to certain agreements between “competitors” relating to the “production or supply” of a product. They add that

section 45 does not apply to agreements between buyers pertaining to the purchase of a service. [ 33 ] I agree, although I expressly limit my agreement with the latter assertion to the proposition that

section 45 does not apply to the types of agreements that are alleged in the Amended Statement of Claim. Among other things, those agreements are not the types of unambiguously harmful “hard core cartel” agreements, also known as “naked” cartel agreements, that are contemplated by

section 45 . This is because they cover a range of matters that have nothing to do with the matters described in paragraphs 45(1) (a)–(c): see for example, paragraphs 66–67 below. [ 34 ] Subsection 45(1) states as follows: Conspiracies, agreements or arrangements between competitors 45

(1) Every person commits an offence who, with a competitor of that person with respect to a product, conspires, agrees or arranges (

a) to fix, maintain, increase or control the price for the supply of the product; (

b) to allocate sales, territories, customers or markets for the production or supply of the product; or (

c) to fix, maintain, control, prevent, lessen or eliminate the production or supply of the product. [ 35 ] As is apparent from the plain language of subsection 45(1) , it applies only to “competitors” who enter into a conspiracy, agreement or arrangement concerning either the “supply” or the “production or supply” of the product in respect of which they compete. These elements of subsection 45(1) pose an insurmountable hurdle for the plaintiff.

The existing defendants and many of the proposed defendants are not “competitors … with respect to a product” . [Back to table of contents ] [ 36 ] With the exception of the clubs within the AHL and the ECHL (discussed at paragraph 32.1 of the Amended Statement of Claim) and possibly the clubs within the NHL (mentioned at paragraph 31.2), none of the other existing or proposed defendants are alleged to have been a party to any conspiracy, agreement or arrangement with a “competitor … with respect to a product”.

The only passage in the Amended Statement of Claim that may suggest otherwise is the following sentence, which is difficult to understand: “31.2 Defendant clubs and leagues are competitors in the NHL, for Championships, the best players available and market shares.” [ 37 ] It is plain and obvious that the NHL, the CHL and Hockey Canada are not “competitors” of any other party to any of the alleged agreements, “with respect to a product”. [ 38 ] Moreover, given that it is common ground between the parties that the NHL, the AHL and the ECHL are the first, second and third-tier professional hockey leagues in North America, those leagues are not “competitors” of each other, at least with respect to the

product at issue in these proceedings. I will discuss that product in the next two paragraphs below. Likewise, the clubs within one ofthose leagues are not “competitors” of any club in the either of the other two leagues. The same is true for the QMJHL, the OHL and theWHL. Those leagues are not “competitors” of each other, and the clubs within any one of those leagues are not “competitors” of theclubs in either of the other two leagues. I will address further below the competition that exists between clubs within each of those threeleagues.

The remaining proposed defendants are not parties to an alleged conspiracy, agreement or arrangement with respect to the “productionor supply” of the relevant product. [Back to table of contents] [39] The plaintiff alleges that the clubs within the AHL and the ECHL are “competitors in the hockey entertainment business.”However, those clubs are not competitors in the “production or supply” of the only relevant product in respect of which one or moreagreements described in subsection 45(1) have been alleged. [40] The “product” at issue in this proceeding consists of the services of the Class Members, namely members of “a class consistingof the plaintiff and all individuals residing in Canada, who were Canadian resident or Canadian citizens and who have signed a [SPA]with a club in one of the three leagues comprising the CHL (the QMJHL, OHL and WHL)” during the relevant period: AmendedStatement of Claim, at paragraph 24. [41] It is trite law that “the words of a statute must be read ‘in their entire context and in their grammatical and ordinary senseharmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament’”: Canada (Minister of Citizenship andImmigration) v.

Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at paragraph 117, quoting Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 S.C.R. 27, (1998), 36 O.R. (3d) 418 (Rizzo), at paragraph 21; and Bell ExpressVu Limited Partnership v. Rex,2002 SCC 42, [2002] 2 S.C.R. 559, at paragraph 26, both quoting E. Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths,1983), at page 87. [42] On their face, the three offences proscribed in subsection 45(1) of the Act apply solely to either the “supply” or the “productionor supply” of the same product in respect of which the alleged conspirators are competitors.

This is readily apparent from the use of thedefinite

article “the” before the word “product” in each of paragraphs 45(1)(a)–(c). [43] By their express terms, those provisions do not apply to the purchase or other acquisition of a product, although I do not excludethe possibility that paragraph 45(1)(

c) may apply to a supplier boycott or other “hard core cartel” agreement among competitors in adownstream market to fix, maintain, control, prevent, lessen or eliminate the production or supply of the product in respect of which theycompete.

The agreements alleged in the Amended Statement of Claim are plainly not of this type. [44] Pursuant to subsection 2(1) of the Act, “supply” means, “in relation to a service, sell, rent or otherwise provide a service or offerso to provide a service” (emphasis added). [45] As recognized at paragraph 2.7 of the Amended Statement of Claim, hockey players “offer” their services to teams, who thenacquire those services. [46] Given that it is the players, rather than the clubs within the AHL and ECHL, who “offer” and then “provide” the services at issuein this proceeding, it is readily apparent from the ordinary meaning of the words in subsection 45(1) that the clubs within those leaguesare not competitors in the production or supply of those services, as contemplated by the Act.

Based on the legislative history and thescheme of the Act discussed below, it is also readily apparent that the agreements to which the clubs in the AHL and the ECHL arealleged to be a party are not agreements with respect to the production or supply of those services, as contemplated by subsection 45(1). [47] To the extent that the words in subsection 45(1) might somehow be said to permit a broader

interpretation that would bringwithin its scope the sorts of agreements alleged in the Amended Statement of Claim, the penal nature of that provision would entitle thedefendants to the benefit of any ambiguity: R. v. McLaughlin, (SCC), [1980] 2 S.C.R. 331, at page 335, (1980), 113D.L.R. (3d) 386; R. v. McIntosh, (SCC), [1995] 1 S.C.R. 686, at pages 702 and 705, (1995), 178 N.R. 161. [48] I will now turn to address the individual clubs within the QMJHL, the OHL and the WHL.

As recognized at the end of paragraph38 above, clubs within each of those leagues evidently compete—in the sense of being rivals to win hockey games, championships andperhaps even the services of players. However, it has not been alleged that they are “competitors” in the “production or supply” of theservices of the Class Members. Indeed, it is plain and obvious that they are not in fact competitors in this capacity. They may wellcompete to sign young players to SPAs or other contracts. But in this capacity they are competitors in the acquisition of the hockey-related services of those players.

For the same reasons discussed at paragraphs 39–47 above, those clubs are not competitors in the“production or supply” of the services at issue in this proceeding. [49] This

interpretation is supported by the legislative history of subsection 45(1). That history also supports the RespondingDefendants’ position that the agreements to which they are alleged to be parties are not agreements with respect to the production orsupply or supply of services, as contemplated by subsection 45(1). [50] Prior to entry into force of the current wording of that provision in March 2010, paragraph 45(1)(

c) applied to any agreementbetween competitors that prevented or lessened competition unduly “in the production, manufacture, purchase, barter, sale, storage,rental, transportation or supply of a product, or in the price of insurance on persons or property” (emphasis added). (The full text ofsubsection 45(1), as it existed prior to March 2010, is reproduced in Appendix 1 to these reasons.) [51] The fact that the word “purchase” was eliminated from the text of subsection 45(1) is a strong indication of Parliament’sintention to exclude from the scope of that provision agreements and other arrangements that, in pith and substance, pertain to thepurchase or other acquisition of a product.

That amendment was made following a long period of consultation and assessment. [52] In 2002, the House of Commons Standing Committee on Industry, Science and Technology issued a report containing a numberof recommendations to amend the Act. Recommendation 12 of that report stated as follows:

12. That the Government of Canada amend the Competition Act to create a two-track approach for agreements between competitors. The first track would retain the conspiracy provision (

section 45 ) for agreements that are strictly devised to restrict competition directly through raising prices or indirectly through output restrictions or market sharing, such as customer or territorial assignments, as well as both group customer or supplier boycotts. The second track would deal with any other type of agreement between competitors in which restrictions on competition are ancillary to the agreement’s main or broader purpose. [Bold in original.] House of Commons, Report of the Standing Committee on Industry, Science and Technology.

A Plan to Modernize Canada’s Competition Regime (tabled April 23, 2002, adopted April 9, 2002), at page xvi. [ 53 ] Later in 2002, the Government of Canada broadly endorsed the foregoing recommendation when it stated the following: The Government supports the need to amend

section 45 and indeed believes that such amendments are essential for effective enforcement of the provision. The Government further endorses the basic principle of a two-track approach for conspiracies under which hard core cartel behaviour, such as agreements to fix prices, allocate markets or restrict supplies, would be criminal offences without a competition test or an efficiency defence.

Other types of agreements between competitors would be subject to a civil review.… Government Response to the Report of the House of Commons Standing Committee on Industry, Science and Technology, A Plan to Modernize Canada’s Competition Regime (October 1, 2002), at page 3. [ 54 ] In 2008, a panel appointed by the federal Government issued a report on this country’s competition policy that included various recommendations to amend the Act .

With respect to the criminal provisions of the Act , the panel observed: The Panel is of the view that the criminal law, with its attendant sanctions including fines and imprisonment, should be reserved for conduct that is unambiguously harmful to competition and where clear standards can be applied that are understandable to the business community. … At the same time, criminal law is too blunt an instrument to deal with agreements between competitors that do not fall into the “hard core” cartel category , such as restrictions on advertising or strategic alliances, but that may harm competition nonetheless.

A more sophisticated economic approach to address the latter has been advocated by the Bureau and other experts to deal with this category of agreements between competitors.

Government of Canada, Compete to Win: Final Report – June 2008 , at pages 58–59 (Compete to Win) (emphasis added). [ 55 ] Having regard to the foregoing, the panel recommended that the government “repeal the existing conspiracy provisions and replace them with [(i)] a per se criminal offence to address hardcore cartels and [(ii)] a civil provision to deal with other types of agreements between competitors that have anti-competitive effects”: Compete to Win, Recommendation 14(d), at page 127 (footnote omitted). [ 56 ] The following year, Bill C-10, a budget implementation bill that included amendments to

section 45 and several other provisions of the Act , was submitted to Parliament. The wording of the proposed amendments to

section 45 and a new civil provision in

section 90.1 addressing non-hard core cartel agreements among competitors was enacted without any change and entered into force in March 2010 [ Budget Implementation Act, 2009 , S.C. 2009, c. 2, sections 410 , 429 ]. [ 57 ] This legislative history supports the Responding Defendants’ position that

section 45 does not apply to the types of purchasing agreements to which they or the other defendants are alleged to be parties: see also Dow Chemical Canada ULC v. NOVA Chemicals Corporation , 2018 ABQB 482 , at paragraph 1357 . In brief, in addition to the elimination of the word “purchase” as part of the amendments in 2010, it is clear that Parliament intended to limit the application of

section 45 to hard core cartel agreements, namely, agreements that are unambiguously harmful to competition. These are also known as “naked” cartel agreements. Other agreements between competitors, including those that include ancillary provisions that can adversely impact the production or supply of a product, were intended to be reviewed under the new non-criminal provision in

section 90.1 of the Act , which is reproduced in Appendix 1 to these reasons. [ 58 ] Another aspect of the amended statutory scheme that supports the foregoing

interpretation is the new provision in subsection 45(4), which states as follows: 45 … Defence

(4) No person shall be convicted of an offence under subsection (1) in respect of a conspiracy, agreement or arrangement that would otherwise contravene that subsection if (

a) that person establishes, on a balance of probabilities, that (

i) it is ancillary to a broader or separate agreement or arrangement that includes the same parties, and (ii) it is directly related to, and reasonably necessary for giving effect to, the objective of that broader or separate agreement or arrangement; and (

b) the broader or separate agreement or arrangement, considered alone, does not contravene that subsection.

[ 59 ] In brief, taken together, the statutory scheme contemplated by

section 2, subsection 45(1), subsection 45(4) and

section 90.1 support the position of the Responding Defendants that the types of agreements to which they and the other defendants are alleged to have been a party do not fall within the purview of subsection 45(1) . [ 60 ] I pause to observe that the Competition Bureau shares this

interpretation of subsection 45 and the legislative history discussed above: see Competition Bureau, Competitor Collaboration Guidelines (May 6, 2021), at

section 2.4.1 and Example 9; and Competition Bureau, Competition Bureau statement on the application of the Competition Act to no-poaching, wage-fixing and other buy-side agreements (November 27, 2020), available online: < https://www.canada.ca/en/competition-bureau/news/2020/11/competition-bureau- statement-on-the-application-of-the-competition-act-to-no-poaching-wage-fixing-and-other-buy-side-agreements.html > . [ 61 ] I acknowledge that subsection 48(3), discussed below, states that “section 45 applies and this

section does not apply to all other agreements, arrangements and provisions thereof between or among [the] teams, clubs and persons” described in that provision. However, the language of subsection 48(3), which predates the amendments to

section 45 discussed above, must be read together with those amendments. Pursuant to the plain terms of those amendments, subsection 45(1) now only applies to three narrowly defined types of agreement, whether the agreement is among teams and clubs as members of the same league, or otherwise. For the reasons discussed above, the agreements alleged to have been entered into among the current and proposed defendants are not one of those types of agreement. [ 62 ] In

summary, based on the ordinary meaning of the words in subsection 45(1) , the legislative history of that provision, and the statutory scheme, it is plain and obvious that the plaintiff has not pleaded a reasonable cause of action in relation to

section 45 of the Act . In other words, it is clear that the plaintiff has not pleaded a reasonable cause of action against the existing and proposed defendants under

section 45 , in relation to the production and supply of the services that are at issue in this proceeding. (iii) Failure to plead a reasonable cause of action under

section 48 of the Act [Back to table of contents ] [ 63 ] In their Motion to Strike, the Responding Defendants alleged that no viable cause of action has been pleaded in the plaintiff’s Statement of Claim, because it does not allege any “intra-league” agreement or arrangement described in subsection 48(3). In support of this position, they maintain that the opening words of subsection 48(3) (“This

section applies”) limits the purview of subsection 48(1) to such intra-league agreements. [ 64 ]

Section 48 states as follows: Conspiracy relating to professional sport 48

(1) Every one who conspires, combines, agrees or arranges with another person (

a) to limit unreasonably the opportunities for any other person to participate, as a player or competitor, in professional sport or to impose unreasonable terms or conditions on those persons who so participate, or (

b) to limit unreasonably the opportunity for any other person to negotiate with and, if agreement is reached, to play for the team or club of his choice in a professional league is guilty of an indictable offence and liable on conviction to a fine in the discretion of the court or to imprisonment for a term not exceeding five years or to both. Matters to be considered

(2) In determining whether or not an agreement or arrangement contravenes subsection (1), the court before which the contravention is alleged shall have regard to (

a) whether the sport in relation to which the contravention is alleged is organized on an international basis and, if so, whether any limitations, terms or conditions alleged should, for that reason, be accepted in Canada; and (

b) the desirability of maintaining a reasonable balance among the teams or clubs participating in the same league. Application

(3) This

section applies, and

section 45 does not apply, to agreements and arrangements and to provisions of agreements and arrangements between or among teams and clubs engaged in professional sport as members of the same league and between or among directors, officers or employees of those teams and clubs where the agreements, arrangements and provisions relate exclusively to matters described in subsection (1) or to the granting and operation of franchises in the league, and

section 45 applies and this

section does not apply to all other agreements, arrangements and provisions thereof between or among those teams, clubs and persons. [ 65 ] In response to the Motion to Strike, the plaintiff proposes to add, on this Motion to Amend, 148 specific clubs as defendants, and to allege several additional conspiracies, in his Amended Statement of Claim. [2] [ 66 ] For example, at paragraph 47.19, it is alleged that “NHL, AHL & ECHL clubs have conspired among themselves to establish rules and adhesion contracts not to sign any CHL Canadian players aged 16 to 20 or have them play AHL or ECHL hockey”.

In addition, it is alleged at paragraph 47.24 that “rules established by CHL clubs, CHL and their respective leagues, violate section 48(1)(b)”. Similarly, at paragraph 47.26, it is alleged that “WHL, OHL & QMJHL Clubs, under the CHL and Hockey Canada umbrella, have established unreasonable conditions, mainly to reduce or to erase any reasonable prospect of a CHL player signing a contract elsewhere or even exploring the opportunity of offering his skills and talents elsewhere”.

To the extent that these passages of the Amended Statement of Claim are alleging agreements among clubs “as members of the same league”, those agreements are intra-league agreements that are within the potential scope of

section 48 .

[67] In their opposition to the plaintiff’s Motion to Amend, the Responding Defendants do not squarely address this aspect of theAmended Statement of Claim.

Instead, they maintain that “[t]o the extent the plaintiff alleges a series of separate, parallel Section48 conspiracies between entirely different actors with no unifying ‘collusion’ (which is not the theory of the plaintiff’s claim), these arenot properly brought as a single action, and would otherwise render this action completely unmanageable”. [68] It is unnecessary to address that particular submission by the Responding Defendants, because it has not been alleged, nor is itapparent, that any of the alleged intra-league agreements “relate exclusively to the matters described in subsection (1)”, as set forth insubsection 48(3) (emphasis added).

Indeed, the Amended Statement of Claim describes a range of other matters that are covered by thealleged agreements.

These include the following: • The alleged agreement between the NHL and the CHL apparently provides for several substantial payments by the NHL to the CHLand defendants, in exchange for “various activities including the enforcement of the restrictive rules alleged here to be illegal andunreasonable restraints of trade” (emphasis added): Amended Statement of Claim, at paragraph 3.1. • That same agreement is also described as encompassing “the modalities of a partnership”: Amended Statement of Claim, atparagraph 47.2 • The SPAs that are required to be signed by players in the QMJHL, the OHL and the WHL provide for benefits that include theprovision of hockey equipment, reimbursement for travel and “other expenditures”, as well as “scholarship funds”, if the player intendsto go to a college or university after his major junior league career: Amended Statement of Claim, at paragraph 28.4. • The alleged agreements among and between NHL, AHL, ECHL and CHL clubs include provisions relating to the provision offinancial support and financial compensation from the NHL, the AHL and the ECHL to CHL Clubs, for the “development” of hockeyplayers: Amended Statement of Claim, at paragraph 47.5. [69] In addition to the foregoing, Class proceedings that have been brought by Mr.

Mohr and others in other courts reveal that thechallenged SPAs cover a broad range of other matters. These include the following: • “Special player benefits”: Berg v. Canadian Hockey League, 2017 ONSC 2608 (Berg 1), at paragraph 52. • Numerous obligations of the players and consequences for non-performance of those obligations: Berg 1, above, at paragraph 53;Walter c.

Quebec Major Junior Hockey League Inc., 2019 QCCS 2334 (Walter – Quebec I), at paragraph 13. • Various terms pertaining to the trading of players to another team: Berg 1, above, at paragraph 54. [70] Having regard to the foregoing, it is plain and obvious that the Amended Statement of Claim does not identify agreements that“relate exclusively to the matters described in subsection (1)” and that are “between or among teams and clubs engaged in professionalsport as members of the same league [or] between or among directors, officers or employees of those teams and clubs”.

Stateddifferently, it is plain and obvious that the Amended Statement of Claim does not disclose a reasonable cause of action under section48 of the Act. [71] The plaintiff maintains that subsection 48(3) does not limit the purview of subsection 48(1) to intra-league conspiracies, asasserted by the Responding Defendants. Instead, the plaintiff asserts that subsection 48(3) simply removes those types of conspiraciesfrom the application of

section 45. The plaintiff adds that what has not been removed from

section 45, namely conspiracies that are notconfined to teams within a single league, remains within the purview of subsection 48(1). The plaintiff underscores that this is clear fromthe use of the term “every one” and the remaining language in subsection 48(1), which is not restricted to intra-league agreements.Pursuant to that

interpretation, anyone who agrees to do the types of things described therein is guilty of a criminal offence, regardless ofwhether the agreement is of a type described in subsection 48(3). The plaintiff insists that if Parliament had wanted to limit theapplication of

section 48 to clubs or their “operatives” operating within the same league, it would not have used the words “every one” insubsection 48(1). In the plaintiff’s view, interpreting

section 48 in the manner advocated by the Responding Defendants would give riseto “an inexplicable exemption” from the Act, for a broad range of conspiracies among professional sports leagues or their operatives. [72] I acknowledge that the language in subsection 48(3) is capable of being interpreted in the manner advanced by the RespondingDefendants as well as in the manner asserted by the plaintiff. However, for the following reasons, I agree with the

interpretationadvanced by the Responding Defendants. [73] To begin, the

interpretation advanced by the Responding Defendants fits more comfortably with the overall scheme of

section 48,because paragraph 48(2)(

b) requires a consideration of “the desirability of maintaining a reasonable balance among the teams or clubsparticipating in the same league.” In other words, the purview of paragraph 48(2)(

b) is co-extensive with the purview of subsection 48(1)as interpreted by the Responding Defendants. By contrast, the

interpretation advanced by the plaintiff would result in a situation in whichthe purview of paragraph 48(2)(

b) would be much narrower than the purview of subsection 48(1). [74] In addition, the

interpretation advanced by the plaintiff would result in an absurd and arbitrary outcome. In brief, someagreements and arrangements relating to professional sport would be subject to the much more severe sanctions in

section 45, whileothers, including those with potentially more severe adverse impacts on competition, would be exposed solely to the lesser sanctions insection 48. Specifically, certain agreements between the teams and clubs (namely, those that do not relate exclusively to the mattersdescribed in subsection 48(3)) would be subject to

section 45. However, pursuant to the principle of statutory construction generaliaspecialibus non derogant, whereby specific provisions prevail over general provisions, inter-league and other conspiracies involvingprofessional sport that the plaintiff asserts are within the purview of subsection 48(1) would not be subject to

section 45: Perron-Malenfant v. Malenfant (Trustee of), (SCC), [1999] 3 S.C.R. 375, (1999), 177 D.L.R. (4th) 257, at paragraph 42. In myview, this would be absurd and arbitrary. [75] An

interpretation that does not produce this result, that fits more comfortably with the statutory scheme and that is moreconsistent with the legislative history is to be preferred: Ontario v. Canadian Pacific Ltd., (SCC), [1995] 2 S.C.R.

1031, (1995), 125 D.L.R. (4th) 385, at paragraph 65; Rizzo, above, at paragraph 21. [76] The legislative history supports the narrower

interpretation of

section 48 advanced by the Responding Defendants. That provisioncame into force in 1976 as

section 32.3 of the Combines Investigation Act [R.S.C. 1970, c. C-23], in the same form as it exists today: BillC-2,

An Act to amend the Combines Investigation Act and the Bank Act and to repeal

an Act to amend

an Act to amend the CombinesInvestigation Act and the Criminal Code, 1st Sess., 30th Parl., 1974, clause 15 (proclaimed in force, January 1, 1976). It was part of apackage of amendments that were passed as part of Bill C-2, when the Combines Investigation Act was extended to apply to services. [77] A document issued by the Department of Consumer and Corporate Affairs described the purpose of

section 48 as follows: The Bill brings professional and amateur sports within the ambit of the Combines Investigation Act in the same way as other services,with the exception of specified arrangements among member clubs of the same sporting league. The latter arrangements are exemptedfrom

section 32 [now

section 45] relating to conspiracy but are subject to special prohibitions [which] take account of particularrelationships among the clubs of a league. [Emphasis added.] Canada. Consumer and Corporate Affairs. Proposals for a New Competition Policy for Canada, Ottawa: Consumer and CorporateAffairs, November 1973, at page 49. [78] Unfortunately, the “clause-by-clause” analysis provided later in that document does not shed any further light on Parliament’sintent in enacting what is now

section 48. [79] However, the record of the Standing Committee Senate Committee on Banking, Trade and Commerce confirms the intra-leaguefocus of

section 48. This is apparent from the following passages: …. The provision in

section [45] is against agreements or arrangements to lessen competition or restrict or injure trade or commerce. Theprovision would apply with full rigor against those arrangements which are common in professional sports. This is why we have draftedsection [48] as an exempting provision. It recognizes the international nature of professional sports and the need to maintain a reasonablebalance among teams. The section, therefore, moderates the rigor with which the conspiracy provisions would otherwise apply in thisfield…. .... The only thing that this legislation does through

section [48] is to make sure that we are not, through the Combines Investigation Act,preventing professional sports taking place in Canada. Everyone would object to it if, because the Combines Investigation Act includesservices in Canada it would no longer be possible to assemble a group of players into a team playing in a league and make arrangementsand regulations for the playing of hockey, football or other sports. Therefore,

section [48] allows for some agreements or arrangements totake place to permit professional leagues to exist, and that is all it does. [Emphasis added.] Proceedings of the Standing Senate Committee in Banking, Trade and Commerce, Evidence, 30th Parl., 1st Sess., Issue No. 61 (19November 1975), at pages 18–19 (Hon. André Ouellet, Minister of Consumer and Corporate Affairs). [80] I will observe in passing that if Parliament had intended to extend the above-described benefit of

section 48 to inter-leagueagreements, it would have done so, in much the same way as it did in subsection 6(1) of the Act. That provision states: “This Act doesnot apply in respect of agreements or arrangements between or among teams, clubs and leagues pertaining to participation in amateursport.” (The Responding Defendants stated that they are not relying on this provision in this Motion, but intend to rely on it “to resistcertification” and, if necessary, any subsequent stage of this proceeding.) [81] Notwithstanding the foregoing, the plaintiff maintains that the limited jurisprudence under

section 48 supports his

interpretationof that provision. I disagree. [82] The two cases relied upon in this regard are Goulet c. National Hockey League et autres, [1980] R.P.Q. 122, AZ-80122012 (Sup.Ct.) (Goulet) and Reed v. Canadian Football League (1988), (AB KB), 62 Alta. L.R. (2d) 347, [1988] A.J. No. 1236(QL) (Q.B.) (Reed). [83] Goulet concerned a motion for an interlocutory injunction involving a pending NHL draft.

In the course of rejecting the motion,the court simply concluded that it had not been established that the impugned rules had any of the effects described in subsection 48(1).To the contrary, the Court was satisfied that [translation] “the member clubs of the NHL had only one objective, namely, to maintain areasonable balance among the teams through the same type of process common in other North American professional sport leagues: adraft”: Goulet, above, at pages 143–144. This case does not support the plaintiff’s position that

section 48 applies to inter-league andother conspiracies that are not described in subsection 48(3). That specific matter was not addressed by the court. [84] Reed also involved a motion for an injunction, although the remedy sought was to restrain the defendants from enforcing anamendment to the Canadian Football League’s by-laws.

The Court concluded that a serious issue had been raised in respect of whethersection 48 had been violated “by limiting unreasonably the opportunity of [the plaintiff] to participate as a player or competitor in aprofessional sport by imposing unreasonable terms or conditions upon him and limiting his opportunity to negotiate to play for a team orclub of his choice in the C.F.L., a professional football league”: Reed, above, at paragraph 23. The Court did not add anything that mightsupport the

interpretation of

section 48 being advanced by the plaintiff. It simply noted that the issues raised by the plaintiff did not“appear to be frivolous or vexatious”: Reed, above, at paragraph 35. [85] In

summary, I am satisfied that it is plain and obvious that a reasonable cause of action has not been pleaded in respect of section48 in the proposed Amended Statement of Claim. This is because it has not been alleged, nor is it apparent, that any of the alleged intra-league agreements “relate exclusively to the matters described in subsection (1)”, as set forth in subsection 48(3). For the reasons that Ihave provided, I consider that the

interpretation of subsections 48(1) and (3) asserted by the plaintiff is not supported by the ordinarymeaning of the words in subsection 48(3), the scheme of

section 48 as a whole, or the legislative history of that provision. Instead, thosewords, that scheme and the legislative history are all more consistent with the narrower

interpretation advanced by the RespondingDefendants, who maintain that the purview of subsection 48(1) is limited to the intra-league agreements described in subsection 48(3).

To the extent that there is any ambiguity in

section 48 , which is a penal provision, the Responding Defendants are entitled to the benefit of their narrower

interpretation: see paragraph 47 above. [ 86 ] I will simply add in passing that I do not accept the plaintiff’s suggestion that the

interpretation of

section 48 described immediately above would give necessarily rise to “an inexplicable exemption” from the Act for a broad range of conspiracies among professional sports leagues or their “operatives”. To the extent that an impugned agreement was “between persons two or more of whom are competitors”, within the meaning of subsection 90.1, it would be potentially subject to that provision. If no competitors were parties to the agreement, then the agreement would be no different from any other agreement among non-competitors, in the sense that it would not be subject to either

section 45 or

section 90.1 of the Act . (iv) Other claims are not within the scope of

section 36 [Back to table of contents ] [ 87 ] The Statement of Claim in this proceeding seeks remedies under paragraph 36(1) (

a) of the Act . That provision provides as follows: Recovery of damages 36

(1) Any person who has suffered loss or damage as a result of (

a) conduct that is contrary to any provision of

Part VI, or (

b) the failure of any person to comply with an order of the Tribunal or another court under this Act , may, in any court of competent jurisdiction, sue for and recover from the person who engaged in the conduct or failed to comply with the order an amount equal to the loss or damage proved to have been suffered by him, together with any additional amount that the court may allow not exceeding the full cost to him of any investigation in connection with the matter and of proceedings under this section. [ 88 ] As is apparent from the text of this provision, it permits the recovery of loss or damages suffered as a result of (

a) conduct that is contrary to any of the provisions in

Part VI [sections 45–62] of the Act (which establishes various criminal offences), or (

b) the failure of any person to comply with an order of the Competition Tribunal or another court under the Act . The costs associated with investigating the matter and then bringing proceedings under paragraph 36(1)(

a) may also be recovered. There is no mention of injunctive remedies or remedies under the common law doctrine of unlawful restraint of trade. [ 89 ] No allegation has been made in either the Statement of Claim or the Amended Statement of Claim in relation to the failure of any person to comply with an order of the Competition Tribunal or another court under the Act . Accordingly, any potential recovery available to the plaintiff is limited to loss or damage suffered as a result of conduct contemplated by

Part VI of the Act , as well as costs incurred in connection with the investigation of the matter and of court proceedings. The only such conduct alleged by the plaintiff is with respect to sections 45 and 48 of the Act , discussed above. [ 90 ] Notwithstanding the foregoing, the Amended Statement of Claim “pursues remedies justified by” sections 78 , 79 and 90.1 of the Act . Such remedies are not available to the plaintiff under paragraph 36(1) (a).

I note in passing that the plaintiff appeared to recognize this in his reply submissions, when he observed that the “references to sections 79 and 90.1 are made in order to convey the seriousness of those alleged offences and their consequences”. [3] [ 91 ] Likewise, the allegations made in respect of “illegal and unreasonable” restraints of trade, and the determinations sought from the Court in relation thereto, are beyond the sc

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