Anonymised, illustrative composite. The buyer closed in 2021 on a target with a clean-looking file. In 2025, former customers sued over 2019 conduct — because the statute measures the clock from the criminal case's ending, not the conduct's.
At a glance
A buyer acquired 100% of the shares of a specialty chemicals distributor in 2021 for $46,000,000. Diligence turned up a two-year-old letter from the Competition Bureau confirming an inquiry into the target's pricing practices in a narrow product line had been closed with no charges laid at that time. The deal team treated the letter as good news — a resolved issue — and negotiated the representations accordingly: a general compliance-with-laws representation surviving three years, standard R&W insurance covering the same period, plus a narrower, specific indemnity for “known regulatory investigations” that one associate insisted on including almost as a formality.
The deal closed. The three-year general survival period ran out in 2024 without incident. Everyone treated the file as closed.
In late 2024, the Bureau's file on the same pricing conduct concluded — not with the no-charges outcome the 2019 letter had suggested, but with a guilty plea on a related charge, reached after the original inquiry was reopened on new evidence. In early 2025, several of the target's former customers filed a civil claim under Competition Act s.36 seeking damages for the same conduct, which had ended in 2020, before the buyer had ever heard of the company.
The buyer's first reaction was that the claim should be time-barred — the conduct was five years old, well past any survival period in the purchase agreement, and past what looked like a reasonable limitation period. That reaction rested on a general intuition about limitation periods, not on what Competition Act s.36 actually says.
Claimed damages across the customer group totalled $8,900,000. The general compliance representation's three-year survival period had expired roughly ten months before the claim was filed. The specific “known regulatory investigations” indemnity, negotiated with no survival cap of its own, was still live.
S.36(1)(a): “Any person who has suffered loss or damage as a result of (a) conduct that is contrary to any provision of Part VI…may, in any court of competent jurisdiction, sue for and recover from the person who engaged in the conduct…an amount equal to the loss or damage proved to have been suffered by him, together with any additional amount that the court may allow not exceeding the full cost to him of any investigation in connection with the matter and of proceedings under this section.” Price-fixing under s.45 sits in Part VI, so a s.45 conviction opens the door to this civil claim.
s.36(2) makes a criminal conviction do real work in the civil case: the record of proceedings where the defendant “was convicted of an offence under Part VI…is, in the absence of any evidence to the contrary, proof that the person against whom the action is brought engaged in conduct that was contrary to a provision of Part VI.” The customers did not have to prove the price-fixing from scratch — the guilty plea did most of that work for them.
Read the unit. The limitation period is the part that actually decided this file. s.36(4)(a): “No action may be brought under subsection (1), (a) in the case of an action based on conduct that is contrary to any provision of Part VI, after two years from (i) a day on which the conduct was engaged in, or (ii) the day on which any criminal proceedings relating thereto were finally disposed of, whichever is the later.” The clock is not two years from the conduct. It is two years from the later of the conduct and the final disposal of any criminal proceedings relating to it — and a prosecution that concludes years after the deal closed restarts that clock as though the conduct happened yesterday.
That is why the general limitation-period intuition failed here. The conduct ended in 2020. The related criminal proceedings were not finally disposed of until the 2024 guilty plea. Two years from that later date runs to 2026 — well inside which the 2025 claim was filed. A five-year-old cartel can produce a perfectly live civil claim if the prosecution took that long to conclude.
The general compliance representation and the R&W policy's corresponding coverage had already expired and offered nothing. The buyer's recovery ran entirely through the specific indemnity for known regulatory investigations — the clause that, at signing, had seemed like belt-and-suspenders drafting for a matter everyone believed was closed. Because that indemnity carried no survival cap of its own, it was still available when the claim landed.
The seller disputed coverage, arguing the 2019 letter's “no charges at this time” language meant the investigation was not “known” to be live at closing. The dispute turned on the indemnity's drafting rather than on the Act, and settled on terms that split the exposure — a different, and cheaper, fight than litigating the underlying price-fixing claim would have been.
Without the specific indemnity, the buyer would have faced the $8,900,000 claim with no contractual recourse against the seller at all — the general representation had already lapsed, and R&W insurers do not cover known matters disclosed and then excluded from the policy, which this one likely would have been once the 2019 letter surfaced in underwriting.
The tell was the word “closed” doing more work than the letter actually supported. A regulator declining to charge at one point in time is not the same as a matter being finally disposed of — and a diligence team that treats the two as equivalent has no reason to ask how a later prosecution would affect a purchase agreement's own survival clock.
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