Executive Summary: Key Legal and Evidentiary Issues

• The appellants challenged the jurisdiction of the Commissioner of Competition to commence an inquiry under the Competition Act.

• The core issue was whether the Commissioner's decision to initiate an inquiry under section 10 is subject to judicial review.

• The Federal Court held that such inquiries do not immediately affect legal rights or obligations and are therefore not reviewable.

• The Federal Court of Appeal agreed, emphasizing that preliminary administrative steps do not meet the threshold for judicial review.

• The appeal focused on the Federal Court’s application of the high legal standard required to strike a judicial review application.

• Arguments that the initiation of the inquiry caused prejudice or legal consequences were rejected by both courts.

Facts of the Case

Empire Company Limited and its subsidiary, Sobeys Inc., appealed a decision from the Federal Court which dismissed their application for judicial review. The case centers on a decision made by the Commissioner of Competition to initiate an inquiry under section 10 of the Competition Act, targeting alleged abuse of dominant position by the appellants under Part VIII of the Act.

The Commissioner is authorized to begin an inquiry if there is reason to believe that a company may have engaged in anti-competitive conduct. In this case, the appellants argued that the Commissioner lacked jurisdiction to commence the inquiry and that this decision should be reviewable by the courts. They filed an application for judicial review, which the Federal Court struck down on the grounds that the decision to initiate the inquiry had no immediate legal or practical effect on the appellants.

Decision of the Federal Court

The Federal Court found that the Commissioner's decision to initiate the inquiry did not impose legal obligations or cause prejudice. It ruled that such preliminary steps are not subject to judicial review unless they affect legal rights or result in definite legal consequences. The Court concluded that the application for judicial review was “doomed to fail” and granted the motion to strike.

Appeal and Judgment by the Federal Court of Appeal

The Federal Court of Appeal upheld the lower court’s decision. The appellate judges emphasized that not all administrative decisions can be reviewed, particularly when they do not have a direct and immediate impact on legal rights. The Court agreed that an inquiry under section 10 is a preliminary administrative step and does not, in itself, impose enforceable obligations or cause legal prejudice. The fact that the Commissioner obtained further orders during the inquiry did not alter this assessment.

The appellants' attempts to distinguish between an “investigation” and an “inquiry” were rejected. The Court also dismissed reliance on prior jurisprudence, clarifying that earlier cases did not establish a blanket right to judicial review of section 10 inquiries.

Outcome

The appeal was dismissed with costs. The Federal Court of Appeal confirmed that a decision to initiate an inquiry under the Competition Act—when no immediate legal consequence is involved—is not subject to judicial review. The ruling reinforces the high threshold that must be met for preliminary administrative decisions to be challenged in court.