Décision

Wilkinson c. Coca-Cola Ltd.

2014 QCCS 2631

 

SUPerior COURt (Class actions division)
CANADA
PROVINCE OF QUEBEC
DISTRICT OF			MONTREAL
N :		500-06-000559-118
DATE :	June, 11 2014
PRESIDING : THE HONOURABLE MICHELINE PERRAULT, J.S.C.
JOSHUA WILKINSON
Petitioner
vs
COCA-COLA Ltd.
-and-
ENERGY BRANDS Inc.
Respondents
JUDGMENT

 

I.              Introduction

[1]           Petitioner is asking for authorization to institute a class action on behalf of the following group :

“all residents in Canada (excluding B.C. and Alberta residents) who have purchased the drink Glacéau Vitaminwater, or any other group determined by the Court;

Alternately (or as a sub-class)

all residents in Québec who have purchased the drink Glacéau Vitaminwater, or any other group to be determined by the Court; “

[2]           Petitioner seeks the following remedies: (1) compensatory damages, (2) injunctive relief, and (3) punitive damages (the “Motion”).

 

II.            General Facts and Proceedings

[3]           Respondent Coca-Cola Ltd. is a Canadian company and a subsidiary of the American company, The Coca-Cola Company.

[4]           Respondent Energy Brands Inc. is an American company that does business under the trade-name “Glacéau”. In June 2007, The Coca-Cola Company purchased Energy Brands Inc. and its full range of enhanced water brands, including Vitaminwater.

[5]           Respondent Coca-Cola Ltd. is responsible for developing and marketing Glacéau Vitaminwater (“Vitaminwater”) throughout Canada, including the Province of Québec. Vitaminwater was launched in Canada in June 2008. Neither Coca-Cola Ltd. or Glacéau sell Vitaminwater directly to consumers in Canada.

[6]           In addition to Petitioner’s allegations, the Court has also relied on the following evidence adduced in the record :

1)        the labels of each flavour of Vitaminwater (Exhibit R-1),

2)        print-outs from the website www.vitaminwatercanada.ca regarding each flavour of Vitaminwater (Exhibit R-2),

3)        Class Action Complaints and Statements of Claim instituted in the United States with respect to Vitaminwater (Exhibits R-3, R-3A and R-3B),

4)        Statement of Claim of Class Action instituted in Alberta with respect to Vitaminwater (Exhibit R-4),

5)        a list of individuals who have registered on the website of the law firm representing Petitioner (Exhibit R-5), 

6)        the transcripts of Petitioner’s deposition and his affidavit dated November 18, 2012 (Exhibit D-1),

7)        the affidavit of Ms. Laura Cutsey, Director of Marketing for Vitaminwater, smartwater and Dasani at Coca-Cola Ltd., dated June 7, 2013 (Exhibit D- 4), and

8)        the new labels of the Vitaminwater products (Exhibit D-5).

 

[7]           Furthermore, Petitioner has identified, in his legal argument, the statutory grounds for his claim:

 

 

i)          Sections 41, 215, 216, 218, 219, 220, 221, 228, 239, 253, 270 and 272 of the Consumer Protection Act[1];

ii)         Sections 36 and 52 of the Competition Act[2];

iii)       Sections 1400, 1401, 1407, 1457, 1621 and 3148 of the Civil Code of Quebec;

iv)        Section 751 of the Code of Civil Procedure.

 

III.           Summary of the Parties’ Positions

[8]           Petitioner contends, in a general manner, that Respondents have misled consumers into purchasing Vitaminwater by misrepresenting its sugar content and health benefits. Petitioner’s specific allegations are found at paragraphs 5 through 15 of the Motion and will be analysed below. Petitioner also alleges that had he been aware of the amount of sugar in Vitaminwater, he would not have purchased it or paid a premium price for it.

[9]           Respondents argue that the class action cannot succeed because the facts alleged by Petitioner are inaccurate or false; so vague and general as to be meaningless; and/or do not establish an arguable case against Respondents. 

 

IV.          Analysis of the conditions for authorization

[10]        Articles 1002 and 1003 C.C.P. provide as follows:

“1002. A member cannot institute a class action except with the prior authorization of the court, obtained on a motion.

The motion states the facts giving rise thereto, indicates the nature of the recourses for which authorization is applied for, and describes the group on behalf of which the member intends to act. It is accompanied with a notice of at least 10 days of the date of presentation and is served on the person against whom the applicant intends to exercise the class action; the motion may only be contested orally and the judge may allow relevant evidence to be submitted.

 

 

 

 

1003. The court authorizes the bringing of the class action and ascribes the status of representative to the member it designates if of opinion that:

(a) the recourses of the members raise identical, similar or related questions of law or fact;

(b) the facts alleged seem to justify the conclusions sought;

(c) the composition of the group makes the application of article 59 or 67 difficult or impracticable; and

(d) the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately.”  

 

1) Article 1003(b) C.C.P. The facts alleged seem to justify the conclusions sought

[11]        The Supreme Court in Infineon Technologies AG v. Option consommateurs[3] and Vivendi Canada Inc. c. Dell’Aniello[4] stated once again that at the authorization stage Petitioner need only establish a “prima facie case” or an “arguable case”. It also confirmed that the Court’s role at the authorization stage is to “screen motions to ensure that defendants do not have to defend against untenable claims on the merits”. Furthermore, the Court should not delve into the merits of the dispute.

« [37] L’étape de l’autorisation permet l’exercice d’une fonction de filtrage des requêtes, pour éviter que les parties défenderesses doivent se défendre au fond contre des réclamations insoutenables : Infineon Technologies AG c. Option Consommateurs, 2013 CSC 59, par. 59 et 61. Par contre, la loi n’impose pas au requérant un fardeau onéreux au stade de l’autorisation; il doit uniquement démontrer l’existence d’une «apparence sérieuse de droit », d’une «cause défendable» : Infineon, par. 61-67; Marcotte c. Longueuil (Ville), 2009 CSC 43, [2009] 3 R.C.S. 65, par. 23. En conséquence, le juge doit simplement déterminer si le requérant à démontrer que les quatre critères énoncés à l’art. 1003 C.p.c. sont respectés. Dans l’affirmative, le recours collectif est autorisé. La Cour supérieure procède ensuite à l’examen du fond du litige. Ainsi, lorsqu’il vérifie si les critères de l’art. 1003 sont respectés au stade de l’autorisation, le juge tranche une question procédurale. Il ne doit pas se pencher sur le fond du litige, étape qui s’ouvre seulement après l’octroi de la requête en autorisation : Infineon, par. 68; Marcotte, par. 22. » (Emphasis added)

 

 

[12]        As indicated by the Court of appeal in Union des consommateurs c. Bell Canada in exercising this “fonction de filtrage”, the allegations are assumed to be true and the Court must take into account the exhibits and/or the depositions filed in the record[5] :

«[88] L’examen de la requête à la lumière de cette condition constitue en quelque sorte un mécanisme de filtrage et de vérification. Il s’agit d’écarter les recours frivoles ou manifestement mal fondés. L’examen se fait à partir de la cause d’action du membre désigné, en l’occurrence madame Raphaël. Les faits allégués dans la requête sont tenus pour avérés; le juge doit toutefois prendre en considération les pièces produites au dossier et tenir compte des interrogatoires versés au dossier. Lorsque plusieurs causes d’action distinctes sont alléguées, l’examen de la qualité des syllogismes juridiques se fait séparément afin de déterminer si la personne désignée présente une apparence de droit à l’égard de chacun. Au stade de l’autorisation, le fardeau du requérant n’en est pas un de preuve prépondérante; il lui suffit de faire la démonstration d’un syllogisme juridique qui mènera, si prouvé, à une condamnation. Son fardeau en est donc un de logique et non de preuve.» (Emphasis added)

[13]        However, accepting allegations as true only applies to allegations of fact. Opinions, arguments, inferences or unsupported hypotheses, or allegations that have been disproven by the evidence in the record, are open to challenge and cannot be taken as averred[6]:

 

[30] Bien qu'à ce stade les faits allégués dans la requête soient tenus pour avérés, le juge de la Cour supérieure devait également prendre en considération le témoignage reçu et les pièces dont celles produites par l'intimée. Son évaluation des conditions de l'article 1003 C.p.c. s'effectuait en fonction de ces différents éléments.

[…]

[38] Au stade de l'autorisation, le juge doit élaguer le texte de la requête des éléments qui relèvent de l'opinion, de l'argumentation juridique, des inférences ou hypothèses non vérifiées ou encore qui sont carrément contredites par une preuve documentaire fiable.

[14]        Furthermore, allegations are no longer accepted as true if they are improbable or implausible [7] :

 

 

[28]          Dans le cadre de l'évaluation de l'apparence sérieuse de droit, les allégations de faits ne peuvent être tenues pour avérées si elles sont contredites par d'autres éléments de preuve du dossier ou encore que ces allégations semblent invraisemblables ou non plausibles.

[15]        Although Petitioner has a lighter burden at the authorization stage, one of demonstration and not of proof, the demonstration required means that all the allegations and the produced or adduced evidence support the facts that will justify the conclusions sought. It is not sufficient to make a mere affirmation that would be vague, general or imprecise[8].

[16]        In other words, a class action should not be authorized if the allegations, taken to be true, do not disclose an arguable case in light of the facts alleged and the applicable law.

[17]        In order to determine whether the facts alleged by Petitioner justify the conclusions sought, the Court must first determine the nature of the proposed class action. In the present case, Petitioner seeks a monetary compensation. Therefore the facts alleged will justify the conclusions sought if they support the following elements: fault, prejudice and causation.

[18]        The Court will now examine the factual basis of Petitioner’s class action.

 

a) Fault

[19]        At paragraph 5 of the Motion Petitioner alleges:

“5. Vitaminwater has created a public appearance of being a healthier alternative to sugary soft drinks and a good source of dietary supplements.  This message is deceptive, misleading, false, and unfair. Vitaminwater is a “sugar-sweetened beverage” that is little different from Coke or other soft drinks, except that it is fortified and uncarbonated;”

 

[20]        Petitioner testified during his out of court deposition that the advertising that he refers to in the proceedings is found on the bottle i.e. the labels. Petitioner has filed the labels for each of the Vitaminwater flavours[9]. These labels show that each flavour of Vitaminwater contains significant amounts of vitamins and minerals, which are dietary supplements. Petitioner also admitted as much during his out of court deposition[10]:

” Q- What… what advertising are you referring to in the proceedings, do you know?

A- Apparently, it’s supposed to be a healthier alternative.

Q- That’s what you said. But I’m asking what advertising are you referring to?

A- The bottles.

Q- Okay.

A- Advertising where it generally is. Everywhere else that you see vitamin water it’s usually pretty well identified as … as a better alternative of something healthy. It’s nutrients for your body. No doubt there are nutrients, but there are … are other stuff that’s included in vitamin water that are not …” (Emphasis added)

[21]        Thus, the record shows that Vitaminwater is more than a “sugar-sweetened beverage”.

[22]        Petitioner’s primary complaint concerns the presence of sugar in Vitaminwater, which he considers equivalent to the sugar content of Coke or other soft drinks, and unhealthy.

[23]        Firstly, there is no allegation that Respondents marketed Vitaminwater as a sugar-free beverage. In fact, the record shows that the labels on bottles of Vitaminwater indicate that it contains sugar, although in an undisclosed quantity, as will be explained below. Secondly, in her affidavit, Laura Cutsey establishes that Vitaminwater has up to 56% less calories and up to 55% less sugar by volume than other beverages such as Coca-Cola, Sprite and Nestea[11].

[24]        Therefore, the allegations at paragraph 5 of the Motion are contradicted by the exhibits filed in the record and cannot be taken to be true.

[25]        At paragraph 6 of the Motion, Petitioner alleges:

“6. Vitaminwater is promoted as a “Nutrient Enhanced Water Beverage” and proclaimed as “vitamins + water = all you need” (taken from the labelling). The truth is, however, that Vitaminwater does not consist of solely vitamins and water, rather it contains 33 grams of sugar, which is almost as much sugar as contained in a can of Coke;”

 

[26]        Firstly, Petitioner admitted at the hearing that the slogan “vitamins+water=all you need” has never been used on labels of Vitaminwater in Canada. Secondly, as appears from the labels filed by Petitioner and as admitted by Petitioner, Vitaminwater is a nutrient enhanced water beverage. Thirdly, as appears from the labels filed by Petitioner, Vitaminwater does not purport to be made of solely vitamins and water. Sugar is listed, among other things, as a non-medicinal ingredient. Fourthly, as mentioned in Laura Cutsey’s affidavit, Vitaminwater contains 55% less sugar by volume than Coca-Cola.

[27]        Therefore, the allegations at paragraph 6 of the Motion are contradicted by the exhibits filed in the record, as well as by Petitioner’s admission, and cannot be taken to be true.

[28]        At paragraph 7 of the Motion, Petitioner alleges :

“7. In short, Vitaminwater is just fortified sugar water;”

 

 

[29]        The record shows this allegation is also false.

[30]        At paragraphs 8 and 9 of the Motion, Petitioner alleges :

“8. There are currently nine (9) flavours of Vitaminwater sold in Canada, including Quebec, namely:

 

- Defense

- Energy

- Essential

- Focus

- Formula 50

- Mega C

- Multi-V

- Restore

- XXX

 

7.  Each of these flavours is accompanied by a purported health benefit of drinking that particular beverage.  A copy of the labels of each flavour and a print out from the website www.vitaminwatercanada.ca are attached hereto as if recited at full length, produced herein as Exhibits R-1 and R-2, respectively;”

 

[31]        The facts alleged in these paragraphs were admitted by Respondents. However, they do not constitute allegations of fault.

[32]        At paragraphs 10 of the Motion, Petitioner alleges :

“10. However, in reality, Vitaminwater is simply a fortified snack food that due to its sugar content contributes to, among other health problems, weight gain, obesity, and diabetes;”

 

[33]        The Supreme Court in Infineon stated that supporting evidence is necessary even if the burden of proof is one of demonstration[12] :

"[94] Toutefois, l’argumentation des appelantes ne tient pas compte de la nature de la procédure d’autorisation du recours collectif.  L’intimée n’est pas tenue, en effet, de présenter une preuve absolue de l’allégation, ni même d’établir celle-ci selon la prépondérance des probabilités.  À la présente étape, elle démontre que sa cause est défendable au moyen d’allégations et d’éléments de preuve en appui.  La simple allégation de répercussions économiques indues, énoncée au par. 2.14 de la requête en autorisation, ainsi que les pièces démontrant les effets d’un comportement aux États-Unis sur les prix de la DRAM sur le marché international, permettent de conclure à l’existence de répercussions sur le marché canadien satisfaisant à l’exigence de ce seuil de preuve peu élevé. Bien qu’on ne sache pas exactement si l’intimée sera éventuellement en mesure de répondre lors du procès à la norme de preuve selon la prépondérance des probabilités, nous ne pouvons lui refuser cette possibilité puisque les pièces au dossier révèlent qu’une faute a peut-être été commise. 

 

[...]

 

[134] À elles seules, ces simples allégations seraient insuffisantes pour satisfaire à la condition préliminaire d’établir une cause défendable.  Bien que cette condition soit relativement peu exigeante, de simples affirmations sont insuffisantes sans quelque forme d’assise factuelle. Comme nous l’avons déjà souligné, les allégations de fait formulées par un requérant sont présumées vraies.  Mais elles doivent tout de même être accompagnées d’une certaine preuve afin d’établir une cause défendable. Or, l’intimée a présenté une preuve, aussi limitée qu’elle puisse être, à l’appui de ses affirmations.  Ainsi, les pièces attestent l’existence d’un complot visant la fixation des prix et de ses effets internationaux, qui ont été ressentis aux États-Unis et en Europe. À l’étape de l’autorisation, ces répercussions internationales apparentes du comportement anticoncurrentiel allégué des appelantes suffisent pour inférer que les membres du groupe auraient subi le préjudice allégué. " (Emphasis added)

 

[34]        The Court of appeal recently affirmed these principles in Fortier v. Meubles Léon ltée[13] :

« [68] Le législateur a, il est vrai, assujetti le recours collectif à un mécanisme de filtrage. Si la Cour suprême n’a pas abaissé les seuils légal ou de preuve pour satisfaire aux exigences de cette disposition, elle ne les a pas non plus relevés. Que ces seuils soient peu élevés, ils doivent néanmoins être franchis.

[69] Le juge autorisateur doit adopter, il est vrai, une démarche analytique souple, mais encore faut-il que les allégations de la requête ne participent pas uniquement de généralités. En effet, plus l’allégation est générale, moins les faits ressortent, et plus on court le risque de se rapprocher davantage de l’opinion. Bref, les allégations de fait doivent être suffisamment précises de manière à soutenir efficacement la reconnaissance du droit revendiqué et ainsi permettre au juge autorisateur d’en apprécier la suffisance.

[70] Au stade de l’autorisation, l’examen ne consiste pas à procéder à l’appréciation détaillée du bien-fondé du recours collectif, mais à vérifier si la requête et les éléments de preuve qui parfois complètent le dossier font état d’une cause défendable, voire soutenable ou justifiable, pour emprunter à des synonymes. La fonction de tamisage consiste à « réserver le même sort aux recours qui, sans être frivoles, sont manifestement mal fondés », soit le refus d’autorisation du recours. »

[35]        The allegation at paragraph 10, that Vitaminwater is “simply a fortified snack food” is contradicted by the exhibits filed in the record. As for the allegations concerning the health effects of the quantity of sugar in Vitaminwater, these are not facts but Petitioner’s unsubstantiated opinion and conclusion. To conclude that there is fault, the Court would have to assume that the mere presence of sugar in Vitaminwater is in and of itself sufficient to be considered unhealthy.

[36]        At paragraph 11 of the Motion, Petitioner alleges :

 

“11. The Respondents have run a very successful campaign of marketing Vitaminwater as a healthy alternative to sugary soft drinks.  In facts, Vitaminwater has estimated sales of more than 500 million dollars annually;”

 

[37]        Firstly, as stated by Petitioner during his out of court deposition, the advertising referred to in the proceedings is found on the bottle of Vitaminwater i.e. the labels. Secondly, Petitioner has not alleged any facts that would justify a conclusion that Vitaminwater is not a “healthy alternative to sugary soft drinks”. Therefore, the conclusion or opinion stated at paragraph 11 cannot be taken to be true. Thirdly, Respondents sales figures are irrelevant to the issues in the present case as they do not establish fault, prejudice or causation.

[38]        At paragraph 12 of the Motion, Petitioner alleges :

“12. This is due, in part, to the premium price tag that health-conscious consumers (the target market of Vitaminwater) are willing to pay for such a product. The average cost of Vitaminwater is about twice the price of the Respondents other sugary beverages, such as Coke and Sprite;”

[39]        As for the allegation that a “health-conscious” consumer is willing to pay a “premium price” for such a product, this is not a statement of fact but rather an opinion or hypothesis made by Petitioner. Petitioner also recognized at the hearing that what constituted a “health conscious” consumer was a highly subjective notion.

[40]        Moreover, there is no mention in the Motion of the actual price of Vitaminwater. Petitioner filed an affidavit, dated November 18, 2012, in which he alleges that the price of Vitaminwater varies between $2.19 and $2.85, with the median price being $2.29. There are, however, no allegations as to the price of Coke and Sprite.

[41]        Therefore, Petitioner’s mere affirmation that Vitaminwater is sold at a “premium price” is insufficient to justify the conclusions sought.

[42]        At paragraph 13 of the Motion, Petitioner alleges that “Vitaminwater’s marketing as a healthy beverage is false and misleading” and provides examples of the “false and misleading” representations that would have been made by Respondents.

[43]        With respect to sub-paragraph 13 a):

a) By using the name “Vitaminwater”;

[44]        The use of the name Vitaminwater is not false and misleading since it does, in fact, contain vitamins and water. Petitioner submits that sugar is the second most important ingredient and should therefore appear in its name. Even an incredulous and inexperienced consumer cannot be misled into thinking Vitaminwater contains nothing more than vitamins and water when the label specifically lists other non-medicinal ingredients.

[45]        Moreover, Vitaminwater is a registered trademark under the Trade-marks Act (the “T.M.A.”)[14], and was therefore subject to prior approval by the Canadian Intellectual Property Office (“CIPO“). The CIPO would not allow the registration of a trade-mark that is contrary to section 12(b) of the T.M.A. which reads as follows:

“12.1 Subject to section 13, a trade-mark is registrable if it is not

(…)

(b) whether depicted, written or sounded, either clearly deceptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin,”

 

[46]        With respect to sub-paragraph 13 b) :

b) By prominently promulgating the message on its labelling that Vitaminwater is a “nutrient enhanced water beverage”;

 

[47]        As discussed above, Vitaminwater is a “nutrient enhanced water beverage”, and calling it such cannot be found to be false and misleading.

[48]        With respect to sub-paragraph 13 d) :

d) By using in-store advertising with the representations “Drink, Refresh, Recharge” and “Replenish, Nourish, Renew”;

 

[49]        As appears from Laura Cutsey’s affidavit, Vitaminwater is not marketed in Canada with either the phrase “Drink, Refresh, Recharge” or “Replenish, Nourish, Renew”. These phrases are used on some generic product coolers that may include a variety of products sold in certain retail locations and the name Vitaminwater does not appear on the coolers at all.

[50]        With respect to sub-paragraph 13 e):

e) By giving the drinks names that suggest that each flavour has special health benefits;

 

[51]        The “health benefits” or “recommended use and purpose” vary depending on the type of Vitaminwater. There is no allegation that the “recommended use and purpose” found on each label were not achieved. Petitioner has failed to demonstrate that these health claims are false and thus, there can be no misrepresentation. In fact, at the hearing, Petitioner’s attorney recognized that these claims may be true.

[52]        With respect to sub-paragraph 13 f) :

f) By making specific health claims on the labelling and on its website, as evidenced by Exhibits R-1 and R-2, when in fact it’s sugar content (similar to soft drinks) contributes to the current epidemic of weight gain, obesity, and diabetes;

 

[53]        As discussed above, the sugar content of Vitaminwater is significantly lower than that of soft drinks and there is no allegation that the health benefits described on the labels were not achieved. As to the allegation that its sugar content contributes to “the current epidemic of weight gain, obesity and diabetes”, it is an unsubstantiated opinion on the part of Petitioner that the Court cannot assume to be true.

[54]        With respect to sub-paragraph 13 g) :

g) By purposely excluding the name Coca-Cola, which consumers would likely associate with snack food, from appearing anywhere on any Vitaminwater packaging, labelling, or its website;

[55]        The allegation that Respondents excluded the name Coca-Cola from the Vitaminwater labels, packaging or website for fear that Vitaminwater may be associated with snack food, is merely a conjecture and hypothesis on the part of Petitioner that the Court cannot take as true.

[56]        With respect to sub-paragraph 13 h) :

h) By promoting Vitaminwater as a healthy alternative to soft drinks, when it has only slightly less sugar than Coke, and when the benefits of these added vitamins are outweighed by its negative health risks as a snack food;

 

[57]        As appears from Exhibit R-1 and Laura Cutsey’s affidavit, the allegation that Vitaminwater “has only slightly less sugar than Coke” is false. As for the allegation that “the benefits of these added vitamins are outweighed by its negative health risks as a snack food”, it is a conclusion or unsubstantiated opinion that the Court cannot take to be true.

[58]        With respect to sub-paragraph 13 i) :

i) By failing to disclose on the labelling or elsewhere how many grams of sugar is actually contained in a bottle of Vitaminwater, but instead only stating the confusing text of “calories/591 mL: 120 recommended dose (adults)”;

 

[59]        As for failing to disclose the amount of sugar contained in a bottle of Vitaminwater, Respondents were prohibited from doing so, as will be discussed below. As for the rest of the paragraph concerning the text that appears on the labels, the exhibits filed in the record show that this allegation is incorrect and cannot be taken to be true.

[60]        With respect to sub-paragraph 13 j) :

j) By taking a sugary snack food and fortifying it for the sole purpose of claiming that the product provides certain (and often outlandish) nutritional benefits;  

[61]        Petitioner states an opinion and draws unsubstantiated conclusions. Moreover, as appears from Exhibit R-1, Vitaminwater contains actual vitamins and there are no allegations that Vitaminwater does not provide the health benefits described on its labels.

[62]        At paragraph 14 of the Motion, Petitioner alleges :

“14. Since consumers of Vitaminwater are not informed of the quantity of sugar and are mislead as to its benefits, they are deprived of the necessary information needed to make a healthy choice and/or are left with the false impression that Vitaminwater is a healthy beverage;”

 

[63]        Petitioner fails to mention that Vitaminwater was regulated as a natural health product under the Food and Drugs Act[15] (“F.D.A.”), the Food and Drugs Regulations[16] and the Natural Health Products Regulations[17], when it was launched in Canada in 2008, until it was recently reclassified.

[64]        Notwithstanding the fact that Petitioner’s allegations of fact are assumed to be true, the Court must nevertheless undertake an examination of such facts in light of the law and of the evidence adduced[18].

« [2] Si une action ordinaire est irrecevable parce que non fondée en droit même en tenant les faits allégués pour vrais, il en est de même d’une action collective d’autant plus que les frais engendrés par une telle action sont plus considérables que ce n’est le cas en règle générale.

[3] Il s’agit en l’occurrence d’une pure question d’interprétation. La juge de première instance a tenu les faits pour avérés et a conclu que les textes législatifs ne pouvaient pas soutenir l’interprétation soumise par le demandeur, à savoir que les banques doivent assumer les frais de préparation et d’inscription pour publication des quittances lorsque l’emprunt est garanti par une charge hypothécaire.  Dans l’exercice de son pouvoir discrétionnaire, les faits étant avérés, la juge non seulement pouvait, mais devait interpréter le droit. » (Emphasis added)

 

[65]        The F.D.A. and related regulations stipulated that sellers of products classified as natural health products should not list the quantity of non-medicinal ingredients, such as sugar, on their labels[19]. Furthermore, as a natural health product, Vitaminwater labels were required to contain a health claim or function/benefit claim[20]. Thus, the labels of Vitaminwater complied with the legislative and regulatory requirements and Respondents cannot be considered to have committed a civil fault by not listing the quantity of sugar in Vitaminwater or by referring to certain health benefits. (Emphasis added)

[66]        Petitioner does not dispute the fact that when classified as a natural health product Respondents were prohibited from listing the sugar content of Vitaminwater on its label, but argues that Respondents could have chosen a different classification. The Court fails to see how that fact, even when taken to be true, can constitute a civil fault.

[67]        In paragraph 15 of the Motion, Petitioner alleges:

“15. Therefore, consumers of Vitaminwater, who are health conscious individuals, would not have agreed to buy a vitamin-fortified junk food and certainly would not have consented to pay a premium price for it;”

 

[68]        The record shows that this allegation constitutes an unsubstantiated opinion and conclusion that the Court cannot take to be true.

[69]        Have Respondents violated the Consumer Protection Act (“C.P.A.”) ?

[70]        The Supreme Court in Richard v. Time inc.[21] determined that in order to succeed in a claim based on alleged misrepresentations pursuant to section 218 C.P.A., the claimant must demonstrate (i) what is the general impression given by the representation at issue in the eyes of a credulous and inexperienced consumer, and (ii) whether this impression was not accurate.

[71]        As discussed above, Vitaminwater is a “nutrient enhanced water beverage” which has special health benefits. Not only did Petitioner not demonstrate that these claims are false but he admitted that Vitaminwater is a nutrient enhanced beverage. As to the non-disclosure of the sugar content, until recently, Respondents were prevented by the applicable legislation and regulation to include the amount of sugar on the label and thus cannot be accused of having failed to disclose an important fact within the meaning of section 228 C.P.A. Therefore, the Court could not find allegations of facts that could demonstrate a violation of the C.P.A. by Respondents.

[72]        The same analysis applies to section 52 of the Competition Act, which reads as follows :

“52. (1) No person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect.”

 

[73]        For the reasons stated above, Respondents have not intentionally made “a representation to the public that is false or misleading in a material respect”[22].

[74]        Therefore, the Petitioner has failed to demonstrate, even on a prima facie basis, that the Respondents have made representations that are not accurate and committed a behaviour that could constitute a civil fault under the invoked regimes. In other words, the Court finds that the Petitioner has not demonstrated that the allegations of fact, if proven, would lead to the conclusions sought and thus, that he has an arguable case. For these reasons, the Court will dismiss the Motion.

[75]        However, as recommended by the Honourable Jacques Dufresne in Fortier v. Meubles Léon ltée[23], the Court will nevertheless analyse the other three criteria of section 1003 C.C.P., as well as the question of damages and the injunctive relief sought by Petitioner.

 

b) Damages

[76]        Petitioner has not alleged what damages he has suffered as a result of purchasing Vitaminwater. He states that he has stopped purchasing Vitaminwater when he learned that it contained sugar, claiming that sugar is responsible for various health issues including obesity and diabetes. However, Petitioner does not allege that he suffers from any such health conditions as a result of his consumption of Vitaminwater.

[77]        As for the fact that Petitioner would not have paid a “premium price” for Vitaminwater, other than the general conclusion that Vitaminwater sells at a premium price, the only allegation of fact is that a 591 ml bottle of Vitaminwater sells for $2.29 and there is no allegation as to how that compares with the price of other beverages.

[78]        In fact, when examined, Petitioner testified that the only beverages whose prices he compared to Vitaminwater were “all along the same price”[24]. Moreover, Respondents have no control over the retail price of Vitaminwater products and comparison with soft drinks cannot stand as the volumes are not the same[25].

[79]        In light of the foregoing, even if Petitioner had fulfilled his burden and demonstrated that Respondents had committed a civil fault, he has failed to demonstrate that he has suffered any prejudice as a result thereof.

[80]        What about an “aggregate loss”?

[81]        The notion of “aggregate loss” developed by the Supreme Court in Infineon does not help in the present case. There is no allegation demonstrating an aggregate loss and the fact that the sales volume of Vitaminwater is estimated at more than $500 million annually does not demonstrate an aggregate loss of the same amount for the members of the proposed class.

 

c) Injunctive relief

[82]        Petitioner is also seeking the following injunctive order :

“ORDER the Defendants to cease from continuing its unfair and/or deceptive conduct;”

[83]        Firstly, the order sought is imprecise and it is not possible for the Court to determine on the face of the Motion what sort of injunctive relief Petitioner is seeking and, therefore, whether Petitioner has an arguable case to make.

[84]        Secondly, in October 2011, Health Canada commenced a transition process whereby certain natural health products were to become regulated as foods. As a result of this new classification, the Respondents have been requested to modify the labels of Vitaminwater products which now disclose the quantity of sugar found in each bottle. These new labels appeared in October 2013 and in February 2014. Therefore, this point is now moot.

[85]        For these reasons, the Court would not authorize the conclusion ordering Respondents to “cease from continuing its unfair and/or deceptive conduct”.  

 

2) Article 1003 (a) C.C.P. The recourses of the members raise identical, similar or related questions of law or fact

[86]        The Honourable Dominique Bélanger stated the following :

“[3] Une demande d’autorisation d’exercer un recours collectif est un mécanisme de filtrage et de vérification visant à s’assurer que le recours proposé est sérieux, parce que basé sur un syllogisme juridique solide, lui-même basé sur les faits allégués. La demande doit aussi démontrer que l’action collective est appropriée, car les questions sont identiques, similaires ou connexes[26]. »

[87]        Petitioner proposes that the following common questions be put forward :

 

a.      Did the Respondents engage in unfair, false, misleading, or deceptive acts or practices regarding the marketing and sale of its Vitaminwater?

b.      Are the Respondents liable to the class members for reimbursement of the purchase price or the additional premium in the purchase price as a result of their misconduct?

c.      Should an injunctive remedy be ordered to prohibit the Respondents from continuing to perpetrate their unfair and/or deceptive conduct?

d.      Are the Respondents responsible to pay punitive damages to class members and in what amount?

[88]        The Supreme Court recently decided in Vivendi (NBP Supra note 4)that the presence of only one question of law or fact which is “identical, similar or related”, is sufficient to satisfy the criterion of Article 1003 (a) C.C.P., so long as it is not insignificant to the outcome of the action.

[89]        Petitioner submits that the clear common denominator in the present case is “Did Respondents market and sell Vitaminwater through the use of false or misleading representations?” Although there may be room for some diversity or individuality, namely with respect to the amount of the damages, it is not a bar to authorization[27]. The Court finds that the recourses of the members raise identical, similar or related questions of law or fact.

 

3) Article 1003(c) C.C.P. The composition of the group makes the application of Articles 59 or 67 C.C.P. difficult or impracticable

[90]        In Vermette v. General Motors du Canada ltée[28], the Court of Appeal stated :

“[69] En raison du nombre probable des membres, de leur situation géographique et de la nature du recours entrepris, il en découle une impossibilité pratique d’obtenir les mandates ou d’envisager une jonction d’actions.”

[91]        In Brière v. Rogers Communications[29], the criterion of article 1003(c) was defined as follows :

 

 

“[71] Dans son livre Le recours collectif, Yves Lauzon énumère les divers facteurs retenus par les tribunaux dans l’analyse de la causalité entre « composition du groupe » et le fait qu’il est difficile ou peu pratique d’appliquer les articles 59 et 67 C.p.c.

[72] Les éléments suivants s’appliquent : le nombre probable des membres; la situation géographique des membres; les coûts impliqués; et les contraintes pratiques et juridiques inhérentes à l’utilisation du mandat et de la jonction des parties en comparaison avec le recours collectif.

[73] Dans Morin c. Bell Canada, la Juge Savard rappelle que les requérants n'ont pas à démontrer que l'application des articles 59 et 67 C.p.c. est impossible; ils doivent plutôt démontrer que l'application de ces articles est difficile ou peu pratique.

[74] Dans la présente requête, il est estimé que plusieurs milliers de personnes au Québec ont été clients de l’intimée et parmi ce nombre plusieurs ont résilié leur contrat de service cellulaire avec Rogers depuis le 21 février 2008 et se sont vus facturer des frais de résiliation.

[75] De plus, M. Brière soumet qu’il n’a pas accès à la liste des clients de l’intimée à qui les frais de résiliation ont été facturés. Le Tribunal reconnaît qu’il sera difficile pour M. Brière de retracer et de contacter tous les membres afin que ceux-ci puissent se joindre dans une même demande en justice.

[76] Compte tenu de tous ces éléments, le Tribunal est d'avis que la condition énoncée au paragraphe 1003 c) C.p.c. est remplie. “

 

[92]        Petitioner is unaware of the specific number of persons who have purchased Vitaminwater. He estimates that the size of the class is considerable i.e. in the tens of thousands, if not in the hundreds of thousands. Also, the price of Vitaminwater is relatively small.

[93]        Petitioner submits that an exhaustive search is not possible in the circumstances and that he has instructed his attorney to place information about the present class action on his website and to collect the coordinates of those class members who wish to be kept informed and to participate in any resolution of this matter.

[94]        Given the number of purchasers of Vitaminwater, this is a case where the application of articles 59 or 67 C.C.P. would be difficult or impracticable. The Court finds that this criterion is met.

 

 

[95]        Requirements of Article 1002 C.C.P.

[96]        Petitioner defines as members all residents in Canada who have purchased the drink Glacéau Vitaminwater. Alternatively, Petitioner proposes to limit the group to Quebec residents.

[97]        With respect to the national class, given that the allegations of the Motion are deemed to be true, the Court finds that the criteria set out in article 3148 C.C.Q. is met with respect to Quebec residents. What about residents outside Quebec?

[98]        Article 3148 C.C.Q. reads as follows :

 

3148. In personal actions of a patrimonial nature, a Québec authority has jurisdiction where

 

(1) the defendant has his domicile or his residence in Québec;

 

(2) the defendant is a legal person, is not domiciled in Québec but has an establishment in Québec, and the dispute relates to its activities in Québec;

 

(3) a fault was committed in Québec, damage was suffered in Québec, an injurious act occurred in Québec or one of the obligations arising from a contract was to be performed in Québec;

 

(4) the parties have by agreement submitted to it all existing or future disputes between themselves arising out of a specified legal relationship;

 

(5) the defendant submits to its jurisdiction.

 

However, a Québec authority has no jurisdiction where the parties, by agreement, have chosen to submit all existing or future disputes between themselves relating to a specified legal relationship to a foreign authority or to an arbitrator, unless the defendant submits to the jurisdiction of the Québec authority.

 

[99]        However, paragraphs 1, 2 and 4 do not apply since Respondents have no head office, or even a place of business in Quebec, and there is no agreement between the parties. Furthermore, the false and misleading advertising alleged in the Motion which may have led residents outside Quebec to purchase Vitaminwater must have occurred outside Quebec. Therefore, there was no fault committed in Quebec against non residents.

[100]     The Honourable Marie Gaudreau faced a similar situation in Cunning v. FitFlop[30]  dealing with the sale of Fitflop footwear:

" [43] Le Tribunal estime pour les raisons suivantes qu’il n’y a pas de motifs en l’espèce pour autoriser un recours collectif national, soit une action personnelle à caractère patrimonial en vertu de l’article 3148 du Code civil du Québec :

« 3148. Dans les actions personnelles à caractère patrimonial, les autorités québécoises sont compétentes dans les cas suivants:

1°        Le défendeur a son domicile ou sa résidence au Québec;

2°        Le défendeur est une personne morale qui n'est pas domiciliée au Québec mais y a un établissement et la contestation est relative à son activité au Québec;

3°        Une faute a été commise au Québec, un préjudice y a été subi, un fait dommageable s'y est produit ou l'une des obligations découlant d'un contrat devait y être exécutée;

4°        Les parties, par convention, leur ont soumis les litiges nés ou à naître entre elles à l'occasion d'un rapport de droit déterminé;

5°        Le défendeur a reconnu leur compétence. »

[44] L’alinéa 1° et 2° ne s’appliquent pas car Fitflop n’a ni domicile ni établissement au Québec de même que l’aliéna 4° car il n’existe aucune convention entre les parties.

[45] Cunning ne peut alléguer une faute commise au Québec en ce qui concerne les membres des autres provinces. 

[46] La fausse publicité et les fausses représentations dont les non-résidents auraient été «victimes» ont dû être pratiquées ailleurs qu’au Québec. Il n’y a donc aucune faute commise au Québec envers des non-résidents.

[47] Toute la jurisprudence citée par le procureur de Cunning qui a permis l’exercice de classe nationale implique un siège social au Québec, y compris celle rendue par le Juge Benoît Émery dans l’affaire Amram c. Rogers Communication inc. et al.

[48] La question juridictionnelle doit être tranchée en vertu du droit applicable au Québec.

[49] Même le Juge Cullity de la Cour supérieure de l’Ontario reconnaît des divergences entre le régime juridique québécois et celui de l’Ontario :

« [37] The more difficult cases — of which this is one — are those in which the claims of the non-resident class members are based entirely on material facts that occurred outside Ontario. In such a case, the only connecting factor between Ontario, on the one hand, and such members and their claims, on the other, may be that they have claims against the same defendants and that these raise the same common issues as the claims of class members resident in Ontario over whom — and whose claims against the defendants — the court has jurisdiction.

…

[43] The reasoning in the last three cases I have mentioned does not fit happily with that of the courts of Québec and Saskatchewan in HSBC Bank Canada v. Hocking, 2006 QCCS 330 (CanLII), [2006] J.Q. no. 507, [2006] R.J.Q. 804 (S.C.) and Englund v. Pfizer Canada Inc., 2006 SKQB 6 (CanLII), [2006] S.J. No. 9, [2006] 7 W.W.R. 128 (Q.B.), respectively. »

[50] Donc, les membres du groupe national proposé n’entrent pas dans le cadre de l’article 3148 du Code civil du Québec. 

[51] Il n’existe aucune assise juridictionnelle pour fonder la compétence de la Cour supérieure vis-à-vis des membres non-résidents. La doctrine du «wait and see» n’est pas suffisante pour établir une telle compétence.

[52] La décision de la Cour d’appel dans l’arrêt Bell, cité par le procureur de Cunning, ne visait qu’une seule autre province, soit l’Ontario :

« [118]    En l’espèce, la compétence des tribunaux du Québec ne pose pas de problème à première vue puisque l’intimée a son domicile au Québec (article 3148, premier alinéa, C.c.Q.).

[119]      Par ailleurs, la question de savoir si un recours collectif peut être fondé sur plusieurs régimes juridiques différents ne semble pas encore avoir reçu de réponse définitive, ni au Québec ni ailleurs au Canada. L'auteur Stephen Hamilton décrit ainsi la difficulté que peut poser l'autorisation d'un recours collectif fondé sur le droit de différentes provinces :

The expansion of a class is limited, in the terms used by the legislator and the courts, by the commonality of the issues and/or the preferability of the procedure. As the class gets bigger, the risks that the issues will not be sufficiently common and the class proceedings no longer preferable, increase. This is particularly true when the class expand across a provincial border. The law governing the individual claims of members resident in another provincial border will likely be different, and this may become a significant problem, particularly if the cause of action is statutory and there are substantial different provinces' statutory regimes.

The legal issues will therefore be less common or sometime not common at all. »

[53] Comme l’affirme la Cour d’appel dans l’affaire Hocking c. Haziza :

« [151]    Or, c’est précisément ce qui paraît survenir en l’espèce : en autorisant un recours collectif sans même se poser la question de savoir s’il existe entre tous et chacun des membres du groupe visé (en l’espèce, les Canadiens ayant eu certains rapports contractuels avec HSBC) et le for saisi (celui de l’Ontario) un lien réel et substantiel sur le fond, le jugement ontarien qui est au cœur du litige fait apparemment en sorte de rendre applicable à tous les non-résidants de l’Ontario, et notamment aux Québécois, non seulement la procédure de reconnaissance applicable aux recours collectifs en Ontario, mais surtout le droit substantif de cette province : voilà en effet que par ce jugement ontarien dont on demande la reconnaissance au Québec, les droits des justiciables québécois ayant contracté au Québec, avec une succursale québécoise de HSBC, un contrat hypothécaire relatif à une propriété située au Québec se trouveraient déterminés par le droit ontarien, alors qu’aucun lien de quelque sorte ne les rattache à celui-ci. Ne peut-on croire qu’il y a là une atteinte directe au principe constitutionnel de territorialité »

[54] Aux fins d’établir une classe nationale, il est trop simple d’affirmer: «If you bought, you’re a member because it did not work for you»”.

 

[101]     The Court, applying the same reasoning used in Fitflop, finds that there is no reason in the present case to authorize a national class action and therefore such class action will be limited to Quebec residents.

[102]     Respondents argue that the class proposed by Petitioner cannot be objectively defined and is overly broad. As proposed the definition includes all purchasers of Vitaminwater including satisfied customers or those who bought Vitaminwater with no specific purpose in mind. The Court finds that the fact that the class risks capturing individuals who are not intended to be captured can be debated on the merits.

 

 

[103]     Respondents also argue that the proposed class definition includes every purchaser, including wholesalers, distributors and retailers, etc. Since the Motion is largely based on the Consumer Protection Act (“C.P.A.“) and the allegations target consumers, rather than just any purchaser, the Court would limit the class to consumers.

[104]     Respondents submit that the class definition should include an “end date” since Vitaminwater was reclassified and labels now mention the quantity of sugar in Vitaminwater products. The Court disagrees. Although Respondents are now required to indicate the sugar content on the labels of Vitaminwater, there is no indication in the record as to when the bottles with the old labels were removed from sale.

[105]     In light of the fact that a class action is first and foremost a procedural means, Petitioner suggests that any flaws in the group definition is not fatal and asks the Court to modify the group definition as it sees fit. Such power has been recognized by our courts in the past[31]. It has also been determined that this can be done later on in the process[32].   Therefore, as the case develops, the issue of the group description may be reassessed by the Court.

 

4) Article 1003 (d) C.C.P. The member to whom the Court intends to ascribe the status of representative is in a position to represent the members adequately

[106]     The Supreme Court in Infineon analysed the criterion set out by article 1003(d) C.C.P. as follows[33] :

“[149] Selon l’alinéa 1003d) C.p.c., « le membre auquel il entend attribuer le statut de représentant [doit être] en mesure d’assurer une représentation adéquate des membres ». Dans Le recours collectif comme voie d’accès à la justice pour les consommateurs (1996), Pierre - Claude Lafond avance que la représentation adéquate impose l’examen de trois facteurs : « l’intérêt à poursuivre [. . .], la compétence [. . .] et l’absence de conflit avec les membres du groupe [. . .] » (p. 419). Pour déterminer s’il est satisfait à ces critères pour l’application de l’al. 1003d), la Cour devrait les interpréter de façon libérale. Aucun représentant proposé ne devrait être exclu, à moins que ses intérêts ou sa compétence ne soient tels qu’il serait impossible que l’affaire survive équitablement. “

[107]     With respect to competence, as stated by the Court of appeal in Del Giudice v. Honda Canada inc.[34], Petitioner must have undertaken at least a minimal investigation in advancement of the case in order to show that he will adequately represent the interests of the class members:

« [38] Bien sûr, à ce stade, il n’est pas nécessaire que le requérant se soit livré à une enquête approfondie ni qu’il ait identifié tous les membres du groupe. Il faut toutefois qu’il établisse avoir fait une enquête raisonnable, qu’il fournisse une estimation des personnes visées et que, à la satisfaction du juge d’autorisation, il établisse être en mesure de diriger les démarches requises pour l’exercice du recours.

[…]

[44] S’agissant ici d’un produit de consommation offert à grande échelle par un fabricant oeuvrant dans le monde entier, il n’est pas déraisonnable de penser qu’un nombre relativement important de consommateurs a fait l’acquisition de Honda Civic des modèles 1997, 1998 et 1999 de couleur Dark Amethyst Pearl. C’est dans cette perspective que le caractère réduit de l’échantillonnage recueilli et l’absence de documentation suffisamment explicite ont, aux yeux du juge, remis en question l’aptitude de l’appelant à gérer le recours collectif. Selon lui, l’appelant ne s’est pas qualifié comme étant un représentant adéquat parce qu’il n’a pas procédé à un examen raisonnable permettant d’étayer les éléments de base justifiant l’usage d’un recours collectif. L’appelant ne me convainc pas que le juge a commis une erreur à ce sujet. »

 

[108]     When Petitioner was examined out of court in August 2012, he testified that 13 people from Quebec had registered on his attorney’s website. Other than speaking to some friends and to his sister, Petitioner had not contacted any of these 13 people to determine whether they actually had a cause of action against Respondents. At the hearing, Petitioner filed a more recent list. On this list 45 have an address in Quebec. However, there are no allegations that Petitioner has made any effort to contact any of those people either. In other words, Petitioner has made no investigation in order to determine whether a proper class exists.

[109]     Moreover, the various flaws presented by the Motion raise reasonable doubt as to Petitioner’s capacity to lead this class action, especially when considering that he has made no effort to investigate the subject matter at the root of his proceedings.

[110]     Finally, Petitioner gave testimony during his examination out of court that was contradicted by the exhibits filed in the record and nevertheless maintained that his answers were true[35]. The Motion was subsequently amended and his attorney at the hearing admitted that the slogan “vitamins+water=all you need” had never been used in Canada.

[111]     Therefore, the Court finds that Petitioner is not in a position to represent the members adequately.

 

FOR THESE REASONS, THE COURT:

[112]     DISMISSES Petitioner’s Re-Amended Motion to Authorize the Bringing of a Class Action and to Ascribe the Status of Representative;

[113]     THE WHOLE with costs.

 

		__________________________________ MICHELINE PERRAULT, J.S.C.
Me Jeff Orenstein
Consumer Law Group Inc.
Attorney for Petitioner
Me Robert Torralbo
Me Marc-André Landry
Blake, Cassels & Graydon s.e.n.c.r.l.
Attorneys for Respondents
Hearing Dates :	May 1st et 2nd 2014