It is one of the great mysteries of Canada’s bread price-fixing scandal: How did the alleged conspiracy start? On Thursday, an Ontario Superior Court justice heard how putting that information on the public record could destroy the reputation of a person who can be identified only as “Applicant X.”
Scott Fenton, a lawyer representing X, told Justice Lynn Ratushny that seven paragraphs in a key court document filed by the Competition Bureau and previously blacked out by the court at X’s request should remain redacted and subject to a publication ban. Putting the information on the record, Mr. Fenton said, would “utterly ruin” his client’s “sterling reputation” and “make him roadkill” in the case.
“Nothing short of a publication ban will protect my client’s identity [from] the prejudice he would suffer,” Mr. Fenton said in court. “It would destroy him as an innocent person …and that would subvert the ends of justice.”
The document, partially released to the public by the court on Jan. 31, lays out the bureau’s case to search and seize documents in the bread-fixing case. The bureau has alleged that Canada’s top two bread makers, Canada Bread Co. Ltd. and Weston Bakeries Ltd., launched a campaign to fix the price of an array of bread products with the co-operation of some of the country’s biggest retailers more than 14 years ago. No charges have been laid to date.
Retailer Loblaw Cos. Ltd. and parent George Weston Ltd., which also owns Weston Bakeries, have admitted to participating in what they called an industrywide bread price-fixing scheme and will not face criminal charges in exchange for co-operating with the investigation. Loblaw began mailing $25 gift cards to customers early this year in an effort to make amends.
The seven paragraphs in question fall immediately below a heading in the document that reads: “Reasonable Grounds to believe that offences have been committed,” followed by the subheading “Genesis of the Alleged Conspiracy, Agreement or Arrangement – Direct Communications.” Mr. Fenton argued the “salacious” subheading should also be subject to a publication ban.
Lawyer Tae Mee Park, representing media firms The Globe and Mail Inc., CTV News, Postmedia Network Inc., and CBC, argued that the entire document, including additional words and passages that are also blacked out, should be on the public record. She argued that X would not suffer “sufficient prejudice” to his reputation that would outweigh the public’s right to know everything.
“Public dialogue and discussion is quite important to this case,” she said. “I submit that’s an important piece of this story” that the bureau deemed important enough to include in the document. “X is perfectly capable of defending himself if there are questions about his role.” She noted that the bureau wasn’t taking a position on X’s application.
Justice Ratushny reserved her decision to a later date, meaning the publication ban on the seven paragraphs and X’s identity remain in effect − though the media can still report on the parts of the court document that were previously put on the court record.
The hearing itself began as an “in camera” proceeding, with reporters and members of the public excluded from the courtroom and forbidden from even reporting on the existence of the application by X. They were let into the courtroom Thursday morning after Justice Ratushny ruled in favour of a request by the media coalition that deliberations on the publication ban should be held in open court.
The bread-fixing case has had huge repercussions across the grocery industry. A recent study by Dalhousie University’s faculty of management said consumer trust in Loblaw had tumbled since it disclosed its role in the alleged conspiracy, and the retailer took a $79-million after-tax charge in the fourth quarter to account for the gift-card initiative, which has been criticized by some as a cynical public-relations ploy.
The case has also caused a rift among the grocery industry giants. Retailers Metro Inc. and Sobeys Inc., which deny they were part of any price-fixing scheme, have also applied to the court to reveal the identities of two Weston witnesses who provided the bureau with much of the information at the heart of its case.