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CIVIL PROCEDURE - Class or representative actions - Common interests and issues - Pleadings

Monday, June 08, 2020 @ 9:42 AM  


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Appeal by the defendant from certification of the respondent’s action as a class proceeding. The respondent purchased medical cannabis from the appellant containing unauthorized pesticides. The respondent experienced symptoms of nausea and vomiting after first consuming the cannabis which only stopped after she discontinued that use. The appellant notified Health Canada and the cannabis was recalled.  The respondent then commenced the present action for claims under the Competition Act, Food and Drugs Act, the Sale of Goods Act, waiver of Tort, and unjust enrichment for general damages for adverse health effects. The appellant argued the judge was wrong to find that the pleadings disclosed a cause of action for negligent design, development and testing, breach of the Competition Act, and unjust enrichment. The appellant only appeals those portions of the certification order that allowed common issues to proceed on the adverse health consequences claims. It argued there was no evidence that its cannabis caused any adverse health effects nor was there any workable methodology for establishing any causal connection between its cannabis and the symptoms complained of in this case.

HELD: Appeal allowed in part. The causes of action were adequately pleaded except for unjust enrichment. The judge read the respondent’s pleading on negligent design, development and testing very generously. The judge erred on the side of liberality and caution. It was not plain and obvious that the allegations of negligent design, development and testing were unsustainable. The allegations in the context of the other pleas of negligent design, manufacture, and sale of cannabis containing unauthorized pesticides adequately describe alleged breaches of the Competition Act for pleading purposes. The respondent pleaded facts material to a breach of contract. Those facts, however, could not simultaneously sustain an unjust enrichment claim. Where the respondent explicitly referred to unjust enrichment, she failed to plead facts material to that claim. The pleaded facts supported a claim in contract, not unjust enrichment. The claim for unjust enrichment was struck. The judge erred in principle in certifying a claim with a generic heading of damage of adverse health consequences not susceptible to a common causation determination. She made clear and material errors of fact regarding whether the respondent’s expert methodology can establish general causation at trial. The wide array of common, generic and transient symptoms described by the appellant were not capable of a common cause determination. The question was whether the chemicals present in the appellant’s cannabis could in principle cause the adverse health effects described or pleaded by the appellant. The respondent’s expert methodology for determining general causation did not address the facts. The common issues of standard of care and breach of that standard dealing with negligent design, development and testing, negligent manufacturing, negligent distribution, marketing and sale all failed as common causes. The judge’s preferability finding assumed that general causation, standard of care and breach could all be established as common issues. Since she erred in her consideration of the evidence when making her common issue findings, her conclusion on preferability was similarly erroneous.

Organigram Holdings Inc. v. Downton, [2020] N.S.J. No. 170, Nova Scotia Court of Appeal, D.P.S. Farrar, J.E. Fichaud and P. Bryson JJ.A., April 30, 2020. Digest No. TLD-June82020002