The Second Opinion: BCCA Overturns Certification Of Wakelam Class Action

The British Columbia Court of Appeal has released an important new judgment overturning the certification of a medical products class action: Wakelam v. Wyeth Consumer Healthcare/Wyeth Soins de Sante Inc., 2014 BCCA 36. The decision in Wakelam holds that common law restitutionary remedies, including waiver of tort, are not available for breaches of either the Competition Act or the B.C. Business Practices and Consumer Protection Act ("BPA"), and confirms that proof of causation is required to obtain damages under each of these statutes. At the same time, Wakelam rejects the argument that the BPA is constitutionally inoperative under the doctrine of federal legislative paramountcy, based on conflict with the Food and Drugs Act ("FDA"). While the result is something of a mixed blessing for defendants, the decision is notable for the Court of Appeal's willingness to tackle substantive legal issues on certification in the wake of the Supreme Court of Canada's recent class actions trilogy.

Background

The Wakelam case involved a class action against the manufacturers of children's cough medicines, which were alleged to be ineffective and unsafe for children below the age of six. The plaintiff did not assert that the medicines actually caused harm to any member of the class. Instead, she claimed that the defendants made misrepresentations regarding the efficacy and safety of the medicines, and sought: (1) damages that reflected the "waste of money" suffered by class members who purchased the medicines based on the misrepresentations; (2) alternatively, restitution of all revenues received by the defendants as a result; and (3) the non-monetary remedies of a declaration, injunction and "advertising order" available under the BPA. The plaintiff's claims were based upon the "deceptive practices" provisions of the BPA, ss. 36 and 52 of the Competition Act, and the restitutionary theories of unjust enrichment, waiver of tort and constructive trust (together with an allegation of intentional interference with economic relations which was later struck out). The class action was certified by the B.C. Supreme Court in 2011.

The Appeal Decision

The Court of Appeal unanimously overturned certification after finding that: (1) common law restitution was unavailable for breaches of the Competition Act and BPA; and (2) the plaintiff failed to plead any causal connection between her alleged loss and the defendants' alleged breaches of these statutes. Three...