Canada (Director of Investigation and Research, Competition Act) v. Southam Inc. [1997] 1 S.C.R. 748 [1996] S.C.J. No. 116 DRS 97-05080 File No.: 24915. Supreme Court of Canada (from the Federal Court of Appeal) Lamer C.J. and La Forest, L'Heureux-Dubйé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major JJ. November 25, 1996 March 20, 1997 (51 pp.)

[QL Ed. note: The appeal against remedy was dismissed on November 25, 1996. The appeal on the merits was reserved at that time and was allowed on March 20, 1997.]

Trade regulation —— Regulatory bodies —— Competition tribunal —— Appeals to Court of Appeal —— Standard of review - - Competition —— Unfair competition.

These were appeals by Southam from a decision of the Court of Appeal allowing an appeal by the Director of Investigation and Research and dismissing Southam's appeal from a decision of the Competition Tribunal. Southam owned two daily newspapers. Community newspapers in the area were more successful than Southam's. Southam acquired a controlling interest in several community newspapers, a real estate advertising publication and other properties. The Director applied for an order requiring Southam to divest itself of three of these properties on the ground that Southam's acquisitions were to lessen competition substantially in the area's retail and real estate print markets. The Tribunal found that the acquisition of the newspapers did not substantially lessen competition in the retail print advertising market but the acquisitions did have such an effect on real estate print advertising. Southam proposed that the Tribunal impose the remedy of requiring it to sell the real estate supplement of the relevant newspaper. The Tribunal rejected that proposal and ordered Southam to divest itself of either the real estate publication or the entire newspaper that the real estate supplement was part of. The Director appealed to the Court of Appeal from the finding of the Tribunal and Southam appealed on the remedy. The Court of Appeal concluded that it owed no deference to the Tribunal's finding about the dimension of the newspaper market.

HELD: Southam's appeal with respect to finding was allowed but its appeal with respect to remedy was dismissed. In determining what was an appropriate standard of review for tribunal decisions, appellate courts were required to consider the nature of the problem, that is whether the issue was one of fact, law or a mixture of the two, the applicable law, and the expertise of the tribunal. The issue here was one of mixed law and fact, the Act granted a broad right of appeal, and the Tribunal had specialized expertise on commercial matters. Upon these considerations, the standard of review was that of reasonableness simpliciter. Here, the Tribunal did not act unreasonably in deciding that Southam's newspapers were in different product markets than the community newspapers. The standard of review regarding the remedy chosen by the Tribunal was that of reasonableness as this was a matter of mixed law and fact. The remedy chosen by the Tribunal was not unreasonable. It was not punitive as it was the only effective remedy available.

Statutes, Regulations and Rules Cited:

Competition Act, R.S.C. 1985, c. C-34, s. 1.1, 92, 92(1), 92(1)(e)(iii).Comptetition Tribunal Act, R.S.C. 1985, c. 19, ss. 3, 4, 10, 12(1), 13,

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