nan QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2015 SKQB 345 Date: 2015 10 30 Docket: QBG 1907/2013 Judicial Centre: Regina BETWEEN: JASON SANDOFF AND CINDY RETALLICK and LOBLAW COMPANIES LIMITED AND LOBLAWS INC. Counsel: E.F. Anthony Merchant, Q.C. for the plaintiffs Robert Leurer, Q.C. and Markus Kremer for the defendants JUDGMENT KEENE J. October 30, 2015 I. THE CLAIM, DEFENCE AND APPLICATIONS [1] The original plaintiff, Mr. Sandoff, issued his claim under The Class Actions Act, SS 2001, C-12.01 on October 8, 2013. This claim was subsequently amended and will refer to the amended paragraph numbers. The claim seeks damages against the defendants, Loblaw Companies Limited and Loblaws Inc. [Loblaws]. The claim in part states: 10. This claim concerns the misleading and deceptive advertising of “Low Sodium” beverages by Loblaws and seeks to recover damages on behalf of those who purchased the Defendants’ “Low Sodium” beverages (the “Class” or “Class Members”) but ultimately received beverages which were no lower or not appreciably lower in sodium than other, non-“Low Sodium” products. 17. The Low Sodium Products do in fact have minimal sodium content; however, their sodium content is equivalent to, or greater than, that of comparable alternative products, and not “low” in relative sense. 18. The application of the Low Sodium Label to Low Sodium Products is deceptive and misleading in that it implies the presence of reduced, healthier amount of sodium when, in fact, the sodium content of the Low Sodium Products is similar to, if not greater than, the sodium content of other, regularly packaged products who do not include Low Sodium Label (the “Misrepresentation”). 19. On August 29th, 2013 at approximately 6:53 p.m., the Plaintiff purchased Low Sodium Product, and more specifically, PC Diet Cola (Caffeine-Free) (UPC code 6038309182) drink, from the “Independent” (Your Independent Grocer) store located at 1341 Broadway Avenue in Regina, Saskatchewan (“Plaintiff Sandoff’s Purchased Product”) was purchased on the Plaintiff, Jason Sandoff’s, behalf. The packaging of the Plaintiff Sandoff’s Purchased Product indicated that it was Low Sodium Product, and the Plaintiff believed he was purchasing Low Sodium Product. 20. On December 12th, 2014 at approximately 3:55 pm, Cindy Retallick purchased Low Sodium Beverage, specifically PC Diet Cola (Caffeine-Free) (UPC code 6038378705) drink, from the Real Canadian Superstore located at 4450 Rochdale Boulevard in Regina, Saskatchewan (“Retallick’s Purchased Product”). 21. The packaging of Retallick’s Purchased Product indicated that they were Low Sodium Products. [Alterations as they appear on amended claim] [2] By way of clarification “PC” is brand manufactured and sold by Loblaws. Ms. Retallick was added as plaintiff in the amendment. [3] The claim goes on to make claims of negligence, breach of warranty, violations of the Competition Act, RSC 1985, C-34, violations of various provincial consumer protection legislation, other statutory violations (i.e. the Consumer Packaging and Labelling Act, RSC 1985, C-38 and the Food and Drugs Act, RSC 1985, F-27), unjust enrichment, waiver of tort and exemplary and punitive damages. [4] Loblaws served its statement of defence and application for summary judgment (with supporting affidavit of Ms. Sherry Casey) on September 24, 2014. The defendants deny any liability to the plaintiffs or any member of the proposed class on the basis that the “low sodium” label is factually correct and that no reasonable person would have assumed that the “low sodium” label meant that the PC Low Sodium Beverages are lower in sodium than other alternate products. [5] The plaintiffs abandoned their claims under negligence, sale of goods legislation, and breach of warranty after hearing the oral submissions of defence counsel. [6] The original plaintiff, Mr. Sandoff, filed his notice of application for certification on September 16, 2015. This notice was amended during the hearing held before myself. The parts of the notice that were amended (save for some minor changes) are as follows: (b) defining the class as “Individuals who purchased “Low Sodium” beverages “all persons in Canada who, on or after October 8th, 2011, purchased Diet Cola, Low Sodium, Caffeine Free or PC Club Soda, Low Sodium (“Low Sodium Beverages”) from Loblaws in Canada.” nan (d) stating the nature of the claims asserted on behalf of class members for breach of consumer protection and sale of goods legislation, breach of warranty, negligence the Competition Act, and waiver of tort on the grounds that: (1) the Defendants made deceptive and misleading advertisement and representation by selling “Low the Low Sodium” Beverages which the Defendants knew or should have known were no lower or appreciably lower in sodium than other non-“Low Sodium” beverages. nan (f) certifying the following issues as common issues: (1) Are “Low Low Sodium” Beverages from Loblaws lower or appreciably lower in sodium than other, non-“Low Sodium” beverages [soft drinks]? (Amended third time by consent post hearing.) (2) Did the Defendants engage in conduct that constitutes deceptive acts or practices contrary to the application applicable consumer protection or sale of goods legislation, by marketing or selling the Low Sodium Beverages that were advertised as “Low Sodium” but we no lower or not appreciable lower in sodium than, non-“Low Sodium” beverages? [Alterations as they appear on amended application] [7] The plaintiffs have filed the affidavit of Ms. Retallick, David Landry and two affidavits of Rhonda Harper (which are essentially the same). As stated above, the defendants rely on the affidavit of Ms. Casey. II. THE FACTS AS PLED AND ADMITTED [8] As set out above, the plaintiffs admit that the “Low Sodium Products” do in fact have minimal sodium content (See para. 17 of the amended claim). [9] Controversy arose during the hearing as to the extent of the defendants’ admission of para. 16 of the plaintiffs’ amended claim (See para. 2, statement of defence). Paragraph 16 of the amended claim states: 16. PC incorporates messaging on the packaging of some items which denotes them as having “Low Sodium” (the “Low Sodium Label”), including but not limited to the following items (“Low Sodium Products”): Example UPC a) Diet Cola Low Sodium, Caffeine Free (2L) b) Diet Cola Caffeine Free (2L) Caffeine Free (can) c) Diet Cola Caffeine Free (12 pk) Caffeine Free (can) d) PC Club Soda Low Sodium (2L) e) PC Club Soda Low Sodium (can) f) PC Club Soda Low Sodium (12 pk) 15 mg [Emphasis Added] [10] It appears that when defence counsel drafted the statement of defence they understood this paragraph to mean that all of the listed items were indeed labelled “Low Sodium”. Unfortunately, the draftor of the statement of claim did not add the PC brand name to each listed drink nor did he add the description “Low Sodium”. Somehow this led counsel for the plaintiffs to believe there had been an admission by the defendants that the listed drinks were “identical” except one drink was labelled “Low Sodium” and another drink was not. This resulted in the plaintiffs arguing in their brief on summary judgment: 1. The Defendants acknowledge that they have put identical products on the market but labelled these identical products differently. There is expert evidence submitted by the Plaintiffs explaining how this is misleading to consumers. The expert evidence of the Plaintiffs in uncontroverted. 2. The facts are undisputed. manufacturer put two identical products on the market but labelled them differently. Intuitively, it is clear that this is misleading. The only reason to label and market identical products differently is to create the illusion that the identical products are different. 3. While the Defendants have gone to great length to try and confuse the issue, the issue is simple. It is misleading to label identical products differently. (Plaintiffs’ brief re: summary judgment dated August 24, 2015) [11] The reply brief on the summary judgment application filed by the defendants challenged this assertion (paras. 20-23). In my opinion at that stage it should have been apparent to the plaintiffs that no such admission had been made. Despite this the plaintiffs persisted in this interpretation of their para. 16 of the claim and continued to rely on the supposed admission. [12] Clearly the defendants did not intend to make any such admission. The wording used by the plaintiffs in para. 16 of their claim is plain and obvious. Paragraph 16 can only be interpreted to mean all of the drinks (no matter how the plaintiffs chose to describe them) are labelled “Low Sodium”. Again, the wording is: “the packaging of some items which denotes them as having “Low Sodium” (the “Low Sodium Label”), including…”. This can only mean the items listed have the low sodium label. note there are only two types of beverages listed here, Diet Cola Low Sodium Caffeine Free and PC Club Soda that are packaged in different sized beverage containers. This accords with Ms. Casey’s affidavit evidence (See: para. of her affidavit) that there are only two products sold by Loblaws with the low sodium label namely Diet Cola Caffeine Free and PC Club Soda labelled low sodium (although as set out above packaged in different sized containers). Ms. Kendall Lee Mackay’s affidavit supports this as well (see para. of her affidavit). [13] Further, because of this turn of events granted counsel for the plaintiffs 14 days to provide evidence that my understanding is not correct. received nothing. Therefore, am confident that defence counsels’ reading of para. 16 is correct and proper admission was made (i.e. all the listed beverages have the “Low Sodium” label) and the plaintiffs’ argument set out in their brief has no factual basis. III. AFFIDAVIT EVIDENCE Ms. Casey’s Evidence [14] Ms. Casey’s affidavit provides the following uncontroverted evidence: Loblaws produces and markets two “low sodium” products: PC Club Soda Low Sodium and PC Diet Cola Caffeine Free/Low Sodium (para. 5); The Canadian Food Inspection Agency [CFIA] regulates the compositional and labelling standards for all foods sold in Canada. CFIA is governed by the regulations under the Food and Drugs Act, RSC 1985, F-27, the Food and Drugs Regulations, CRC 870 [Food and Drug Regulations] and the Consumer Packaging and Labelling Act, RSC 1985, C-38 (para. 16); Loblaws, using the labelling requirements provided on the CFIA website, ensures all of its food products are correctly labelled in accordance with the Food and Drugs Regulations (para. 17); Labelling food “low sodium” is considered to be “nutrient content” claim under the Food and Drugs Regulations. Nutrient content claims are statements which describe, directly or indirectly, the level of nutrient in specific food or beverage that will permit the manufacturer to make particular claim. Nutrient content claims are permitted, provided that the product meets certain compositional and labelling requirements. The CFIA website specifies labelling requirements for nutrient content claims and also specifies the placement and content of all advisement on food (para. 18); The Food and Drugs Regulations allow manufacturers to label soft drinks as “Low Sodium” if the drinks contain less than 140 mg of sodium per 355 ml. PC Low Sodium Beverages contain approximately 20 mg per 355 ml or 14% of the sodium limit set out by the Food and Drugs Regulations for products labelled as “low sodium”. This amounts to 1/7 of what would be permissible (paras. 19-21); Loblaws requires its vendors to conduct nutrient testing on their products to validate the label information. This is to ensure that the compositional requirements of PC products continue to meet the requirements imposed by the Food and Drugs Regulations (para. 22); The packaging of PC Low Sodium Beverages not only indicates the products are “low sodium” but also includes nutritional facts label that describes the actual amount of sodium in each product. All PC Low Sodium Beverages and all other beverage products sold in Canada by Loblaws’ competitors have such labels/and or packaging (para. 23, exhibit c); Loblaws has never branded or represented PC Low Sodium Beverages as being lower in sodium than other beverages even though they are lower in sodium than many other products made by Loblaws’ competitors. PC Low Sodium Beverages (containing 20 mg of sodium/355 ml) are lower in sodium than many competitors (paras. 26, 28-29, exhibit D); On average the PC Low Sodium Beverages are no more expensive than comparable products and Loblaws does not charge extra for low sodium soft drinks (paras. 32-33). [15] note that Ms. Casey has reviewed the claim. She has senior position at Loblaws that appears directly connected to the type of issues and allegations set forth in the claim. She details her background and indicates her education, employment and oversight role regarding the PC product line. Overall, her evidence was direct, useful and on point. As stated, do not see any of her evidence as being contradicted or diminished in any fashion. Mr. Sandoff [16] Mr. Sandoff did not file an affidavit in response to either the summary judgment application or the certification application. note (as set out above) that para. 19 of the claim states that Mr. Sandoff did not actually buy the soft drink. It appears an unnamed person did. Perhaps that is why we heard nothing more from Mr. Sandoff. Ms. Retallick [17] Ms. Retallick did file an affidavit ostensibly to support the certification application (see para. 32 of her affidavit). She describes purchasing (four days before the amendment to the claim was made) the PC Low Sodium Beverage as follows: She states she purchased Low Sodium Beverage, PC Diet Cola (Caffeine Free) (UPC code 6038378705) confirming para. 20 of her claim (para. of her affidavit); Ms. Retallick goes on to depose (paras. 5-7 of her affidavit): 5. The packaging of the beverage indicated that it was “Low Sodium” Beverage, which suggested that was purchasing beverage that was lower in sodium than beverages that were not labelled as “Low Sodium”. 6. Other similar beverages sold by PC and other manufacturers, available at that store, did not claim to be Low Sodium Beverages. Purchasers would reasonably understand based on the Defendants difference in labelling, that the Purchased Beverage contained less sodium than other PC beverages that did not advertise that they were Low Sodium beverages. 7. did not obtain beverage which was materially lower in sodium content than other beverages that did not have the Low Sodium Label. [18] Defence counsel points out in their brief filed July 27, 2015: 18. It is important to note that Ms. Retallick does not allege that: (a) She purchased the PC Low Sodium Beverages because it was labelled “low sodium”; (b) She was misled by the “low sodium” label; (c) The PC Law Sodium Beverage was higher in sodium than she expected it to be; or (d) The attributes of the product she obtained (as opposed to the relative attributes of competing products) were in any way different from those she had been led to expect. [Emphasis in original] [19] Ms. Harper provided two affidavits for the plaintiffs. The affidavits are essentially the same and need only consider the September 18, 2015 affidavit. [20] Defence counsel critically describes the content of Ms. Harper’s affidavit as follows: 19. The Plaintiffs also rely upon purported expert report from Rhonda Harper. It is important to note that Ms. Harper conducted no independent research or surveys in order to prepare her report. There is no indication that she had spoken to either Plaintiff or single member of the proposed class. The majority of her affidavit summarizes the contents of academic articles about marketing and consumer behaviour. Affidavit of Rhonda Harper, sworn February 20, 2015 (“Harper Affidavit”). 20. In only one paragraph of her affidavit does Ms. Harper purport to give an expert opinion: 18. In the case at hand, it is my expert opinion that the Defendant knowingly leveraged the national awareness campaign for sodium-reduction among Canadians, misrepresented its product as “low-sodium” versus the other in its category and misled consumers into purchasing its product based on this claim. Consumers collectively would expect difference in “low sodium” product from others in the line as being meaninfully [sic] higher in sodium. The messaging is not that it is low, and so are other similar products, but that it is meaninfully [sic] lower. Harper Affidavit, para 18 [Defendants brief filed July 27, 2015] [21] find myself in agreement with this criticism. reading of her exhibited report supports the conclusion that she did not specifically direct her mind in meaningful fashion to the claim, the Canadian statues or regulations or in short, the matters at hand. Her conclusion set out in para. 18 of her affidavit seems to be without proper foundation or basis. Again, defence counsel properly sums this up in their brief: 21. The first sentence of the paragraph quoted above represents conclusion with respect to the ultimate issue in this case, whether Loblaws misled consumers. The closer an expert opinion comes to expressing view with respect to the ultimate issue in case, the more stringently the criteria of reliability and necessity must be applied, as it risks usurping the role of the trier of fact. In this case, Ms. Harper has provided no basis for her conclusion. She has no knowledge of Loblaws’ intentions, yet states that it “knowingly” misrepresented its product. She has not spoken to single consumer of the PC Low Sodium Beverages, yet states that they have been misled. In these circumstances, her opinion can be given no weight. Sekhon, 2014 SCC 15 (CanLII) at paras 43 to 48 and at paras 74 to 76 (dissenting on other grounds) 22. Like the affidavit of Ms. Retallick, however, the balance of this paragraph is significant for what it does not state. Specifically, Ms. Harper does not claim that: (a) Loblaws has made any statement that is not factually accurate; (b) Loblaws has ever stated that the PC Low Sodium Products are “lower” in sodium than any other products or are the “lowest sodium” products available; or (c) Consumers who buy PC Low Sodium Beverages are misled as to the sodium content of the product that they are purchasing, as opposed to mistakenly assuming that certain other products are higher in sodium. [Emphasis in original] [22] Therefore, place little weight in her opinion. There is no evidence that the plaintiffs were misled about the sodium content of the drink they purchased, nor did they rely upon the low sodium label when making the purchase and find they did not suffer any damages. IV. THE ISSUES AND ANALYSIS Is Summary Judgment Appropriately Heard Before Certification? [23] Since there are two applications (the defendants’ application for summary judgment and the plaintiffs’ application for certification) am called upon to determine which application should be considered first. [24] The defendants submit that this case is suitable for summary judgment prior to certification because the facts are not disputed and the determination of single legal issue will decide whether the plaintiffs have tenable cause of action. [25] The defendants state that pre-certification summary judgment application is appropriate if there is no genuine issue for trial because: a. The plaintiffs have failed to show genuine ability to prove one or more factual elements to legal cause of action; b. The complaint lacks legal merit; or c. The defendants have an obvious defence to the claim. [para. 26 of the defendants’ brief on summary judgment dated July 27, 2015] [26] It seems that the plaintiffs are in agreement that this case is suitable for summary judgment and note from their brief filed in response to the summary judgment application: 7. It is very unusual for summary judgment to be suitable in the class action context. This is the one in hundred class action case where summary judgment is suitable. 8. The test for summary judgment is met in this case because the application turns on straight forward question of law and the relevant facts are undisputed. In Hryniak v. Mauldin, 2014 SCC (CanLII) [Hryniak] the Supreme Court of Canada sets out two separate issues to address when considering if summary judgment is appropriate (i) whether genuine issue exists; and (ii) if genuine issue does exist, whether its resolution requires conventional trial. 9. Here there is genuine issue. The genuine issue is whether or not it is misleading to label identical products differently. Although genuine issue exists, its resolution does not require conventional trial…. [Emphasis Added] [27] Unfortunately (for the plaintiffs) it seems they have simply misconstrued their own pleadings and seized upon what they believed (but as stated above, incorrectly) was an admission that then emerged as the singular plank in their case. [28] However, dispute the deflation of this argument, the plaintiffs continued with their defence to summary judgment and with the certification hearing. will quickly add at this point that the plaintiffs’ submission that they should receive summary judgment in favour of their claim is clearly without merit. There is no evidence to support this. will continue with the consideration of the defendants’ application for summary judgment to dismiss the claim. [29] agree with defence counsel that there is considerable authority for this Court to hear summary judgment application prior to the certification application. At this point, wish to note that it is only the named plaintiffs that would be subject to this dismissal. There is no application before me with respect to the claims as class as whole. It would be potentially open for other representative plaintiffs to come forward, by issuing new claim under The Class Actions Act. [30] In Roberts Properties Inc. Saskatchewan Power Corp., 2014 SKQB 245 (CanLII), 453 Sask 115 [Roberts], Justice Dawson granted the defendants’ application to strike claim brought under The Class Actions Act pursuant to former Queen’s Bench Rule 173(a), (c) and (e) prior to certification. The plaintiffs in our case argue that Roberts and Filson Canada (Attorney General), 2014 SKQB 164 (CanLII), 447 Sask 219 [Filson], affirmed 2015 SKCA 80 (CanLII), relied on by the defendants, should be distinguished because there are different Rules in play in those cases than here. agree that the Rules may be different but the principle is the same (i.e. the request to dispose of claim before certification). Accordingly, find Roberts and Filson support the defendants request to have the summary judgment application heard and determined before the certification application is determined. [31] Additionally, note other jurisdictions have allowed summary applications to precede the certification hearing. note Justice Martin’s comments in Stewart Enterprise Universal Inc., 2010 ABQB 259 (CanLII), 489 AR 153 where the court stated: 36 While it may be preferable to deal with most applications at the certification hearing, there are sometimes good and compelling reasons for them to be addressed earlier. Efficiency and judicial economy are important, but they are not the only values. Further, motions taken before the certification hearing may in fact contribute to efficiency, judicial economy by narrowing and streamlining the issues and reducing the number of parties. The Alberta Court of Appeal in Tottrup v. Alberta (Minister of Environment), 2000 ABCA 121 (CanLII), 255 A.R. 204 at para. emphasized that robust rules are required for pretrial applications that seek to resolve claims. While that case did not involve the CPA, robust rules ensure plaintiffs have valid causes of action that are properly plead, which both operate to conserve court resources. 37 In addition, it is essential that the process is fair to all parties. In Dutton at para. 26 the Supreme Court noted the important role class actions play in today's world, but also stated that "[t]he class action offers means of efficiently resolving such disputes in manner that is fair to all parties." nan 39 Numerous factors will bear on the exercise of discretion and the assessment of efficiency, economy and fairness. Among them is how quickly the matter is proceeding and whether the certification hearing is being pursued in accordance with the presumptive time lines in the legislation. Defendants in potential class-action have at least the same interest as defendants in individual actions in the timely resolution of disputes. The Rules of Court provide defendants with variety of tools to address claims made against them and defendants ought to remain free to choose the timing of their applications as part of their general ability to advance their case. While first past the post system is not the answer, as it values form and speed over substance, plaintiff concerned with litigation by instalments may help forestall that possibility by making an application for certification within the suggested time frame. (See also: Jackson Canadian National Railway, 2013 ABCA 440 (CanLII), [2014] WWR 427; Player Estate Janssen-Ortho Inc., 2014 BCSC 1122 (CanLII) at para 174; and P. (W.) Alberta, 2014 ABCA 404 (CanLII), [2015] WWR 430). [32] Accordingly, I am quite comfortable in following this judicial authority and determining the defendants’ summary judgment application prior to having to decide the plaintiffs’ application for certification. Defendants’ Application for Summary Judgment [33] The applicable Queen’s Bench Rules are: 7-2 party may apply, with supporting affidavit material or other evidence, for summary judgment on all or some of the issues raised in the pleadings at any time after the defendant has filed statement of defence but before the time and place for trial have been set. 7-5(1) The Court may grant summary judgment if: (a) the Court is satisfied that there is no genuine issue requiring trial with respect to claim or defence [34] Regarding Rule 7-5(1)(a) (i.e. genuine issue) Justice Karakatsanis in Hryniak Mauldin, 2014 SCC (CanLII), [2014] SCR 87 stated: 49 There will be no genuine issue requiring trial when the judge is able to reach fair and just determination on the merits on motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is proportionate, more expeditious and less expensive means to achieve just result. [35] Justice Barrington-Foote in Tchozewski Lamontagne, 2014 SKQB 71 (CanLII), 440 Sask 34 [Tchozewski] writes: 30 The central question posed on Rule 7-2 application, accordingly, is whether summary judgment will achieve what Karakatsanis J. calls (at para. 28) the "principal goal", and Popescul C.J.Q.B calls "the overarching consideration" (at para. 49, Pervez): that is, fair process that results in just adjudication of the dispute before the court. The answer to this question calls for an analysis of the affidavit and other evidence presented and the issues raised by the application, in the context of the litigation as whole. In Hyrniak, Karakatsanis J. breaks that analysis down into discrete steps and key principles "roadmap" based on the various elements of the summary judgment rules. In brief, the key elements of that roadmap, in the context of Rule 7-2 application, are as follows: nan 3. The issue is not whether the summary judgment process is as thorough or the evidence is as complete as at trial. It is whether the judge is confident he or she can find the facts and apply the relevant legal principles so as to fairly resolve the dispute. If the judge has that confidence, proceeding to trial is generally not proportionate, timely or cost effective. process that does not give the judge confidence in his or her conclusions, on the other hand, is never proportionate. (Hryniak, paras. 50 and 57) [36] The Tchozewski case provides “roadmap” to be used in summary judgment cases (see para. 30). [37] I find the following facts are not in dispute (i.e. the plaintiffs have not provided contrary evidence and I accept evidence provided by the defendants): i. The plaintiffs acknowledge that the PC Low Sodium Beverages contain minimal sodium (Ms. Casey’s evidence is that they contain 14% of the sodium permitted); ii. The plaintiffs have not provided evidence that Loblaws made any comparative claims stating that its PC Low Sodium Beverages were lower in sodium than any other beverages whether they were made by Loblaws or competitors; iii. The plaintiffs have not contradicted or challenged Ms. Casey’s evidence that all PC Low Sodium Beverages sold in Canada (as well as any competing beverages) have nutritional label setting out the amount of sodium the beverage contains for the consumer to read. [38] Loblaws correctly submits (p. 12 of the defendants’ brief of law for summary judgment): (d) The Plaintiffs have led no evidence that: (i) The Plaintiffs personally were misled in any way by the “low sodium” label; (ii) Any consumers were misled as to any of the attributes of the PC Low Sodium Beverages (as opposed to the relative attributes of competing products); (iii) The Plaintiffs relied upon the “low sodium” representation when purchasing the PC Low Sodium Beverages; or (iv) The Plaintiffs have suffered any damages. [39] have come to the same conclusion as the defendants when they state: 41. In light of this substantial agreement between the parties, the only issue in this action, and on this application, is whether reasonable customer would be misled by “low sodium” label about the attributes of product so labelled. This is legal question to be decided on an objective standard. [Defendants’ brief dated July 27, 2015] [40] Defence counsel in their brief examined this issue and submit: 42. While the Plaintiffs assert several different causes of action in the Statement of Claim, there is considerable overlap among the elements required to establish each claim. In particular, each one requires the Plaintiffs to prove one or more of the following: (a) That the “low sodium” label is inaccurate (i.e. that Loblaws has made “False Representation”); (b) That reasonable customer would have been misled by the “low sodium” label into believing that the PC Low Sodium Beverages were lower in sodium than competing products and that this would have caused the customer to be misled about the attributes of the PC Low Sodium Beverages (i.e. that Loblaws has made “Misleading Representation”); and (c) That the Plaintiffs relied upon the “low sodium” label to their detriment and suffered damages as result (i.e. that the Plaintiffs have suffered “Damages”). 43. Based upon uncontroverted evidence on this motion, the Plaintiffs cannot establish any of these elements and the Statement of Claim raises no genuine issue requiring trial. [Defendants’ brief dated July 27, 2015] [41] Again, agree with and come to the same conclusion as defence counsel that: The plaintiffs have not proven the “low sodium” label is inaccurate; There was no misleading representation about PC Low Sodium Beverages. It appears plaintiffs’ counsel offers the novel argument that because Loblaws competitors do not label their beverages as “low sodium” that results in consumers being misled by Loblaws. cannot accept this premise. Surely truthfully and accurately labelling your product (even though your competitor chooses not to) does not mean you are misleading anyone. Again, note it was the cornerstone of the plaintiffs’ claim that identical products were labelled differently (i.e. one saying low sodium and the other identical product not so labelled). can envision how that may potentially be misleading, but this is not the case before me (see above para. 12). find that there was nothing misleading about the packaging complained of; Consumers could have checked the nutritional labels in any event to read the sodium levels and used their own common sense to make informed decisions; and • There is no evidence that either plaintiffs (or for that matter any member of the proposed class) suffered any damages as a result of purchasing the PC Low Sodium Beverages. The plaintiffs bought what they expected (or could reasonably expect) to receive: low sodium beverage at essentially the same price as other soft drinks. [42] have set out above my finding that there is no genuine issue regarding trial. However, because the plaintiffs pled broad range of statutory breach allegations (although perhaps reducing their claim in the amended notice of application for certification) will go through these claims. Alleged Breach of the Food and Drugs Act or the Consumer Packaging and Labelling Act [43] The plaintiffs alleged that Loblaws breached the Food and Drugs Act, the Food and Drugs Regulations and the Consumer Packaging and Labelling Act. [44] The Food and Drugs Act states in s. 5(1): 5. (1) No person shall label, package, treat, process, sell or advertise any food in manner that is false, misleading or deceptive or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit or safety. [45] The Consumer Packaging and Labelling Act provides in s. 7(1): 7. (1) No dealer shall apply to any prepackaged product or sell, import into Canada or advertise any prepackaged product that has applied to it label containing any false or misleading representation that relates to or may reasonably be regarded as relating to that product. [46] find that the plaintiffs’ claims cannot succeed under the above statutes. The “low sodium” label on the PC Low Sodium Beverages is neither false representation, misleading representation or deception. As found above: the sodium content meets the requirements to be properly called “low sodium” and in fact is about 1/7 of the maximum level. Alleged Breach of the Competition Act [47] The plaintiffs plead s. 36 and 52 of the Competition Act. In reverse order, the statue provides: 52. (1) No person shall, for the purpose of promoting, directly or indirectly, the supply or use of product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make representation to the public that is false or misleading in material respect. nan 36. (1) Any person who has suffered loss or damage as result of (a) conduct that is contrary to any provision of Part VI, or… may, in any court of competent jurisdiction, sue for and recover from the person who engaged in the conduct or failed to comply with the order 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. [48] Accordingly, s. 52(1) creates quasi-criminal offence and s. 36(1) creates civil right of action. To be successful, the plaintiffs must show: i. Loblaws committed the offence described in s. 52 of the Competition Act; ii. The plaintiffs reasonably relied upon their misrepresentation; and iii. The plaintiffs suffered damages as result (See Magill Expedia Canada Corp., 2010 ONSC 5247 (CanLII) at para 108). [49] find that the plaintiffs claim under the Competition Act cannot succeed because: As set out above the “low sodium” label when attached to PC Low Sodium Beverages is neither false representation nor misleading representation; Ms. Casey’s evidence establishes that Loblaws carefully informs itself of the regulations and indeed follows these directions. There is no evidence that the defendants acted “knowingly or recklessly” in labelling the PC Low Sodium Beverages as “low sodium”. Therefore, any claim arising out of s. 52 of the Competition Act would be dismissed; Reasonable reliance is requirement for successful claim under s. 36 of the Competition Act. The plaintiffs seem to concede there was no “reliance” in this case and thereby dropped their claim in negligence. However beyond that, find that no reasonable person could have relied upon the “low sodium” label to conclude that the PC Low Sodium Beverages had characteristics different from those that the product actually has. Therefore, there is no prospect that claim under s. 36 of the Competition Act could have succeeded; As set out above the plaintiffs have not proven they have suffered any damages which is also required under s. 36 of the Competition Act; Additionally, Wakelam Johnson Johnson, 2014 BCCA 36 (CanLII) at paras 90-92, [2014] WWR 7, establishes that s. 36 of the Competition Act provides the exclusive remedy for breaches of s. 52 of the Competition Act. Therefore, the plaintiffs have no right to seek restitutionary remedies (such as unjust enrichment) for breaches of the Competition Act. Alleged Breaches of Consumer Protection Legislation [50] The plaintiffs claim that Loblaws has violated number of pieces of consumer protection legislation (See paras. 43-51 of the amended claim). These statutes are listed in para. 43 of the claim as: 43. The Plaintiffs pleads and relies rely on the provisions of consumer protection legislation in jurisdictions across Canada (collectively, “Consumer Protection Legislation”) including” a. Business Practices and Consumer Protection Act, S.B.C. 2004, c.2 (“BC BPCPA”); b. Fair Trading Act, R.S.A. 2000 c. F-2, as am (“AB FTA”); c. The Consumer Protection Act, SS 1996, c. C-30.1, as am. (“SK CPA”); d. The Business Practices Act, C.C.S.M., B-120, as am. (“MB BPA”); e. Consumer Protection Act, 2002, S.O. 2005, c. 30, Sched. A., as am. (“ON CPA”); f. Consumer Protection Act, R.S.Q. c. P-40.1, as am. (“QC CPA”); g. Consumer Product Warranty and Liability Act, S.N.B. 1978, c. C-18.1 (“NB CPWLA”); h. Business Practices Act, R.S.P.E.I. 1988, c. B-7, as am. (“PEI BPA”); and i. Consumer Protection and Business Practices Act, SNL 2009, C-31.1 (“NFLD CPBPA”). [Alteration as it appears in amended claim] [51] find that all of the above statutes require the plaintiffs to prove that the supplier has made representation that was untrue, deceptive or misleading. For the reasons already provided, these claims under these Acts cannot succeed. Additionally, reading of the cited British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador statutes reveals the plaintiffs would have to establish that they have suffered damages or loss as result of the violation of the applicable Acts. have already found that the plaintiffs have not provided any evidence of this. [52] The plaintiffs seem to cling to the Business Practices and Consumer Protection Act, SBC 2004, of British Columbia arguing “reliance” is not required in British Columbia under s. 172 of that Act (See tab of the plaintiffs’ extracts of argument). However, that argument fails. Defence counsel skilfully took the court through series of cases in oral argument regarding this issue. accept the answer to this issue as set out in the defendants certification brief at para. 81. similar requirement applies under sections 171 and 172(3)(a) of British Columbia’s Business Practices and Consumer Protection Act. It has been held in number of cases that claims under section 171 require proof of individual reliance, causation and loss. Claims under section 172(3), by contrast, are of public nature, and not intended primarily to provide individual remedies. While section 172(3)(a) of the Act permits court to order supplier to restore money to person in the case of certain contraventions of that Act or its regulations, such order are only available if the plaintiff can establish: (i) the existence of constructive trust over an identifiable fund of money; or (ii) that they have personally suffered loss or damage cognizable in law. The Plaintiffs in this case cannot establish either requirement. Any revenues earned by Loblaws from the sale of PC Low Sodium Beverages will have been comingled with other funds, and the Plaintiffs have failed to plead that they have suffered compensable damages as result of the marketing of these products as “low sodium”. Clark Energy Brands Inc., 2014 BCSC 1891 (CanLII), at paras 41, 47 and 126. Ileman at paras 52 and 60 to 61; Wakelam at para 69. [53] Therefore, have concluded that there is no genuine issue requiring trial regarding: i. Any alleged breach of the Food and Drugs Act, or the Consumer Packaging and Labelling Act by Loblaws; ii. Any alleged breach of the Competition Act by Loblaws; and iii. Any alleged breach of any applicable consumer protection legislation by Loblaws. Waiver of Tort, Unjust Enrichment, and Punitive and Exemplary Damages [54] have grouped these claims here and find that none would apply or could be sustained in this claim. particularly note the claim for punitive or exemplary damages has no basis. Ms. Casey’s affidavit sets out that Loblaws mindfully followed the regulations as prescribed. cannot see how they could be held accountable for punitive or exemplary damages. Conclusion Regarding Summary Judgment Application [55] The plaintiffs seem to have placed all of their eggs in one basket when they boldly declared: “it is misleading to label identical products differently”. This was not in any way supported by their pleadings or any affidavit evidence. On that basis alone the summary judgment dismissing their claim should be granted. There is simply no genuine issue requiring a trial. However, have gone through the claim of the plaintiffs and found that none of the claims pled or found in the notice of application for certification ultimately produce genuine issue for trial. Following Justice Barrington-Foote’s comments in Tchozewski, find that am confident that have found the facts and applied the relevant legal principles and can fairly resolve the dispute on the basis of the materials before me. Proceeding to trial is not necessary and would not be proportionate, timely or cost effective. Therefore, I grant the defendants’ application for summary judgment dismissing the plaintiffs’ entire claim. Application for Certification [56] Since I have granted the defendants’ summary judgment application, I do not need to decide the plaintiffs’ application for certification. To complete this matter, because the plaintiffs’ claim is dismissed, I must therefore dismiss the application for certification as well and so order. [57] The defendants claim costs for their summary judgment application. They have been successful. The parties have made extensive comment in their briefs regarding costs. This seems to have been top of mind for all counsel. recognize the cost issue applies to both the summary judgment application and the dismissed certification application that heard. [58] am guided by the recent decision of Justice Schwann in Harvey Western Canada Lottery Corp., 2015 SKQB 102 (CanLII), [2015] WWR 391 where she states: 64 There is strong appellate authority in support of the proposition that s. 40 of the CAA does not prohibit an award of costs on pre-certification applications. (Alves 116; Englund v. Pfizer Canada Inc., 2007 SKCA 62 (CanLII), 299 Sask. R. 298 (Sask. C.A.)) 65 Roberts Properties Inc. v. Saskatchewan Power Corp., 2014 SKQB 245 (CanLII) (Sask. Q.B.) is the most recent decision where this issue arose. Following thorough overview of appellate level cases on this issue, Dawson J. reaffirmed the principle that s. 40 of the CAA does not preclude an award of costs on motion to strike which she found not directly connected to the certification application. Instead, the application to strike was subject to the general rules in relation to awarding costs. She said at para. 92 Although the reasoning in Campbell, supra, is interesting, the Saskatchewan jurisprudence establishes that s. 40 of The Class Actions Act does not operate to prohibit an award of costs, where separate application is considered by the court prior to certification, even if they are argued at the same time. In the Alves trilogy (2011 SKCA 116, 2011 SKCA 117 (CanLII) and 2011 SKCA 118 (CanLII)), there were several applications in the larger context of class action proceeding that were heard before the certification application, but after the motion or certification was filed and served, and while the certification motion was before the court. Justice Richards made it clear that s. 40 did not constitute bar to awarding costs in such circumstances. [Emphasis added] 66 The within application is clearly pre-certification and not directly tied to the certification hearing. Accordingly, applying the prevailing jurisprudence, s. 40 of the CAA is not an impediment to an award of costs. [59] Accordingly, see no reason why the defendants (Loblaws) should not receive their costs for their successful summary judgment application and so order. In regards to the certification hearing, prefer not to order any costs although that application was heard in its entirety. do note that the plaintiffs abandoned major plank in their claim (negligence) after hearing the oral presentation of defence counsel. However, despite this, have decided not to order costs for the certification application.
HELD: The court granted summary judgment for the defendants. It held that it could determine the defendants’ application prior to the plaintiffs’ application for certification. The court found that the facts were not in dispute and there was no evidence that the plaintiffs or any members of the proposed class had suffered any damages. The plaintiffs’ argument that it was misleading to label identical products differently was not supported by their pleadings or any affidavit evidence. There was no genuine issue requiring a trial. The court reviewed the various alleged breaches of statute and dismissed them. It was not necessary to decide the application for certification.