On September 9, 2016, the Quebec Court of Appeal (“QCCA”) issued its judgment in two gasoline price-fixing conspiracy cases. The cases were the product of the Competition Bureau’s (the “Bureau”) year-long investigation into the fixing of retail gasoline prices in the province of Quebec from April 2005 to May 2006.
The three accused individuals in the cases (Yves Gosselin, Linda Proulx, and Michel Lagrandeur) were charged under the Competition Act’s (the “Act”) former price-fixing provisions for conspiring to fix retail gasoline prices in the cities of Magog and Sherbrooke. All three accused were subsequently convicted at trial. The trial judge arrived at his decision based on the preponderance of evidence adduced during the trial, which included, among other things, hundreds of intercepted telephone conversations, which included statements by co-conspirators.
Two of the three accused, Ms Linda Proulx (“Proulx”) and Mr. Michel Lagrandeur (“Lagrandeur”), owners of gas stations in Magog, later appealed the decision of the trial judge. The appellants took issue with the trial judge’s assessment of the evidence. Both appellants argued that the trial judge erred in his assessment of the circumstantial evidence put before him. In particular, the appellants disagreed with the trial judge’s conclusion that the evidence did not support their conscious parallelism defence, (i.e., that they set their prices independently by observing the prices set by their competitors). They further asserted that, should they have conspired to fix the prices of gasoline sold at the pump, they did not have the intention to adhere to any such conspiracy. The QCCA disagreed with the appellants.
However, Proulx also raised an issue with the trial judge’s application of the co-conspirators’ exception to the hearsay rule. The co-conspirators’ exception to the hearsay rule allows the admissions of a co-conspirator, whether by words or conduct, to be used as proof against the other co-conspirators on the basis that there is an implied authority given to all members of the conspiracy to act or speak in furtherance of the common purpose on behalf of the others.
In the Proulx matter, the QCCA held that while the trial judge properly admitted the statements made by co-conspirators on the basis of the exception, the QCCA nonetheless found that the trial judge had erred by relying on those statements without assessing the ultimate reliability of the such evidence. The QCCA noted that the statements relied on by the trial judge contained hypotheses, future intentions and double hearsay. Accordingly, QCCA held that the trial judge ought to have considered the ultimate reliability of that evidence, and the weight to be given to it.
Moreover, the QCCA held that while the statements made in 2005 by the co-conspirators in this case are admissible to establish the origin, nature, and object of the conspiracy, such evidence was inadmissible to establish Proulx’s involvement in the conspiracy in 2006. The QCCA found that the trial judge had erred by relying on these statements to establish Proulx’s knowledge as to the general nature of the conspiracy and by inferring her involvement in 2006 from such statements. The QCCA also found surprising that the trial judge convicted Proulx as charged for the period between May 27, 2005 and May 29, 2006, when he had found that she had not participated in the conspiracy in 2005. In the end, the QCCA found that the trial judge did not properly rely on the totality of the evidence before him.
The QCCA allowed Proulx’s appeal in light of the reversible error made by the trial judge with regard to his application of the co-conspirators’ exception to the hearsay rule and ordered a new trial.