Canada: British Columbia Court Of Appeal De-Certifies Class Action—Was The Class Action Really Necessary?

On January 30, 2014, the British Columbia Court of Appeal de-certified a class action1 alleging violations of both the British Columbia Business Practices and Consumer Protection Act2 (the BPCPA) and the federal Competition Act.3 The court found that both pieces of legislation constitute complete codes, such that class members did not have the ability to bring tort or equitable claims alleging breaches of the legislation.

While certain aspects of the class members' claims remained after the tort and equitable claims were struck, the Court of Appeal went on to question the utility of the claims that remained and de-certified the class action, commenting that the sophisticated and scientifically supported regulatory system under the Food and Drugs Act4 (the FDA) had brought about the change in labeling sought. If the purpose of a class action is to redress "real injuries suffered by real people," the Court of Appeal noted it was worth asking whether anything might be meaningfully addressed in the context of the remaining aspects of the claim.

Of interest to litigants generally in class actions, the Court of Appeal was prepared to address the parties' legal questions head-on. The Court of Appeal confirmed it is beneficial to all concerned, including the justice system, if legal questions are directly addressed when raised at an early stage, rather than left for a trial that may never take place, or for another court in another case. It emphasized that scarce judicial resources may be squandered when difficult questions of law are continually sidestepped in the class action context as has been the case in the past.

Thus, while the cause of action test is often considered an easy one to meet in the context of class certification, it is not surmounted in all cases.

Background and facts

In 2008 Health Canada reversed a long-standing policy that had permitted the sale in Canada of certain children's non-prescription cough and cold medicines. Manufacturers had already voluntarily ceased marketing the medicines for use for children under age two, and as a result of the change in policy Health Canada required those manufacturers to re-label the medicines to instruct consumers that they should not be used for children under six.5

The plaintiff nonetheless filed an action and sought to certify a class action against the defendant manufacturers of the cough and cold medicines. She made no claims alleging that the cough medicines had injured any class members, but rather advanced claims for unjust enrichment, waiver of tort and constructive trust, on the basis of alleged statutory breaches under the BPCPA and Competition Act.6 The plaintiff also sought direct relief under the legislation. The motions judge granted certification on December 22, 2011,7 and the defendants subsequently launched an appeal.

The Court of Appeal's decision

The defendants argued, as a first ground of appeal, that the FDA's purposes would be frustrated if provisions regarding "deceptive practices" under the BPCPA were to apply to the packaging, labeling and sale of the medicines in question.8 The Court of Appeal shared the defendants' concerns regarding the possibility of different provincial laws applying across Canada to the labeling and marketing, and beneficial drugs being denied to some Canadians as a consequence.9 However, the Court of Appeal found that the FDA's purpose is primarily permissive and as such, the Court of Appeal was not convinced that applying the BPCPA to the marketing and sale of cold medicines would necessarily frustrate FDA purposes such that the BPCPA should be rendered inoperative.10

The Court of Appeal next turned to whether the statement of claim disclosed a cause of action.11 The defendants argued that, in addition to the damages that might be available to her individually under s. 171 of the BPCPA, the plaintiff had improperly sought to recover under restitutionary principles premised on this purported BPCPA breach.

The Court of Appeal found that consistent with its decision in Koubi v Mazda,12 released after the certification application was decided, the BPCPA is an "exhaustive code" for regulating consumer transactions and that so-called anti-enrichment claims premised on breach of the BPCPA were not available in law.13 The Court of Appeal concluded the reasoning in Koubi applied not only to the allegation of waiver of tort (which was specifically dealt with in Koubi), but also to the claims for unjust enrichment and constructive trust based upon the purported breach of the BPCPA.14

The defendants also argued that the claims for restitutionary remedies under the Competition Act advanced by the plaintiff were "judicially indistinguishable" from those advanced under the BPCPA in Koubi.15 The Court of Appeal agreed and determined nothing in the Competition Act indicated Parliament intended that the statutory right of action under the Competition Act should be augmented by a general right for consumers to sue in tort or to seek restitutionary remedies. As such, the pleadings did not disclose a cause of action as the Competition Act was a complete code.16

The Court of Appeal also accepted that there was no pleading that the plaintiff had sustained a loss or damage as a result of a breach of the Competition Act, and as such a direct claim under the Competition Act was not disclosed. Further, relying on recent Supreme Court of Canada authority, the Court of Appeal found that aggregate assessment provisions of the Class Proceedings Act, do not give rise to a cause of action for restitutionary remedies not already available under the BPCPA or the Competition Act.

Disposition

In reversing the majority of the certification judge's finding, the Court of Appeal found that after the claims had been struck, the only claims that remained were for a declaration, injunctive relief, and an "advertising order" under the BPCPA. Given this, the Court of Appeal saw no alternative but to allow the appeal and decertify this proceeding, leaving the plaintiff at liberty to seek the certification of what remained of the action.17

The Court of Appeal noted that the case before it involved a "sophisticated and scientifically-supported regulatory system" in the form of the FDA regime, which in the Court of Appeal's words "exists for the express purpose of monitoring the marketing of pharmaceuticals in Canada." The Court of Appeal noted that this "system" has already brought about the changes sought by the plaintiff and if the purpose of class actions is to redress "real injuries suffered by real people" it was worth asking whether anything meaningful could be achieved by what remained of the lawsuit given the relief sought had been addressed by Health Canada and the defendants.

Of interest, the Court of Appeal in Quebec upheld the denial of authorization in a similar proposed class action (see our legal update), finding the allegations in that case did not demonstrate that the products were objectively harmful when used as directed, that the defendants had made false or misleading representations or had neglected to diligently disclose an important fact concerning the safety of their products.

Norton Rose Fulbright was counsel for certain of the defendants on the appeal.

The authors wish to thank law student Christopher Mamo for his help in preparing this legal update.

Footnotes

1 Wakelam v. Wyeth Consumer Healthcare/Wyeth Soins de Sante Inc. , 2014 BCCA 36 [Wakelam].

2 SBC 2004, c2.

3 RSC 1984, c C-34.

4 RSC 1985, c. F-27.

5 Wakelam, supra, at para 1.

6 Ibid, at para 4.

7 Ibid, at para 6.

8 Ibid, at para 16.

9 Ibid, at para 41.

10 Ibid, at para 42.

11 Ibid, at para 44.

12 2012 BCCA 310 [Koubi].

13 Wakelam, supra, at para 56.

14 Ibid, at para 66.

15 Ibid, at para 78.

16 Ibid, at para 90.

17 Ibid, at para 109.

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions