In Wakelam v. Wyeth Consumer Healthcare / Wyeth Soins de Sante Inc., 2014 BCCA 36, the British Columbia Court of Appeal overruled a decision certifying a class action involving the sale of cough and cold medicines for use by children.
On December 18, 2008, Health Canada reversed a policy permitting the sale of certain non-prescription cough and cold medicines for use by children. While manufacturers had already withdrawn the products from the market for use in children under age two, Health Canada required relabeling to instruct against use in children under age six.
The plaintiff commenced this action on behalf of “all persons resident in British Columbia who purchased Children’s Cough Medicine for use by children under the age of six, that was supplied, offered for sale, advertised or promoted by the Defendants between December 24, 1997, to present.” She alleged that, in marketing the medicines for use by children under age six, the defendants engaged in “deceptive acts or practices” contrary to the Business Practices and Consumer Protection Act, (the BPCPA) and made misrepresentations contrary to s. 52 of the Competition Act.
Under the BPCPA, the plaintiff sought the following relief: (i) a declaration pursuant to s. 172(1)(a) that the defendants had engaged in deceptive acts or practices; (ii) an interim and permanent injunction pursuant to s. 172(1)(b); (iii) an order under s. 172(3)(c), requiring the defendants to advertise the particulars of any judgment, declaration, order or injunction against it; (iv) an order under s. 172(3)(a) that the defendants refund all sums paid by the class, or disgorge all revenue made on account of their purchases; and (v) damages under s. 171.
Pursuant to s. 36 of the Competition Act, the plaintiff sought damages and the costs of her investigation with respect to the alleged breach of s. 52.
Also, the plaintiff claimed unjust enrichment, waiver of tort and constructive trust on the basis of the alleged breaches of the BPCPA and the Competition Act.
On December 22, 2011, the action was certified by the British Columbia Supreme Court as a class proceeding on substantially the terms sought by the plaintiff.
The Decision of the Court of Appeal
On the basis of the following findings with respect to several central issues, the court allowed the appeal and decertified the action.
- The BPCPA
The court struck the claims of waiver of tort, unjust enrichment and constructive trust insofar as they were based on alleged breaches of the BPCPA. The plaintiff claimed that the defendants breached the BPCPA by supplying, soliciting, offering, advertising and promoting the impugned medicines. However, the court found that there was no legislative intent to create restitutionary causes of action arising from or based on breaches of theBPCPA. Applying the reasoning in Koubi v. Mazda Canada Inc., in which the court held that “anti-enrichment” claims premised on a breach of the BPCPA were not available at law, the plaintiff’s claims were bound to fail.
In addition, as conceded by the plaintiff, the claim for constructive trust was foreclosed by the judgment of the Supreme Court of Canada in Pro-Sys Consultants Ltd. v. Microsoft Corporation, (Pro-Sys), which held that a plaintiff must be able to point to a link or causal connection between his or her contribution and the acquisition of specific property and that such a remedy is only available where a monetary award is inappropriate or insufficient.
On a similar basis, the court concluded that a restorative order under s. 172(3)(a) of the BPCPA was not available. This provision allowed for the restoration of property or money in which a person has an interest, but the pleading did not suggest that any such interest could arise in this case. As such, this claim was bound to fail.
The plaintiff’s own claim for damages was similarly bound to fail as the requisite causal connection between a contravention of the BPCPA and the plaintiff’s loss had not been pleaded.
However, the court was not persuaded that the claims for declaratory or injunctive relief or an order requiring the defendants to advertise the particulars of any order granted against them (under s. 172 of the BPCPA) were bound to fail. The Court did note that “an injunction is unlikely to be granted when, as in this instance, the conduct complained of has already ceased and is unlikely to be repeated.”
- The Competition Act
According to the Court of Appeal, there was “nothing in the Competition Act to indicate that Parliament intended that the statutory right of action should be augmented by a general right in consumers to sue in tort or to seek restitutionary remedies on the basis of breaches of Part VI [of the Competition Act].” As with the BPCPA, the plaintiff had claimed waiver of tort, unjust enrichment and constructive trust on the basis of breaches of theCompetition Act. The Court of Appeal held that the certification judge erred in finding causes of action where restitutionary remedies were sought based on alleged breaches of the Competition Act. In addition, the court struck the plaintiff’s claim for damages under s. 36 of the Competition Act. As the plaintiff had failed to plead material facts supporting a causal connection between a breach of the statute and her loss, the court inferred that she was unable to do so.
- Aggregate Damages
The court also held that s. 29 of the Class Proceedings Act, (the CPA) “does not avail the plaintiff to providerestitutionary claims not otherwise open to her under the [BPCPA] or Competition Act.” The Supreme Court of Canada in Pro-Sys held that the aggregate damage provisions of the CPA provide a method to assess the quantum (but not the fact) of damage. They are applicable only once liability has been established. Ultimately, having struck all other claims, the Court left open the possibility of the plaintiff seeking to certify her claims for declaratory or injunctive relief and an advertising order under the BPCPA. However, the Court noted that, “if the purpose of class actions is to redress ‘real injuries suffered by real people’…, it is worth asking whether anything meaningful is likely to be achieved by the pursuit of what remains of this lawsuit.”
- The Doctrine of Paramountcy
Although the appeal was allowed and the proceeding decertified, the Court of Appeal did find that the certification judge had not erred in rejecting an argument based on the doctrine of paramountcy. The defendants had argued that the consumer protection legislation, BPCPA, was inconsistent with the Food and Drugs Act, (the FDA), such that the doctrine of paramountcy rendered the BPCPA inoperative in this case. Specifically, they claimed that the federal scheme, involving a single, federal “decisional authority” overseeing all aspects of drug marketing, would be frustrated by legislation allowing a provincial regulator to usurp this decisional role. According to the defendants, the federal Ministry of Health has a duty to make available those products that Health Canada has found to be beneficial. However, the court found that the primary purpose of the FDA was to protect public health and safety by monitoring and regulating the marketing, advertisement and labelling of drugs. It was not to compel the marketing of drugs that are judged to be beneficial. The FDA is “primarily permissive” and does not create a specific right in a manufacturer or in a consumer. Therefore, the Court of Appeal found that the application of the BPCPA would not necessarily frustrate the purposes of the FDA.