On Thursday, September 4, 2014, the Supreme Court of Canada dismissed the plaintiffs’ motion for leave to appeal inWakelam v. Wyeth Consumer Healthcare/Wyeth Soin de Sante Inc. The leave application arose from a 2014 British Columbia Court of Appeal decision that clarified whether plaintiffs could claim disgorgement remedies based on statutory causes of action found in the Business Practices and Consumer Protection Act (“BPCPA”) and Competition Act.
The Supreme Court’s decision provides additional certainty in a developing area of law about the limits of disgorgement remedies. Non-injured plaintiffs will not be able to advance claims under the BPCPA and Competition Act.
On December 18, 2008, Health Canada reversed a longstanding policy that had permitted the sale of certain non-prescription cough and cold medicines for use by children, requiring manufacturers to re-label the medicines to instruct consumers that they should not be used in children under six years of age. The defendant cold medicine manufacturers complied with the re- labeling requirements.
Ms. Wakelam commenced a proposed class proceeding on behalf of all British Columbia residents who purchased cough medicine for use by children under the age of six, between 1997 and 2008. She alleged that in marketing the medicines for use in children under six, the manufacturers had engaged in “deceptive acts or practises” contrary to the BPCPA, and made false or misleading representations to the public, contrary to the Competition Act. She sought the disgorgement of the profits received by the defendants as a result of their alleged wrongdoing.
There was no evidence that Ms. Wakelam had provided the cough medicine to her child, nor that the cough syrup (if consumed) was ineffective or caused any injury or harm.
Disgorgement Is Not Available Under The BPCPA Or TheCompetition Act
The British Columbia Court of Appeal in Wakelam followed its 2012 decision in Koubi v. Mazda Canada, holding that theBPCPA is a complete code that does not provide for restitutionary claims. In Wakelam, the Court of Appeal held that claims for waiver of tort, unjust enrichment and constructive trust are not available under the statute.
Similarly, because section 36 of the Competition Act limits recovery to “the loss or damage proved to have been suffered” by the plaintiff, the Court of Appeal held that the statute does not provide consumers with a “general right … to sue in tort or to seek restitutionary remedies” for alleged false or misleading representations in contravention of the Act.
Impact of The Supreme Court Decision
The Supreme Court of Canada decision provides additional certainty that “deceptive practice” claims under either theBPCPAor Competition Act must be founded on some actual loss or damage suffered by the plaintiff. The decision is of significance to manufacturers and distributors facing claims for disgorgement of profits in the absence of actual loss by consumers.
The decision will impact future litigation across the country, particularly in class proceedings founded on alleged breaches of the Competition Act and consumer protection statutes where similar relief is sought. Wakelam, along withKoubi, provide a strong foundation for a full and critical analysis of the viability of pleaded remedies at certification, rather than at a common issues trial. BLG has issued an alert that contains more information about Wakelam and its potential impact on manufacturers and distributors in particular.
The full decisions of the British Columbia Court of Appeal in Wakelam v. Wyeth Consumer Healthcare and Koubi v. Mazda Canada. are available online, and are indexed respectively as 2014 BCCA 36 and 2012 BCCA 310.