The Ontario Superior Court of Justice in Gifford v. Air Canada (Gifford)[1] declined to certify a proposed class action alleging a conspiracy among certain legacy airlines to indirectly fix prices for flights between Canada and the United States. The Superior Court held that the putative representative plaintiff (the Plaintiff) failed to meet the certification criteria of the Class Proceedings Act, 1992 (the CPA).[2] Among other issues, the Plaintiff failed to establish the existence of common issues and lacked cogent methodology to prove common harm. This decision provides helpful insights into the evidentiary burden on plaintiffs seeking certification in competition class actions, particularly in alleged price fixing and supply depression cases.
Factual background
The proposed class action originated from allegations that the four remaining major legacy network airlines in Canada and the United States[3] conspired to increase ticket prices for transborder travel between the two countries. The Plaintiff alleged that the airlines conspired to suppress supply of capacity in the transborder aviation market, with the effect of inflating airfares for Canadian passengers.
This action was initiated following the inception of US litigation that alleged a similar conspiracy among domestic carriers, including inter alia the three US airlines named as defendants in the Canadian litigation, to restrict capacity within the United States domestic aviation market for the purpose of increasing prices. Although the US class proceedings advanced through discovery, unsuccessful summary judgment motions and resulted in partial settlements, they remained uncertified when Gifford was decided. While Gifford started as a “copycat claim” in Canada, it was ultimately narrowed to cover only the transborder air travel market.[4]
The Plaintiff claimed damages for breach of the Competition Act[5], and in the alternative, under the common law cause of action of civil conspiracy, as well as unjust enrichment. The scope of the proposed class was to cover Canadian residents who purchased a ticket from the defendants for transborder air travel between January 1, 2010, and July 1, 2015.[6]
The Plaintiff’s motion for certification of the proposed class action did not (i) disclose a reasonable cause of action in the pleadings as required by s. 5(1)(a) of the CPA; (ii) establish any basis in fact, being the relevant low evidentiary threshold, to establish common issues as required by s. 5(1)(c) of the CPA; nor (iii) advance an adequate representative plaintiff as required by s. 5(1)(e) of the CPA.
No cause of action disclosed in pleadings
The Superior Court of Justice found that the Statement of Claim failed to disclose a reasonable cause of action.
In its analysis of the pleading, Justice Leitch found that the claim did not plead the material facts necessary to support a claim under either s. 36 of the Competition Act for breach of s. 45 of that legislation, or the common law causes of actions pleaded.
Although the Plaintiff alleged that the defendants engaged in coordinated “capacity discipline” to suppress supply and raise prices, the Statement of Claim baldly enumerated the elements of the causes of action, without alleging specific impugned conduct by each defendant.[7]
Relying on the Federal Court of Canada’s decision in Jensen v. Samsung Electronics Co Ltd. [8], Justice Leitch reiterated that Canadian law does not proscribe “conscious parallelism,” whereby competitors independently adopt a common course of conduct with an awareness of the likely response of competitors, such as by matching a competitor’s price, but without engaging in actual collusion.
The Superior Court of Justice observed that the Statement of Claim did not identify specific documents or forms of communication constituting an unlawful agreement between competitors, save and except for public comments made by airline executives at a June 2015 International Air Transport Agency (IATA) conference,[9] which constituted unilateral conduct that could not be the foundation of an unlawful agreement between the defendants.[10] The bald assertions made in the Statement of Claim lacked particulars of the individuals involved, the actions undertaken, and the timing and manner of communication among the defendants.[11]
No common issues or methodology to prove harm
Even if the pleadings had disclosed a viable cause of action, the Superior Court of Justice found that the Plaintiff failed to satisfy the common issues requirement under section 5(1)(c) of the CPA.
The Plaintiff’s proposed common issues fell into two categories:
- Liability-related issues, including whether:[12]
- The defendants breached section 45 of the Competition Act, thereby attracting liability under section 36;
- The defendants engaged in a civil conspiracy by predominant purpose or unlawful means;
- A conspiracy existed, including its scope, duration, concealment and intent to harm class members;
- The defendants took unlawful steps intended to cause economic loss or enrich themselves at the class’s expense.
- Loss-related issues, including whether:[13]
- Class members suffered harm as a result of the alleged conduct;
- Damages, restitution or disgorgement could be awarded on an aggregate basis;
- The defendants were unjustly enriched and whether a juristic reason existed for them to retain those gains;
- Punitive or exemplary damages should be awarded;
- Costs should be assessed globally under section 36 of the Competition Act.
The Superior Court of Justice examined whether there was “some basis in fact” to support these proposed common issues. Upon reviewing the evidentiary record, the Court found that the Plaintiff failed to establish a sufficient factual foundation to establish liability-related or loss-related common issues for the purposes of certification.[14]
In evaluating the sufficiency of the proposed liability-related common issues, the Court reviewed the record with a focus on the Plaintiff’s attempt to ground the conspiracy allegation in supposed evidence from US class action proceedings and expert opinions.[15]
The Plaintiff asserted a connection between the US domestic and transborder conspiracies, citing parallel conduct, partial settlements involving certain US carriers and judicial comments from interlocutory motions in the continuing US litigation. The Court determined that this reliance was misplaced. The US proceedings involved different parties, markets and a distinct theory of conspiracy. Furthermore, there were no findings of liability or fact made in the US proceedings, rather only recitation of evidence supporting procedural rulings made pursuant to the relevant tests applicable on those procedural motions.[16]
This case was distinguished from British Columbia (Attorney General) v. Malik[17] (Malik), in which a BC judge, on an Anton Piller motion, had regard to a prior judgment in a Rowbotham proceeding. In Malik, both judicial proceedings involved the same or related parties and issues, and the prior decision constituted a judicial pronouncement following a merits hearing.[18] In contrast, the putative US evidence in the present case did not share these characteristics and did not establish the required evidentiary foundation to support certification.[19]
The Court next addressed the proposed damages-related common issues and evaluated whether the Plaintiff had presented a methodology for demonstrating harm on a class-wide basis.
In Pro Syx Consultants Inc. v. Microsoft Corp.[20], the Supreme Court of Canada established the test for expert methodology to provide some basis in fact to establish commonality of damages-related issues. In particular, the proffered expert methodology must be credible or plausible, meaning that it “must offer a realistic prospect” of establishing loss on a class-wide basis, and there “must be some evidence of the availability of the data to which the methodology is to be applied.”[21]
The Plaintiff relied on the expert evidence of Dr. West, who proposed a methodology based on multiple regression analysis comparing ticket prices before and after the alleged conspiracy.[22] He asserted that overcharges could be estimated by comparing observed prices with “but-for” prices in affected markets.[23] However, the Court noted that both Dr. West and the defendants’ expert, Dr. Levinsohn, agreed that a market-by-market analysis was required, given the differentiated nature of airline routes and competitive conditions.[24] The Court found that Dr. West’s methodology failed to adequately grapple with these complexities: Dr. West could not identify how many routes his analysis would apply to, had not finalized which economic variables needed to be controlled for and admitted under cross-examination that his model did not account for important differences in regional economic trends.[25]
Ultimately, the Court agreed with the defendants that Dr. West’s proposed methodology “does not and cannot overcome the unique challenges posed by the complex and multi-faceted nature of defining and accounting for the thousands of separate markets for transborder air travel.”[26]
While the Plaintiff also proposed a common issue relating to punitive or exemplary damages, she failed to establish a basis in fact for such claim.[27]
No adequate representative plaintiff
The Plaintiff had not purchased a ticket directly from a defendant. Instead, she redeemed Air Miles[28] and paid only taxes and fees.[29] The defendants argued that this did not qualify as a “purchase” and that she therefore lacked the direct stake required to act as a representative plaintiff.[30]
The Plaintiff attempted to rely on Air Miles’ current terms and conditions, which suggest that loyalty point redemptions form a contract directly between the traveller and the airline.[31] However, the Superior Court of Justice found that these materials were obtained from an internet archive and lacked probative value regarding the terms in effect in 2015.[32] Additionally, the price of the Plaintiff’s ticket was based on hearsay evidence, and there was no clear contractual link between her and the airline.
Due to insufficient evidence linking the Plaintiff to the class definition, the Court determined that the adequacy requirement under section 5(1)(e) was not met.[33] While the Court acknowledged that it would in other circumstances consider allowing for an amendment of the Statement of Claim to address this shortcoming, or to allow the opportunity to propose an alternative and adequate representative plaintiff, given the earlier findings that other prongs of the certification test were not met, such an opportunity to make a curative amendment was not indicated in the present case.[34]
Key takeaways
The decision in Gifford offers significant guidance with respect to competition-based class actions under the CPA and addresses a number of key evidentiary obstacles for plaintiffs that defendants to proposed class proceedings may leverage.
The Superior Court of Justice confirmed that the cause of action prong of the certification test remains a meaningful obstacle for which defendants should properly hold plaintiffs to their burden, particularly when faced with bald allegations focused on the elements of a cause of action rather than specific misconduct.
Where plaintiffs rely on extraneous litigation in support of their evidentiary burden to establish common issues, Gifford confirms that decisions on procedural motions in litigation involving different parties, markets and products carry little, if any, weight in establishing a factual foundation for a Canadian conspiracy. Without a prior judicial merits determination involving the same parties and issues, orders from other litigation, including US litigation on related issues, have limited probative value.
Defendants should be mindful that plaintiffs’ proposed expert methodologies to establish common loss issues must be specifically adapted to the relevant market context.
Finally, defendants should remain vigilant in rigorously assessing whether a proposed representative plaintiff meets all of the factual requirements to assert a claim in the manner asserted on behalf of the proposed class.
Thank you to Bankole Alade for his contributions to the insight.
For more information, please reach out to the authors, Amer Pasalic and Mark Glynn.
[1] Gifford v. Air Canada, 2025 ONSC 3335 [Gifford].
[2] Class Proceedings Act, 1992, SO 1992, c 6. The court applied the “older” five part test for certification under s. 5 of the CPA as this action, commenced in 2015, predated the 2020 amendments to the test.
[3] Air Canada, United, Delta and American Airlines.
[4] Gifford, supra at note 1 at para 21.
[5] Competition Act, R.S.C., 1985, c. C-34.
[6] Gifford, supra at note 1at para 23. The timeframe was the subject of a number of amendments to the Statement of Claim.
[7] Gifford, supra at note 1 at para 105.
[8] Jensen v. Samsung Electronics Co. Ltd. [2022] 3 FCR 34.
[9] Gifford, supra at note 1 at para 82.
[10] Ibid at para 109.
[11] Ibid at para. 107.
[12] Ibid at para 128
[13] Gifford, supra at note 1 at para 170.
[14] Ibid at paras 169 and 205.
[15] Ibid at para 137.
[16] Ibid at para 162.
[17] British Columbia Attorney General) v. Malik, 2011 SCC 18, [2011] 1 S.C.R. 657 [Malik].
[18] Gifford, supra at note 1 at para 165.
[19] Ibid at paras 166 and 167.
[20] Pro Syx Consultants Inc. v. Microsoft Corp 2013 SCC 57.
[21] Ibid at para 172.
[22] Ibid at para 179.
[23] Ibid at para 179.
[24] Ibid at para 182.
[25] Ibid at para 195.
[26] Ibid at para 197.
[27] Ibid at para 204.
[28] Air Miles is a generic loyalty program in Canada for which members accumulate points primarily for travel-related redemptions. The program is unaffiliated to any particular airline.
[29] Ibid at para 212
[30] Ibid at para 214.
[31] Ibid at para 218.
[32] Ibid at para 218.
[33] Ibid at para 218.
[34] Ibid at para 219.
