Court File No. 33563
IN THE SUPREME COURT OF CANADA (ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA)
BETWEEN: THE ATTORNEY GENERAL OF CANADA
APPELLANT/RESPONDENT BY CROSS-APPEAL (THIRD PARTY)
– and –
IMPERIAL TOBACCO CANADA LIMITED, ROTHMANS, BENSON & HEDGES INC., ROTHMANS INC., JTI-MACDONALD CORP., B.A.T INDUSTRIES P.L.C., BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED, CARRERAS ROTHMANS LIMITED, PHILIP MORRIS USA INC., PHILIP MORRIS INTERNATIONAL INC., R.J. REYNOLDS TOBACCO COMPANY and R.J. REYNOLDS TOBACCO INTERNATIONAL, INC.
RESPONDENTS/APPELLANTS BY CROSS-APPEAL (APPELLANTS) – and –
HER MAJESTY THE QUEEN IN RIGHT OF BRITISH COLUMBIA
RESPONDENT (RESPONDENT) – and –
ATTORNEY GENERAL OF BRITISH COLUMBIA and ATTORNEY GENERAL OF NEW BRUNSWICK
INTERVENERS
CONSOLIDATED FACTUM OF RESPONDENTS ON APPEAL AND CONSOLIDATED FACTUM OF APPELLANTS ON CROSS-APPEAL OF ROTHMANS, BENSON & HEDGES INC., ROTHMANS INC., PHILIP MORRIS USA INC. AND PHILIP MORRIS INTERNATIONAL INC. (pursuant to Rules 42 and 43 of the Rules of the Supreme Court of Canada)
COUNSEL FOR ROTHMANS, BENSON & OTTAWA AGENT FOR ROTHMANS, HEDGES INC. AND ROTHMANS INC. BENSON & HEDGES INC. AND MACAULAY McCOLL LLP ROTHMANS INC. 1575 – 650 West Georgia Street GOWLING LAFLEUR HENDERSON LLP Vancouver, British Columbia V6B 4N9 2600 – 160 Elgin Street Telephone: 604-687-9811 Ottawa, Ontario K1P 1C3 Facsimile: 604-687-8716 Telephone: 613-233-1781 KENNETH N. AFFLECK, Q.C. Facsimile: 613-563-9869 HENRY S. BROWN, Q.C.
COUNSEL FOR PHILIP MORRIS USA OTTAWA AGENT FOR PHILIP MORRIS INC. USA INC. DAVIS & COMPANY LLP GOWLING LAFLEUR HENDERSON LLP 2800 – 666 Burrard Street 2600 – 160 Elgin Street Vancouver, British Columbia V7Y 1K2 Ottawa, Ontario K1P 1C3 Telephone: 604-687-9444 Telephone: 613-233-1781 Facsimile: 604-687-1612 Facsimile: 613-563-9869 D. ROSS CLARK, Q.C. HENRY S. BROWN, Q.C.
COUNSEL FOR PHILIP MORRIS OTTAWA AGENT FOR PHILIP MORRIS INTERNATIONAL INC. INTERNATIONAL INC. McCARTHY TÉTRAULT LLP GOWLING LAFLEUR HENDERSON LLP 1300 – 777 Dunsmuir Street 2600 – 160 Elgin Street Vancouver, British Columbia V7Y 1K2 Ottawa, Ontario K1P 1C3 Telephone: 604-643-5983 Telephone: 613-233-1781 Facsimile: 604-622-5614 Facsimile: 613-563-9869 SIMON V. POTTER HENRY S. BROWN, Q.C. MICHAEL A. FEDER
COUNSEL FOR THE ATTORNEY OTTAWA AGENT FOR THE ATTORNEY GENERAL OF CANADA GENERAL OF CANADA DEPARTMENT OF JUSTICE DEPARTMENT OF JUSTICE 234 Wellington Street, East Tower 234 Wellington Street, East Tower Ottawa, Ontario K1A 0H8 Ottawa, Ontario K1A 0H8 Telephone: 613-948-1483 Telephone: 613-941-2351 Facsimile: 613-957-0195 Facsimile: 613-954-1920 PAUL VICKERY CHRISTOPHER RUPAR TRAVIS HENDERSON
COUNSEL FOR IMPERIAL TOBACCO OTTAWA AGENT FOR IMPERIAL CANADA LIMITED TOBACCO CANADA LIMITED HUNTER LITIGATION CHAMBERS OSLER, HOSKIN & HARCOURT LLP 2100 – 1040 West Georgia Street 1900 – 340 Albert Street Vancouver, British Columbia V6E 4H1 Ottawa, Ontario K1R 7Y6 Telephone: 604-891-2400 Telephone: 613-787-1009 Facsimile: 604-647-4554 Facsimile: 613-235-2867 JOHN J.L. HUNTER, Q.C. PATRICIA J. WILSON BRENT B. OLTHUIS
OSLER, HOSKIN & HARCOURT LLP Box 50, 1 First Canadian Place Toronto, Ontario M5X 1B8 Telephone: 416-362-2111 Facsimile: 416-862-6666 DEBORAH A. GLENDINNING
COUNSEL FOR JTI-MACDONALD OTTAWA AGENT FOR JTI- CORP., R.J. REYNOLDS TOBACCO MACDONALD CORP., R.J. REYNOLDS COMPANY AND R.J. REYNOLDS TOBACCO COMPANY AND R.J. TOBACCO INTERNATIONAL, INC. REYNOLDS TOBACCO FARRIS, VAUGHAN, WILLS & INTERNATIONAL, INC. MURPHY LLP GOWLING LAFLEUR HENDERSON LLP 2500 – 700 West Georgia Street 2600 – 160 Elgin Street Vancouver, British Columbia V7Y 1B3 Ottawa, Ontario K1P 1C3 Telephone: 604-684-9151 Telephone: 613-233-1781 Facsimile: 604-661-9349 Facsimile: 613-563-9869 JEFFREY J. KAY, Q.C. HENRY S. BROWN, Q.C. ROBERT J. McDONELL TERESA M. TOMCHAK
COUNSEL FOR B.A.T INDUSTRIES OTTAWA AGENT FOR B.A.T P.L.C. AND BRITISH AMERICAN INDUSTRIES P.L.C. AND BRITISH TOBACCO (INVESTMENTS) LIMITED AMERICAN TOBACCO SUGDEN, McFEE & ROOS LLP (INVESTMENTS) LIMITED 700 – 375 Water Street STIKEMAN ELLIOTT LLP Vancouver, British Columbia V6B 5N3 1600 – 50 O’Connor Street Telephone: 604-687-7700 Ottawa, Ontario K1P 6L2 Facsimile: 604-687-5596 Telephone: 613-566-0546 CRAIG P. DENNIS Facsimile: 613-230-8877 MICHAEL D. SHIRREFF NICHOLAS McHAFFIE
COUNSEL FOR CARRERAS OTTAWA AGENT FOR CARRERAS ROTHMANS LIMITED ROTHMANS LIMITED HARPER GREY LLP STIKEMAN ELLIOTT LLP 3200 – 650 West Georgia Street 1600 – 50 O’Connor Street Vancouver, British Columbia V6B 4P7 Ottawa, Ontario K1P 6L2 Telephone: 604-687-0411 Telephone: 613-566-0546 Facsimile: 604-669-9385 Facsimile: 613-230-8877 CHRIS RUSNAK NICHOLAS McHAFFIE
COUNSEL FOR HER MAJESTY THE OTTAWA AGENT FOR HER MAJESTY QUEEN IN RIGHT OF BRITISH THE QUEEN IN RIGHT OF BRITISH COLUMBIA COLUMBIA BULL, HOUSSER & TUPPER LLP BURKE-ROBERTSON LLP 3000 – 1055 West Georgia Street 70 Gloucester Street Vancouver, British Columbia V6E 3R3 Ottawa, Ontario K2P 0A2 Telephone: 604-687-6575 Telephone: 613-566-2058 Facsimile: 604-641-4949 Facsimile: 613-235-4430 DANIEL A. WEBSTER, Q.C. ROBERT E. HOUSTON, Q.C. RYAN D.W. DALZIEL
COUNSEL FOR THE ATTORNEY OTTAWA AGENT FOR THE ATTORNEY GENERAL OF BRITISH COLUMBIA GENERAL OF BRITISH COLUMBIA ATTORNEY GENERAL OF BRITISH BURKE-ROBERTSON LLP COLUMBIA 70 Gloucester Street 6th Floor, 1001 Douglas Street Ottawa, Ontario K2P 0A2 Victoria, British Columbia V8W 9J7 Telephone: 613-566-2058 Telephone: 250-356-8875 Facsimile: 613-235-4430 Facsimile: 250-356-9154 ROBERT E. HOUSTON, Q.C. GEORGE H. COPLEY, Q.C.
COUNSEL FOR THE ATTORNEY OTTAWA AGENT FOR THE ATTORNEY GENERAL OF NEW BRUNSWICK GENERAL OF NEW BRUNSWICK BENNETT JONES LLP FASKEN MARTINEAU DuMOULIN LLP Box 130, 1 First Canadian Place 1300 – 55 Metcalfe Street Toronto, Ontario M5X 1A4 Ottawa, Ontario K1P 6L5 Telephone: 416-777-7472 Telephone: 613-236-3882 Facsimile: 416-863-1716 Facsimile: 613-230-6423 JEFFREY S. LEON LESLIE MILTON
Table of Contents i
CONSOLIDATED FACTUM OF RESPONDENTS ON APPEAL
PART I – STATEMENT OF FACTS...... 1 A. Overview ...... 1 B. Key facts ...... 3 PART II – QUESTIONS IN ISSUE ...... 5
PART III – STATEMENT OF ARGUMENT ...... 6 A. Since this appeal arises from a motion to strike, Canada must show that it is plain and obvious that the defendants’ claim has no chance of success under the Anns/Cooper test...... 6 B. The defendants’ claim arguably satisfies the first stage of the Anns/Cooper test...... 7 I. The potential for harm to the defendants was reasonably foreseeable...... 7 II. There was proximity between Canada and the defendants...... 8 (a) Proximity can be founded on the defendants’ reasonable and foreseeable reliance...... 9 (b) The defendants do not rely on Canada’s statutory duties to establish proximity...... 10 (c) The alleged duty to the defendants poses no conflict with Canada’s duties to the public...... 12 C. The defendants’ claim arguably satisfies the second stage of the Anns/Cooper test...... 14 I. Evidence is needed to determine if Canada’s prima facie duty should be negated... 14 II. Canada’s prima facie duty is not negated by concerns about indeterminate liability...... 15 (a) Canada knew the defendants’ identities and its statements were used for their intended purpose...... 15 (b) Liability is not indeterminate as to amount, time or class...... 16 III. Canada’s alleged misrepresentations were operational conduct, not policy decisions...... 17 IV. Canada’s prima facie duty does not create an “unintended insurance scheme”...... 20 PART IV – SUBMISSIONS CONCERNING COSTS ...... 20
PART V – ORDER REQUESTED...... 20
PART VI – TABLE OF AUTHORITIES...... 21
PART VII – PROVISIONS DIRECTLY AT ISSUE ...... 24
Table of Contents ii
CONSOLIDATED FACTUM OF APPELLANTS ON CROSS-APPEAL
PART I – STATEMENT OF FACTS...... 41 A. Overview ...... 41 B. Statement of facts ...... 44 I. The Costs Recovery Act and British Columbia’s action against the defendants ...... 44 II. The defendants’ third party notices against Canada ...... 47 III. Canada’s motion to strike and the decisions below...... 49 PART II – QUESTIONS IN ISSUE ...... 54
PART III – STATEMENT OF ARGUMENT ...... 55 A. As these cross-appeals arise from a motion to strike, the defendants’ claims cannot be struck unless they are radically defective, and particular caution is warranted...... 55 B. Canada is a “manufacturer” within the meaning of the Costs Recovery Act and potentially liable to British Columbia under it...... 56 I. The plain language of the “manufacturer” definition captures Canada...... 56 II. The Court of Appeal erroneously departed from the Act’s plain language based on Hansard...... 59 III. The Court of Appeal erred by relying on its own policy concerns about Canada being a “manufacturer”...... 61 C. Even if Canada were not a “manufacturer” within the meaning of the Costs Recovery Act, it would be liable to British Columbia under the Health Care Costs Recovery Act. ... 63 D. The defendants have an arguable claim for contribution...... 65 I. Canada can be directly liable to the plaintiff, British Columbia...... 66 II. In any event, direct liability to the plaintiff is not required for a contribution claim under the Negligence Act...... 66 (a) Contribution under the Negligence Act turns on fault, not liability...... 66 (b) Giffels is distinguishable or should no longer be followed...... 69 III. The defendants have an arguable contribution claim at common law...... 71 E. The defendants have an arguable claim for equitable indemnity...... 72 F. The defendants have arguable claims for negligent design and failure to warn...... 75 I. There are no policy concerns about indeterminate liability for economic loss because only the defendants have proximity with Canada and only British Columbia may sue the defendants for economic loss...... 75 II. The defendants’ failure to warn claim concerns operational conduct, not a policy decision...... 77 PART IV – SUBMISSIONS CONCERNING COSTS ...... 79
PART V – ORDERS REQUESTED...... 79
PART VI – TABLE OF AUTHORITIES...... 80
PART VII – PROVISIONS DIRECTLY AT ISSUE ...... 83
1 Consolidated Factum of Respondents on Appeal
PART I – STATEMENT OF FACTS
A. Overview
1. The respondents/appellants by cross-appeal are defendants in the action brought by Her Majesty the Queen in Right of British Columbia (“British Columbia”) under the Tobacco Damages and Health Care Costs Recovery Act.1 The appellant/respondent by cross-appeal, the federal Crown as represented by the Attorney General of Canada (“Canada”), is a party to that action because of third party notices filed against it by most of the defendants. Canada moved to strike the third party notices, contending that they disclose no reasonable cause of action. A majority of the Court of Appeal for British Columbia held that a single claim for negligent misrepresentation should survive.
2. The defendants’ negligent misrepresentation claim is made against the backdrop of the longstanding relationship between Canada and the defendants detailed in the third party notices. Over decades, Canada devised a series of health and education programmes intended to reduce the deleterious effects of smoking and to inform Canadians about the same. To implement these programmes, Canada made wide-ranging representations to the defendants on topics including the efficacy of warning labels, appropriate advertising practices and low-“tar” cigarettes, which Canada represented as posing a reduced health risk to smokers.
3. Indeed, Canada became a developer and promoter of tobacco for low-“tar” cigarettes, and Canada’s tobacco eventually dominated the marketplace. Agriculture Canada selectively bred tobacco to yield a higher ratio of nicotine to “tar”, so that lower-“tar” cigarettes and particularly very low-“tar” cigarettes would be palatable to smokers. Agriculture Canada then licensed its tobacco to growers in exchange for royalties. For its part, Health Canada urged the defendants to use that tobacco to make low-“tar” cigarettes, told the defendants those cigarettes were safer and encouraged the defendants to market those cigarettes so as to move smokers to them. By 1983, tobacco developed and licensed by Canada was being used in nearly all cigarettes sold in British Columbia.
4. On this appeal, Canada asks this Court to strike the defendants’ negligent misrepresentation claim without a trial. Canada says that the claim fails at both stages of the Anns/Cooper test. At the first stage, Canada argues that the defendants’ liability to British Columbia was not foreseeable and
1 S.B.C. 2000, c. 30 (the “Costs Recovery Act” or “Act”).
2 Consolidated Factum of Respondents on Appeal that there is no proximity. At the second stage, Canada argues that even if a prima facie duty of care existed, policy concerns would negate it.
5. An order striking pleadings is reserved for claims that are radically defective, so that allowing them to proceed would result in an abuse of process. It must be plain and obvious that the claim is certain to fail. Any other approach denies access to justice and dampens the development of the common law. Here, it is not plain and obvious that the defendants’ claim fails under the Anns/Cooper test, and so Canada’s appeal must be dismissed.
6. As to proximity, it is not plain and obvious that Canada lacked the necessary close and direct relationship with the handful of companies for which it produced, licensed and made available a vital ingredient of their major product. A duty by Canada to take care in its representations to them concerning the safety of that ingredient is consistent with Canada’s duties regarding public health.
7. With respect to foreseeability, Canada misconstrues the relevant question, framing it too narrowly. Canada argues that it must have been reasonably foreseeable that its representations would cause the defendants to be liable under the Costs Recovery Act. However, all that is required in negligence cases is foresight of the type or class of harm that carelessness might cause. The proper question is thus whether Canada could have expected the defendants to incur some form of liability to others if Canada’s representations proved incorrect. The answer to that question is “yes”, and certainly not plainly and obviously “no”.
8. An arguable prima facie duty thus established, no policy reasons plainly and obviously negate it. There is no problem of indeterminate liability because Canada knew the defendants’ identities, and the defendants relied on Canada’s representations for their intended purpose. Moreover, Canada’s liability to the defendants is subject to the same geographic, demographic and other constraints as the defendants’ liability to British Columbia, meaning it is far from indeterminate.
9. Canada also argues that the defendants’ claim relates to policy-making. Here, however, Canada was not making policy, it was making tobacco. It was urging use of that tobacco on the defendants, and receiving royalties in connection with that use. Canada’s policy cannot have been to misrepresent to the defendants the relative safety of its new tobacco strains and other matters affecting public health, knowing the potentially harmful impact on smokers and the liability to which the defendants could be exposed. If the alleged misrepresentations happened, they were mistakes at the operational level, and Canada may be liable unless it met the standard of care.
3 Consolidated Factum of Respondents on Appeal
10. The Court of Appeal was right to decide that the defendants’ claim for negligent misrepresentation should not be struck. This Court should dismiss Canada’s appeal.
B. Key facts2
11. In 2001, British Columbia sued the defendants under the Costs Recovery Act. British Columbia alleges that defendants committed various “tobacco related wrongs” within the meaning of the Act, causing British Columbians to smoke cigarettes and thereby to develop disease. British Columbia seeks to recover the alleged cost of treating such disease.
12. The “tobacco related wrongs” allegedly committed by the defendants include defective design, failure to warn, misrepresentation and breach of various consumer protection statutes.3 British Columbia’s pleadings make numerous allegations concerning the supposed properties of tobacco used in cigarettes, the purported inadequacy of health warnings offered by defendants and the supposed assertion by defendants that low-“tar” cigarettes are safer than other cigarettes.4
13. In 2007, various of the defendants filed third party notices against Canada. The third party notices are founded on multiple legal theories, including that Canada is directly liable to the defendants in negligence. Within the negligence category, the Court of Appeal labelled the defendants’ claims as (i) negligent misrepresentation, (ii) negligent design and (iii) failure to warn. The Court of Appeal sustained only the negligent misrepresentation claim.
14. The core of the defendants’ negligent misrepresentation claim is that Canada made representations, and gave advice and directions, that led the defendants to engage in conduct now alleged to constitute “tobacco related wrongs”. The defendants say that they reasonably relied on Canada’s representations, advice and directions, and that it was reasonably foreseeable to Canada that, if this reliance caused the defendants to breach any duties, they would be exposed to liability.
15. The third party notice of Rothmans, Benson & Hedges Inc. and Rothmans Inc.5 (the “RBH/RI TPN”) summarizes some of Canada’s representations to the defendants:
2 There is a more extensive statement of facts in these defendants’ Consolidated Factum of Appellants on Cross-Appeal. 3 Amended Statement of Claim (Appellant’s Record (“A.R.”), Vol. II, p. 6) (“Amended Claim”), at paras. 49-62 and 84-90. 4 See, e.g., Amended Claim, at paras. 39-46, 51, 53, 57-58 and 77. 5 A.R., Vol. II, p. 115.
4 Consolidated Factum of Respondents on Appeal
(a) that warning labels were unnecessary, ineffective and potentially counterproductive to inform consumers of the health risks of smoking and the properties of cigarettes;
(b) the warning labels that were used were adequate to inform the public of the risks of smoking;
(c) that “tar” and nicotine measuring standards provided reliable information to consumers on which consumers could make informed smoking decisions;
…
(e) that light and mild cigarettes would reduce the incidence of tobacco related diseases in the population of consumers;
(f) compensation [by smokers changing their smoking patterns], to the extent it occurs, is partial; and
(g) there are no increased health risks associated with or caused by the design or development of tobacco strains by Officials at Agriculture Canada that were sold or licensed to [defendants] for use in their tobacco products sold to consumers in British Columbia.6
16. Elsewhere, the third party notices give particulars of these representations, including particulars of when and by whom specifically the representations were made. For example, as to whether warnings should be placed on cigarette packages and what the content of any warnings should be, the RBH/RI TPN states as follows:
43. In 1965 … Officials advised cigarette manufacturers that it was unnecessary or inadvisable to issue definitive public statements at that time on the relationship between smoking and health.
…
53. … In particular, in May 1965 the Deputy Minister of Health asserted that the labelling of cigarette packages with health warnings was unrealistic and “silly”.
…
60. … In December 1972, Officials requested the inclusion of the phrase, “avoid inhaling” on packaging and requested the same warning be used in advertising, which changes were agreed to by cigarette manufacturers and introduced in 1975.
6 RBH/RI TPN, at para. 175.
5 Consolidated Factum of Respondents on Appeal
17. Canada did not file any defence to the third party notices. Instead, it moved to strike them in their entirety, on the ground that they disclosed no reasonable cause of action.
18. At first instance, Canada’s motion was successful.7 The Court of Appeal for British Columbia, however, restored the third party notices in part.8
19. Considering all the facts alleged in the third party notices, a majority of the Court of Appeal held that it was not plain and obvious that Canada had no prima facie duty of care to the defendants. Writing for the majority, Tysoe J.A. found that the foreseeability and proximity requirements imposed at the first stage of the Anns/Cooper test were arguably satisfied.9
20. At the second stage of the Anns/Cooper test, the majority held that Canada’s prima facie duty of care was not plainly and obviously negated by policy concerns.10 Tysoe J.A. referred to his reasons in Knight v. Imperial Tobacco Canada Limited.11 There, he stated that “[g]enerally speaking, the cause of action for negligent misrepresentation represents a significant exception to the exclusionary rule against recovery of economic loss”,12 and that “the assessment of policy considerations relevant to the issue of whether [Canada’s] prima facie duty of care should be negated … ought not be concluded at this early stage without the benefit of evidence exploring Canada’s actions in developing the tobacco strains for which it has received license fees and royalties”.13
PART II – QUESTIONS IN ISSUE
21. The essential question on this appeal is whether it is so obvious that the defendants’ negligent misrepresentation claim against Canada is radically defective and bound to fail that it should be struck preliminarily, depriving the defendants of any response by Canada, discovery or trial. As the Court of Appeal concluded, the answer to that question is “no”.
7 2008 BCSC 419 (A.R., Vol. I, p. 3) (“BCSC Decision”). 8 2009 BCCA 540 (A.R., Vol. I, p. 36) (“BCCA Decision”). 9 BCCA Decision, at paras. 70-83. 10 BCCA Decision, paras. 84-87. 11 2009 BCCA 541 (A.R., Vol. I, p. 80) (“Knight”). 12 Knight, at para. 71. 13 Knight, at para. 87.
6 Consolidated Factum of Respondents on Appeal
PART III – STATEMENT OF ARGUMENT
A. Since this appeal arises from a motion to strike, Canada must show that it is plain and obvious that the defendants’ claim has no chance of success under the Anns/Cooper test.
22. This appeal arises from a motion to strike pleadings. An order striking pleadings is a severe remedy that should be granted only rarely, where it is “beyond reasonable doubt” that a claim “contains a radical defect” and is thus “certain to fail”.14 It must be “plain and obvious” that the claim “amounts to an abuse of process”.15 If the claim’s viability depends on a “close analysis” of the law,16 or a “difficult and important” legal point, it may be critical to let it proceed to trial.17
23. There are at least three reasons for this stringent approach. First, an order striking pleadings deprives litigants of their day in court, disposing of claims without any form of trial. Second, it denies access to the discovery process and thus to the unearthing of facts that might fortify otherwise tenuous claims. Third, the required determination of legal questions on a preliminary basis, in an evidentiary vacuum, risks deadening the development of the common law.18
24. Whether Canada had a duty of care to the defendants depends on the test set out in Anns v. Merton London Borough Council,19 as modified by Cooper v. Hobart.20 That test has been summarized as follows:
The test for determining whether a person owes a duty of care involves two questions: (1) Does the relationship between the plaintiff and the defendant disclose sufficient foreseeability and proximity to establish a prima facie duty of care; and (2) If so, are there any residual policy considerations which ought to negate or limit that duty of care?21
14 Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 (“Hunt”), at p. 980, per Wilson J. 15 Hunt, at p. 988, per Wilson J. 16 Adbusters Media Foundation v. Canadian Broadcasting Corporation, 2009 BCCA 148, at paras. 14-15, per Donald J.A., leave to appeal refused, [2009] S.C.C.A. No. 227 (QL). 17 Hunt, at pp. 990-91, per Wilson J. See also, e.g, Owners, Strata Plan LMS 1328 v. City of Surrey, et al., 2001 BCCA 693 and Sanofi-Aventis Canada Inc. v. Novopharm Ltd., 2010 FC 150. 18 See Hunt, at p. 990-91 and Schreiber v. Canada (Attorney General) (2001), 52 O.R. (3d) 577 (C.A.) (“Schreiber”), at para. 15, aff’d, [2002] 3 S.C.R. 269, 2002 SCC 62. 19 [1978] A.C. 728 (H.L.). 20 [2001] 3 S.C.R. 537, 2001 SCC 79. 21 Hill v. Hamilton-Wentworth (Regional Municipality) Police Services Board, [2007] 3 S.C.R. 129, 2007 SCC 41 (“Hill”), at para. 20, per McLachlin C.J.
7 Consolidated Factum of Respondents on Appeal
B. The defendants’ claim arguably satisfies the first stage of the Anns/Cooper test.
I. The potential for harm to the defendants was reasonably foreseeable.
25. Canada argues that harm to the defendants was not foreseeable because Canada could not have anticipated “that a provincial government might create a wholly new type of civil obligation to reimburse costs incurred by a provincial health care scheme in respect of defined tobacco related wrongs, with unlimited retroactive and prospective reach”.22 That highly specific description of what was purportedly unforeseeable misconstrues the foreseeability requirement in negligence cases. It has never been necessary for a party to “foresee the precise type of damage or sequence of events that would result from its negligence”.23
26. In the Court of Appeal, Tysoe J.A. found that Canada could have reasonably foreseen that the defendants “would suffer harm”, in the form of liability, if “light and mild cigarettes were more hazardous to the health of smokers than regular cigarettes”, and that this satisfied the requirement of foreseeability.24
27. In considering foreseeability at a more general level, the Court of Appeal’s decision is consistent with Hughes and The Queen v. Côté et al.25 According to Hughes, what must have been foreseeable by a defendant is the “type or kind of occurrence which in fact happened”, not “the precise concatenation of circumstances” that affected the plaintiff.26 Similarly, Côté states that “[i]t is not necessary that one foresee the precise concatenation of events”; it is sufficient for “the class or character of injury” to have been reasonably foreseeable in “a general way”.27
28. Here, the “type or kind of occurrence” or “class or character of injury” that must have been foreseeable “in a general way” was liability on the part of the defendants if the low-“tar” cigarettes manufactured with tobacco designed by Canada and promoted by Canada as safer actually turned out
22 Appellant’s Factum, at para. 36. 23 Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., [1997] 3 S.C.R. 1210 (“Bow Valley”), at para. 76, per McLachlin J. (as she then was), citing Hughes v. Lord Advocate, [1963] A.C. 837 (H.L.) (“Hughes”) and Overseas Tankship (U.K.) Ltd. v. Miller Steamship Co. Pty., [1967] 1 A.C. 617 (P.C.). 24 BCCA Decision, at para. 78. 25 [1976] 1 S.C.R. 595 (“Côté”). There is good reason to insist that foreseeability be considered at a general level at the duty-of-care stage: even where a duty of care is made out, a defendant can always argue that the relatively low foreseeability of a particular type of harm goes to the standard of care, or to the remoteness of damages. 26 Hughes, at p. 853, per Lord Morris, citing Harvey v. Singer Manufacturing Co., [1960] S.C. 155, at p. 172, per Lord Mackintosh. 27 Côté, at p. 604 (internal citations omitted), per Dickson J. (as he then was).
8 Consolidated Factum of Respondents on Appeal to be just as or more hazardous than regular cigarettes. In arguing to the contrary, and advancing a theory that it must have specifically foreseen a claim under costs recovery legislation, Canada adopts the “precise concatenation” standard that this Court rejected.
29. Even if this Court were to treat a claim under costs recovery legislation as what must have been foreseeable, it is not plain and obvious that it was not. In the Court of Appeal, Tysoe J.A. went on to find that Canada arguably could have foreseen harm to the defendants under the Costs Recovery Act.28 In doing so, he noted that statutes creating similar claims have existed for decades.29
30. Canada attempts to deal with these other statutes by asserting that only “subrogated statutory claims were in existence prior to the Costs Recovery Act”,30 whereas claims under the Act are “direct and distinct”.31 Canada’s argument is unsound, for two reasons.
31. First, the distinction between subrogated and non-subrogated claims makes no difference for purposes of the Hughes and Côté standard. Whether the claim is subrogated or not, the defendants’ liability to government for the costs of treating disease suffered by third parties – the harm that must have been foreseeable – is the same.
32. Second, a direct and distinct right of action in a government to recover health care costs is not new. For roughly a century, the Canada Shipping Act provided that the government could sue to recover medical expenses paid to treat an illness suffered by a seaman overseas.32
II. There was proximity between Canada and the defendants.
33. Canada also asserts that the Court of Appeal erred in finding that the proximity requirement of the Anns/Cooper test was arguably satisfied. It points to (i) statutes setting forth Canada’s regulatory mandates, (ii) the Court of Appeal’s purported failure to explain the nature of the “special relationship” between Canada and the defendants and (iii) alleged conflicts in Canada’s duties to the public and the imposition of any private law duty to the defendants. None of these points has merit.
28 BCCA Decision, at para. 79. 29 BCCA Decision, at paras. 80-83. 30 Appellant’s Factum, at para. 40 (emphasis added). 31 Costs Recovery Act, s. 2(1). 32 Canada Shipping Act, R.S.C. 1906, c. 113, ss. 215-17; Canada Shipping Act, R.S.C. 1985, c. S-9, ss. 284-86.
9 Consolidated Factum of Respondents on Appeal
(a) Proximity can be founded on the defendants’ reasonable and foreseeable reliance.
34. This Court has specified two requirements for proximity in negligent misrepresentation cases: “(a) the defendant ought reasonably to foresee that the plaintiff will rely on his or her representation; and (b) reliance by the plaintiff would, in the particular circumstances of the case, be reasonable”.33
35. Here, it is at the very least arguable that both requirements are met. Canada ought reasonably to have foreseen, as it researched smoking and health, then developed supposedly safer strains of tobacco and promoted them to the defendants, explicitly asking them to use that tobacco to produce low-“tar” cigarettes, that the defendants would rely on its representations about those strains and various other matters bearing directly on the health of Canadians. At the same time, the defendants’ reliance on Canada’s representations was more than reasonable. Given Canada’s professed expertise on the subjects of tobacco and smoking, not to mention its mandate to protect public health, it would have been untenable for the defendants to conclude that Canada was passing along misinformation and on that basis to ignore Canada’s representations about its tobacco and the safety of low-“tar” cigarettes incorporating that tobacco.
36. If Canada were a private company engaged in the same conduct alleged here, proximity would be unquestionable. No court would find it plain and obvious that a private company that promoted a component that it had developed could not be sued for misrepresenting to a manufacturer of consumer products the risks of that component or the risks of products to be made with it. Indeed, the law is clear that private companies owe a duty of care in making representations about their products to intermediate manufacturers who use them.34
37. In an attempt to argue that the defendants’ reliance on Canada’s representation was not reasonable, Canada sets forth “five general indicia” of reasonable reliance identified by Professor Feldthusen and approved in Hercules and denies the applicability here of all but the fourth:
(1) The defendant had a direct or indirect financial interest in the transaction in respect of which the representation was made.
(2) The defendant was a professional or someone who possessed special skill,
33 Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165, at para. 24 (“Hercules”), per La Forest J. 34 See, e.g., C & B Corrugated Containers Inc. v. Quadrant Marketing Ltd., [2005] O.J. No. 1665 (S.C.J.) (QL), at paras. 42-43, in which Herold J. found that a cardboard supplier had a duty to avoid negligent misrepresentations to a company using the supplier’s cardboard in marketing displays.
10 Consolidated Factum of Respondents on Appeal
judgment or knowledge.
(3) The advice or information was provided in the course of the defendant’s business.
(4) The information or advice was given deliberately, and not on a social occasion.
(5) The information or advice was given in response to a specific enquiry or request.
While these indicia should not be understood to be a strict “test” of reasonableness, they do help to distinguish those situations where reliance on a statement is reasonable from those where it is not.35
38. In denying the applicability of all but (4), Canada ignores the allegations in the third party notices. As to (1), Canada is alleged to have received licensing fees and royalties for the tobacco strains it developed and promoted.36 As to (2), the third party notices are replete with allegations that officials at Agriculture Canada and Health Canada promoted themselves as having special skill, judgment or knowledge. Regarding (3), although officials at Agriculture Canada and Health Canada were not operating a “business” in a commercial sense, they were acting within the scope of their jobs and were developing and promoting strains of tobacco for commercial use. In this context, Professor Feldthusen’s reference to “business” should not be read so narrowly that a court must automatically exclude the activities of anyone outside the private sector even if those activities involve the development, promotion and licensing of a commercial product. In other words, relating the pleaded facts to the indicia does not detract from, but rather supports, the proposition that the defendants’ reliance was reasonable.
(b) The defendants do not rely on Canada’s statutory duties to establish proximity.
39. Canada’s principal argument against proximity is that no statute provides that Canada shall be liable to the defendants. In Canada’s words, “consideration of the governing statutory scheme is central to the question of whether or not proximity occurs between a plaintiff and a statutory public authority”, and statutes concerning the regulation of smoking and health “provide no indication of a
35 Appellant’s Factum, at paras. 67-68, quoting Hercules, at para. 43, per La Forest J. 36 RBH/RI TPN, at para. 130.
11 Consolidated Factum of Respondents on Appeal duty to tobacco manufacturers”. Canada relies on numerous decisions of lower courts in which claims based on a government’s negligent exercise of regulatory duties were rejected.37
40. At the outset, it should be observed that many of the statutes cited by Canada are irrelevant because they post-date the key time period – the 1960s and 70s – in which the conduct by Canada that is at issue in defendants’ negligent misrepresentation claim occurred.38
41. More importantly, every one of the decisions cited by Canada involved a claim where the plaintiff’s alleged proximity to the government was grounded only in some statutory duty said to exist for the plaintiff’s benefit but that the government had failed to perform.39 Put slightly differently, the argument for proximity hinged upon the statute. In each case, the possibility of proximity was rejected because the statutory duty was found to exist for the benefit of the public at large, not the particular plaintiff.
42. The situation here is very different. Canada’s duty rests on its actual relationship with the defendants and the representations that Canada made to them, not on an inference from a statute. The third party notices allege that Canada wanted low-“tar” cigarettes. It told the defendants that they would reduce the hazards of smoking; told them to produce and sell and advertise those cigarettes and developed the tobacco necessary for the defendants to do so; and told the defendants that they should move the entire smoking market down-“tar”. Relying on these representations, the defendants did so, only to be sued by British Columbia for having done so.
43. Canada played an active, central and guiding role in the defendants’ industry for many decades, and Canada took on a unique role as the developer and promoter of a key ingredient for their products. It is Canada’s intimate relationship with the defendants on the facts, not some abstract statutory duty to the defendants, that grounds proximity in this case.
37 Appellant’s Factum, at paras. 46-48. 38 For example, Canada extensively quotes the Tobacco Act, S.C. 1997, c. 13, and cites the Tobacco Products Control Act, S.C. 1988, c. 20, even though these statutes were not passed until 1997 and 1988, respectively. 39 In Eliopoulos Estate v. Ontario (Minister of Health and Long-Term Care) (2006), 276 D.L.R. (4th) 411 (Ont. C.A.), leave to appeal refused, [2006] S.C.C.A. No. 514 (QL), the claim was that the government had failed in its duty under the Health Protection and Promotion Act to protect the health of Ontarians, including the plaintiff, in implementing a plan to prevent the spread of West Nile Virus. In Klein v. American Medical Systems (2006), 278 D.L.R. (4th) 722 (Ont. C.A.), the claim was that Health Canada failed to fulfill its duty under the Food and Drugs Act to protect the public health, including that of the plaintiff and other recipients of medical devices, by licensing one such device without independent testing. In Swift Current (City) v. Saskatchewan Power Corp., 2007 SKCA 27, the plaintiff claimed that the government had not fulfilled a duty under The Crown Corporations Act, 1993 to review and approve a public utility’s rate increases with the plaintiff and other customers in mind.
12 Consolidated Factum of Respondents on Appeal
44. Elsewhere, Canada’s counsel in this appeal has acknowledged that proximity between the government and private parties may be founded on their actual relationship, rather than on a statute:
In cases where the Crown or another public authority has been held to owe a private law duty of care to an individual or an identifiable group of individuals, there has been evidence of direct contact between the plaintiff (class) and the defendant or evidence of statements made directly to the plaintiff (class) and not to the public at large that were of such a nature to create a proximity and a duty of care.40
45. To the extent Canada now argues that proximity derived from a statute is necessary to find a prima facie duty of care, this point is far from plain and obvious. In the eyes of one respected academic, acceptance of the point would result in an impossibility of liability on the part of government, whatever its actual relationship with a would-be plaintiff. Professor Klar writes:
As I have argued previously, the search for proximity within statutory provisions is inconsistent with the spirit, if not the letter, of the Supreme Court of Canada’s decision in Saskatchewan Wheat Pool v. Canada[, [1983] 1 S.C.R. 205] and is, at any event, generally a dead-end search in so far as plaintiffs are concerned. … [T]he language of Saskatchewan Wheat Pool made it clear that in the absence of a common law duty of care, a statute should not be interpreted as giving rise to a common law right of action.41
46. On both this view and the acknowledgment by Canada’s counsel, statutory indications of proximity cannot be a necessary condition for a prima facie duty.
(c) The alleged duty to the defendants poses no conflict with Canada’s duties to the public.
47. Canada’s final argument against proximity is that a duty of care to the defendants would conflict with its duty to protect the public health. This argument is meritless.
48. As an initial matter, McLachlin C.J. has stated that “conflict or potential conflict does not in itself negate a prima facie duty of care; the conflict must be between the novel duty proposed and an ‘overarching public duty’, and it must pose a real potential for negative policy consequences”.42
40 Paul Vickery and Travis Henderson, “Class Actions Against the Crown: What’s New and What’s Important”, at p. 8 (internal citations omitted), in 6th Annual Conference on Crown Liability (Toronto: Osgoode Hall Law School, 2009). 41 See Lewis Klar, Q.C., “Evolving Landscape of Crown Liability in Tort”, at p. 5, in 6th Annual Conference on Crown Liability (Toronto: Osgoode Hall Law School, 2009). See also Lewis Klar, Q.C., “The Tort Liability of the Crown: Back to Canada v. Saskatchewan Wheat Pool” (2007) 32 Advocates’ Quarterly 293. 42 Hill, at para. 40.
13 Consolidated Factum of Respondents on Appeal
More recently, Cromwell J. has emphasized that negative consequences do not “follow from every imposition of a duty of care on those who carry out statutory or public duties”.43
49. Despite these admonitions, Canada provides only conclusory assertions as to the nature of supposed conflicts between its public duties and a duty to avoid negligent misrepresentations to the defendants. For example, Canada states “the creation of a duty of care between Canada and tobacco manufacturers would undermine Canada’s ability to create and implement policies to protect public health”.44 Canada goes on to say that it could not have fulfilled its duties to its various constituencies – such as “smokers and non-smokers, young persons, anti-tobacco organizations, tobacco industry employees, agricultural interests and the tobacco manufacturers themselves” –45 if it had been required to act with reasonable care in making representations to the defendants.
50. But Canada never explains how the defendants’ interests diverge from the interests of Canada’s other constituencies, or how it might be necessary for Canada to make misrepresentations to the defendants in order to fulfill public duties owed to those other constituencies. The fact is that everyone would be better served by a duty on Canada to take care. As Tysoe J.A. observed in Knight, “[i]t does not necessarily seem inconsistent to its duty to protect the interests of the public to require Canada to take reasonable care in providing accurate information about the strains of tobacco developed by it”.46 Here, British Columbia alleges that it was wrong to suggest that lower-“tar” cigarettes presented a reduced risk to smokers. If that is so, Canada was wrong, and its representations to the defendants, on which they relied, were wrong too. Canada would have better met its duties to all the constituencies it mentions by not making the representations that it did.
51. To undermine the harmony between its public duties and the alleged duty to the defendants, Canada repeatedly portrays the latter too loosely, as a duty “to be mindful of the economic interests of tobacco manufacturers”.47 This is incorrect. The defendants do not claim Canada should be held accountable if it did not mind the defendants’ “economic interests” in general. Rather, the defendants claim that, once engaged in operational activities such as the development and promotion
43 Fullowka v. Pinkerton’s of Canada Ltd., [2010] 1 S.C.R. 132, 2010 SCC 5 (“Fullowka”), at para. 72. 44 Appellant’s Factum, at para. 55. 45 Appellant’s Factum, at para. 56. 46 Knight, at para. 88. 47 See, e.g., Appellant’s Factum, at paras. 2-3, 51 and 59-60.
14 Consolidated Factum of Respondents on Appeal of tobacco strains and advising concerning warnings, Canada had a duty to take reasonable care that its representations were correct. Canada’s supposed conflict of duties is illusory.
C. The defendants’ claim arguably satisfies the second stage of the Anns/Cooper test.
52. At the Anns/Cooper test’s second stage, Canada argues that policy concerns trump any prima facie duty of care. Canada (i) points to the dangers of indeterminate liability, (ii) argues that its decisions were matters of policy, not operational and (iii) asserts that a duty to the defendants would create an unintended insurance scheme. None of these contentions has plain and obvious merit.
I. Evidence is needed to determine if Canada’s prima facie duty should be negated.
53. Canada’s alleged policy concerns must be considered in the context of an evidentiary record.
54. Even in the context of a trial, Canada would bear a heavy burden to show that policy concerns should negate its prima facie duty of care to defendants.48 This Court has recently explained that any such policy concerns “must be more than speculative” – they “must be compelling; a real potential for negative consequences of imposing the duty of care must be apparent”.49 Even in claims for economic loss, where policy concerns about indeterminate liability often loom large, those large concerns have “not always carried the day to exclude a duty of care”.50
55. Here, in the context of a motion to strike pleadings without a trial or even discovery, Canada’s burden is even more onerous. It must show that the existence, weight and apparency of a competing policy concern are plain and obvious.
56. One of the main policy concerns raised by Canada is the danger of indeterminate liability. At the pleadings stage, courts frequently refuse to negate a prima facie duty based on this or other concerns, finding that an evidentiary record is required.
57. For example, in Anger v. Berkshire Investment Group Inc., where directors of an investment company argued that indeterminate liability concerns should negate any duty to clients who received bad investment advice from the company’s sales personnel, the Court of Appeal for Ontario stated:
48 Childs v. Desormeaux, [2006] 1 S.C.R. 643, 2006 SCC 18, para. 13. 49 Fullowka, at para. 57, per Cromwell J. See also Hill, at paras. 47-48. 50 Fullowka, at para. 70, per Cromwell J.
15 Consolidated Factum of Respondents on Appeal
To attempt to apply policy considerations in a vacuum, and without the benefit of a record, would be contrary to the principles upon which our case law has long been understood to develop. That is why [Hunt] provides that a Court should strike a claim only if it is clear that in law the case cannot succeed, based on decided principles directly applicable to the case as set out in the pleadings. The Court does not develop the law, including policy considerations, in order to strike a claim. That should only be done after a trial.51
58. Similarly, in Hughes v. Sunbeam Corp. (Canada) Ltd., the Court of Appeal for Ontario stated that, although policy concerns (including concerns about indeterminate liability) might make it “problematic” to impose a duty, the concerns were “better addressed on an evidentiary record”.52
II. Canada’s prima facie duty is not negated by concerns about indeterminate liability.
59. In any event, Canada’s concerns about indeterminate liability have no merit, and certainly are not plain and obvious.
(a) Canada knew the defendants’ identities and its statements were used for their intended purpose.
60. There is nothing “indeterminate” about Canada’s potential liability for negligent misrepresentation in this case. This Court explained in Hercules that, in negligent misrepresentation claims, “where the defendant knows the identity of the plaintiff (or of a class of plaintiffs) and where the defendant’s statements are used for the specific purpose or transaction for which they were made, policy considerations surrounding indeterminate liability will not be of any concern since the scope of liability can readily be circumscribed”.53
61. Here, Canada knew the identities of the defendants, with whom it maintained close contact. It also knew that the defendants would rely on its statements, especially regarding the health risks of the tobacco that Canada itself developed and promoted to the defendants. Canada not only advised defendants but also directed them as to the very activities now alleged by British Columbia to be
51 [2001] O.J. No. 379 (QL) (“Anger”), at para. 15, per Feldman J.A. 52 (2002), 61 O.R. (3d) 433 (C.A.) (“Sunbeam”), at para. 35, per Laskin J.A., leave to appeal refused, [2002] S.C.C.A. No. 446 (QL). See also, e.g., Haskett v. Transunion of Canada Inc. (2003), 224 D.L.R. (4th) 419 (Ont. C.A.), at para. 52, leave to appeal refused, [2003] S.C.C.A. No. 208 (QL). 53 Hercules, at para. 37, per La Forest J. See, e.g., Manufacturers Life Insurance Co. v. Pitblado & Hoskin et al., 2009 MBCA 83, at para. 104 (rejecting concerns about indeterminacy where the defendants could expect the plaintiff’s reliance on their representations), leave to appeal refused, [2009] S.C.C.A. No. 441 (QL).
16 Consolidated Factum of Respondents on Appeal
“tobacco related wrongs”. The defendants had no reasonable choice other than to rely upon Canada’s representations. Canada knew, and intended, that the defendants’ reliance would translate into a change in the cigarettes smoked by millions of Canadians. Thus, the defendants used Canada’s statements “for the specific purpose or transaction for which they were made”, the conditions described in Hercules are met, and indeterminate liability is not a concern.
(b) Liability is not indeterminate as to amount, time or class.
62. Alternatively, even were Hercules not dispositive, liability is still not indeterminate. Indeterminate liability means “liability in an indeterminate amount for an indeterminate time to an indeterminate class”.54 In the negligent misrepresentation claim at issue here, the existence of indeterminate liability is far from plain and obvious, for the reasons below.
63. First, Canada’s prima facie duty is founded on its unique relationship with the very small and readily identifiable group of tobacco manufacturers to whom it promoted its tobacco strains and made representations. Only these tobacco manufacturers – the defendants – have the proximity with Canada needed for a prima facie duty. Canada’s potential liability is thus to a determinate class.
64. Second, Canada’s potential liability to the defendants is limited to the defendants’ liability to British Columbia, which itself is limited by geographic, demographic and other boundaries: any health care costs claimed must be for the treatment of “insured persons” in British Columbia for “tobacco related diseases” caused or contributed to by “tobacco related wrongs”.55 Evidence may be required to determine the scope of these costs, but uncertainty as to the total amount does not render the liability indeterminate, especially at this preliminary stage.56
54 Appellant’s Factum, at para. 75, quoting Ultramares Corp. v. Touche, 174 N.E. 441 (N.Y. 1973), at p. 444, per Cardozo C.J. 55 The same is true of Canada’s potential liability to the defendants respecting their liabilities to other provinces. The defendants’ liability to each province is limited by the same sort of boundaries, since each province’s costs recovery legislation is substantially similar to British Columbia’s Costs Recovery Act. 56 Canada states that liability in this case may include the health care costs of non-smokers arising from environmental tobacco smoke; Canada also states that liability is not limited to costs resulting from a particular type of tobacco product: Appellant’s Factum, at para. 80. Canada is wrong on both accounts. British Columbia does not claim for the health care costs of non-smokers, and limits its claim to costs resulting from cigarettes. Indeed, British Columbia’s pleadings open by stating that “the Government brings this action to recover the costs of health care benefits on an aggregate basis, provided for a population of insured persons as a result of smoking cigarettes”: Amended Claim, at para. 2 (emphasis added). See also, e.g., Amended Claim, at paras. 54, 62, 71, 75, 83, 87 and 90.
17 Consolidated Factum of Respondents on Appeal
65. Canada points to the potential cumulative dollar value of claims under the Act and similar statutes passed in other provinces. It mentions a $50 billion claim in Ontario to speculate that its eventual liability to the defendants could be “on a scale of hundreds of billions of dollars” unless this Court intervenes.57
66. This argument, focused on the dollar amounts potentially at issue, cannot support an indeterminacy claim for at least two reasons. First, the $50 billion claim in Ontario is a pleader’s fantasy. It is pointless at any stage, much less on a motion to strike, to start tallying up provinces’ aspirational claims. Second, and in any event, the possibility of a large judgment against Canada provides no principled reason for negating its prima facie duty of care. As the Alberta Court of Appeal has explained, “[t]he word ‘indeterminate’ does not mean large”; it means not “fixed in extent, amount, character, etc.; of uncertain size, etc.; indefinite”.58 Wide liability does not equal indeterminacy, particularly here, where Canada always knew and intended that its representations and encouragement might affect the health of all smokers and that any liability in that regard would therefore be wide.
67. A properly demanding approach to claims of indeterminacy is well illustrated by Baric v. Tomalk.59 There, a patient sued the oral surgeons who implanted a medical device in her jaw. The surgeons instituted third party claims against Health Canada for negligence in its monitoring, approving, testing and regulating of the device. The court denied the government’s motion to strike, explaining that Health Canada “is well-placed to assess the number of people using approved medical devices, and to anticipate the number of claimants should it be negligent in its regulatory role”.60
68. The negligent misrepresentation claim made here presents an even lesser indeterminacy concern than that in Baric, as the boundaries of the Act and British Columbia’s pleadings confine liability more precisely. Furthermore, as in Baric, the number of potential claimants is known.
III. Canada’s alleged misrepresentations were operational conduct, not policy decisions.
69. Threaded throughout Canada’s factum is an argument that the defendants’ claim is based on Canada’s policy-making rather than on operational conduct. That argument has no merit. This Court
57 Appellant’s Factum, at paras. 5 and 16. 58 Gross v. Great-West Life Assurance Company, 2002 ABCA 37, at para. 38 (internal citations omitted), per curiam. 59 [2006] O.J. No. 890 (S.C.J.) (QL) (“Baric”). 60 Baric, at para. 94, per Pierce J. As in Anger and Sunbeam, the court emphasized the importance of the procedural context to its analysis: Baric, at para. 101.
18 Consolidated Factum of Respondents on Appeal has emphasized that “complete Crown immunity should not be restored by having every government decision designated as one of ‘policy’”,61 as Canada attempts here.
70. The Court has distinguished between policy decisions and operational conduct as follows:
True policy decisions involve social, political and economical factors. In such decisions, the authority attempts to strike a balance between efficiency and thrift, in the context of planning and predetermining the boundaries of its undertakings and of their actual performance. True policy decisions will usually be dictated by financial, economic, social and political factors or constraints.
The operational area is concerned with the practical implementation of the formulated policies, it mainly covers the performance or carrying out of a policy. Operational decisions will usually be made on the basis of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness.62
71. Given the government’s burden to demonstrate that a decision is one of policy, and the sometimes subtle nature of the policy/operational distinction, courts have been rightly reluctant to reject claims at the pleadings stage based on assertions that the claims attack policy.
72. For example, in Sauer v. Canada (Attorney General), the plaintiff alleged that Canada “was grossly negligent in designing and promulgating” one regulation affecting the cattle-feed industry, and in “failing to impose” another.63 Canada moved unsuccessfully to strike the claim. Despite the fact that the impugned regulation-making fell far closer to the field of policy than Canada’s misrepresentations alleged here,64 the Ontario Court of Appeal agreed with the motion judge that the determination should be made on a “more complete evidentiary record”.65
73. Similarly, in Baric, the court found “it would be unwise to deny the [third party] plaintiffs an opportunity to make their case” on the limited record of the pleadings.66 It explained:
61 Just v. British Columbia, [1989] 2 S.C.R. 1228 (“Just”), at p. 1239, per Cory J. 62 Brown v. British Columbia (Minister of Transportation and Highways), [1994] 1 S.C.R. 420, at p. 441 (emphasis added), per Cory J. 63 2007 ONCA 454 (“Sauer”), at para. 56, per Goudge J.A., leave to appeal refused, [2007] S.C.C.A. No. 454 (QL). 64 In an effort to move the defendants’ claim closer to Sauer, Canada asserts that the claim is based on “‘advice and direction’ by Canada that took the form of regulations made under the Tobacco Products Control Act and Tobacco Act”: Appellant’s Factum, at para. 86. That is untrue. The third party notices focus on Canada’s conduct prior to the regulations’ adoption in 1988. None of Canada’s statements alleged by the defendants to have constituted a negligent misrepresentation was at the time contained in regulations or legislation. 65 Sauer, at paras. 57 and 63, per Goudge J.A. 66 Baric, at para. 101, per Pierce J.
19 Consolidated Factum of Respondents on Appeal
It is arguable that the role of Health Canada went beyond making policy about medical devices. The allegations in the pleadings suggest that policy, once made, was purposefully implemented with the end-users of devices in mind. Once a government chooses to occupy a regulatory field, it must do so without negligence. This, too, is an issue for trial on the evidence.67
74. As in Sauer and Baric, it is not plain and obvious on the pleadings that Canada’s representations to the defendants were policy decisions. Although the choice to develop and promote supposedly safer tobacco strains may well have required consideration of “financial, economic, social and political factors”, there was no plain and obvious balancing of those factors required when Canada’s made its representations. One would more easily say that “administrative direction, expert or professional opinion, technical standards or general standards of reasonableness” – operational matters – were at play, given the scientific character of Canada’s representations. Canada cannot, as a matter of policy, have elected to misrepresent the safety of its tobacco to the defendants.
75. Canada tries to conflate policy and operational conduct by attributing its development of tobacco strains to a “policy decision to reduce tar and nicotine in cigarettes” and stating that its representations to the defendants merely “reflected” this policy decision.68 The contention that the representations “reflected” earlier policy decisions cannot convert them into policy, however. All operational conduct “reflects” policy decisions – in the language of Brown, operational conduct is how policy decisions receive “practical implementation” or are “carried out”.69
76. This Court’s reasoning in Just is instructive. Just considered a claim for injuries resulting from a boulder that fell from slopes above a public road. The plaintiff alleged that the government was negligent in its system of road inspections. This Court recognized that the government, having made a policy decision to carry out road inspections, had a duty of care since the manner and quality of the inspection system were “manifestations of the implementation of the policy decision to inspect and were operational in nature”.70
77. Here, Canada may have made a policy decision to seek to reduce the health risk to smokers, but it was at least arguably operational to recommend against warnings, to recommend the content of later warnings, to advise that lower-“tar” cigarettes would present less risk and to develop and
67 Baric, at para. 86, per Pierce J. 68 Appellant’s Factum, at paras. 58 and 91-92 69 Brown, at p. 441, per Cory J. 70 Just, at p. 1246, per Cory J.
20 Consolidated Factum of Respondents on Appeal
promote the tobacco strains that would make those cigarettes a reality. As in Just, these were "manifestations ofthe implementation ofthe policy decision" for which Canadabore a duty ofcare.
IV. Canada's primajacie duty does not create an "unintended insurance scheme".
78. Finally, Canadaargues that anyprimafacie duty ofcare should be negated because it creates an "unintended insurance scheme" for manufacturers.71 This argument simply repeats Canada's point, already answered above,72 that there is no statutory basis for a duty ofcare to the defendants.
79. The defendants' claim against Canada is nothing like an "insurance.scheme". An insurer pays without any fault on its part, as part ofa paid bargain to indemnify the insured against losses caused accidentally or by the fault ofthird parties. Here, Canada's liability is based strictly on its own fault - Canada will be exposed to liability only if, in making its representations, it failed to meet the standard ofcare.
PART IV - SUBMISSIONS CONCERNING COSTS
80. There is no reason to depart from the ordinary rule thatcosts ofthis appeal should follow the event.
PART V- ORDER REQUESTED
81. The appeal should be dismissed.
ALL OF WHICH IS RESPECTFULLY SUBMITT 77th day ofJanuary, 201 I. ~ D.ROSSCLARK,Q.~., 4~~ Q.C., counsel for Rothmans, counsel for Philip Morris MICHAEL A. FEDER, Benson & Hedges Inc. and USA Inc. counsel for Philip Morris Rothmans Inc. International Inc.
71 Appellant's Factum, at paras. 98-101. 72 See paras. 39-46, above. 21 Consolidated Factum of Respondents on Appeal
PART VI – TABLE OF AUTHORITIES
Paragraph(s)
Case law
Adbusters Media Foundation v. Canadian Broadcasting Corporation, 2009 22 BCCA 148, leave to appeal refused, [2009] S.C.C.A. No. 227 (QL)
Anger v. Berkshire Investment Group Inc., [2001] O.J. No. 379 (C.A.) (QL) 57 & 67
Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.) 5, 24, 33 & 52
Baric v. Tomalk, [2006] O.J. No. 890 (S.C.J.) (QL) 67, 68 & 73-74
Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., [1997] 3 25 S.C.R. 1210
Brown v. British Columbia (Minister of Transportation and Highways), [1994] 1 70 & 75 S.C.R. 420
C & B Corrugated Containers Inc. v. Quadrant Marketing Ltd., [2005] O.J. No. 36 1665 (S.C.J.) (QL)
Childs v. Desormeaux, [2006] 1 S.C.R. 643, 2006 SCC 18 54
Cooper v. Hobart, [2001] 3 S.C.R. 537, 2001 SCC 79 5, 24, 33 & 52
Eliopoulos Estate v. Ontario (Minister of Health and Long-Term Care) (2006), 41 276 D.L.R. (4th) 411 (Ont. C.A.), leave to appeal refused, [2006] S.C.C.A. No. 514 (QL)
Fullowka v. Pinkerton’s of Canada Ltd., [2010] 1 S.C.R. 132, 2010 SCC 5 48 & 54
Gross v. Great-West Life Assurance Company, 2002 ABCA 37 66
Harvey v. Singer Manufacturing Co., [1960] S.C. 155 27
Haskett v. Transunion of Canada Inc. (2003), 224 D.L.R. (4th) 419 (Ont. C.A.), 58 leave to appeal refused, [2003] S.C.C.A. No. 208 (QL)
Hercules Managements Ltd. v. Ernst & Young, [1997] 2 S.C.R. 165 34, 37 & 60-62
22 Consolidated Factum of Respondents on Appeal
Paragraph(s)
Hill v. Hamilton-Wentworth (Regional Municipality) Police Services Board, 24, 48 & 54 [2007] 3 S.C.R. 129, 2007 SCC 41
Hughes v. Lord Advocate, [1963] A.C. 837 (H.L.) 25, 27 & 31
Hughes v. Sunbeam Corp. (Canada) Ltd. (2002), 61 O.R. (3d) 433 (C.A.), leave to 58 & 67 appeal refused, [2002] S.C.C.A. No. 446 (QL)
Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 22-23
Just v. British Columbia, [1989] 2 S.C.R. 1228 69 & 76
Klein v. American Medical Systems (2006), 278 D.L.R. (4th) 722 (Ont. C.A.) 41
Manufacturers Life Insurance Co. v. Pitblado & Hoskin et al., 2009 MBCA 83, 60 leave to appeal refused, [2009] S.C.C.A. No. 441 (QL)
Overseas Tankship (U.K.) Ltd. v. Miller Steamship Co. Pty., [1967] 1 A.C. 617 25 (P.C.)
Owners, Strata Plan LMS 1328 v. City of Surrey, et al., 2001 BCCA 693 22
Sanofi-Aventis Canada Inc. v. Novopharm Ltd., 2010 FC 150 22
Sauer v. Canada (Attorney General), 2007 ONCA 454, leave to appeal refused, 72 & 74 [2007] S.C.C.A. No. 454 (QL)
Schreiber v. Canada (Attorney General) (2001), 52 O.R. (3d) 577 (C.A.), aff’d, 23 [2002] 3 S.C.R. 269, 2002 SCC 62
Swift Current (City) v. Saskatchewan Power Corp., 2007 SKCA 27 41
The Queen v. Côté et al., [1976] 1 S.C.R. 595 27 & 31
Ultramares Corp. v. Touche, 174 N.E. 441 (N.Y. 1973) 62
23 Consolidated Factum of Respondents on Appeal
Secondary sources
Lewis Klar, Q.C., “Evolving Landscape of Crown Liability in Tort”, in 6th Annual 45 Conference on Crown Liability (Toronto: Osgoode Hall Law School, 2009)
Lewis Klar, Q.C., “The Tort Liability of the Crown: Back to Canada v. 45 Saskatchewan Wheat Pool” (2007) 32 Advocates’ Quarterly 293
Paul Vickery and Travis Henderson, “Class Actions Against the Crown: What’s 44 New and What’s Important”, in 6th Annual Conference on Crown Liability (Toronto: Osgoode Hall Law School, 2009)
24 Consolidated Factum of Respondents on Appeal Canada Shipping Act, R.S.C. 1906, c. 113
PART VII – PROVISIONS DIRECTLY AT ISSUE
25 Consolidated Factum of Respondents on Appeal Canada Shipping Act, R.S.C. 1906, c. 113
26 Consolidated Factum of Respondents on Appeal Canada Shipping Act, R.S.C. 1906, c. 113
27 Consolidated Factum of Respondents on Appeal Canada Shipping Act, R.S.C. 1906, c. 113
28 Consolidated Factum of Respondents on Appeal Canada Shipping Act, R.S.C. 1985, c. S-9
29 Consolidated Factum of Respondents on Appeal Canada Shipping Act, R.S.C. 1985, c. S-9
30 Consolidated Factum of Respondents on Appeal Canada Shipping Act, R.S.C. 1985, c. S-9
31 Consolidated Factum of Respondents on Appeal Canada Shipping Act, R.S.C. 1985, c. S-9
32 Consolidated Factum of Respondents on Appeal Canada Shipping Act, R.S.C. 1985, c. S-9
33 Consolidated Factum of Respondents on Appeal Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30
34 Consolidated Factum of Respondents on Appeal Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30
35 Consolidated Factum of Respondents on Appeal Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30
36 Consolidated Factum of Respondents on Appeal Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30
37 Consolidated Factum of Respondents on Appeal Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30
38 Consolidated Factum of Respondents on Appeal Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30
39 Consolidated Factum of Respondents on Appeal Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30
40 Consolidated Factum of Respondents on Appeal Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30
41 Consolidated Factum of Appellants on Cross-Appeal
PART I – STATEMENT OF FACTS
A. Overview
1. These cross-appeals arise from the partial success of Canada’s motion to strike the third party notices filed against it by defendants in British Columbia’s action brought pursuant to the Costs Recovery Act.1
2. British Columbia’s theory is that the defendants breached duties owed to British Columbians (or, in the language of the Act, committed “tobacco related wrongs”), which caused British Columbians to smoke cigarettes and suffer from “tobacco related disease”. Relying on the Act, it seeks to recover the alleged costs of treating such disease. The defendants deny that their acts were wrongful, or that their acts caused any smoking or disease. However, they also allege that Canada committed the same acts, and guided the defendants’ conduct. If the defendants are held liable to British Columbia, they seek contribution, indemnity and damages from Canada.
3. The third party notices, which must be taken as true for purposes of Canada’s motion to strike, set out that Canada played a central role in the manufacture, marketing and promotion of cigarettes, and did so for decades. In particular, Canada (i) directed the defendants regarding how and when to warn – and not to warn – the public about the health risks of smoking; (ii) developed new varieties of tobacco that yielded a higher ratio of nicotine to “tar”; (iii) represented that this tobacco developed by Canada would lower “tar” deliveries to smokers; (iv) licensed this tobacco to growers; (v) urged defendants to use this tobacco to make low-“tar” cigarettes; (vi) prodded defendants to market those cigarettes in ways that would encourage smokers to switch from higher- “tar” cigarettes to these lower-“tar” cigarettes; and (vi) urged smokers to switch to these cigarettes as a safer alternative.
4. If the defendants are liable to British Columbia for marketing low-“tar” cigarettes, or for negligently designing them, or for the manner in which they warned smokers, the defendants say that Canada should be liable, too. This result is justified under a number of legal theories, including a
1 This factum uses terms, including “Canada” and “Costs Recovery Act”, as they are already defined in these defendants’ Consolidated Factum of Respondents on Appeal.
42 Consolidated Factum of Appellants on Cross-Appeal contribution claim under the Negligence Act2 or at common law, a claim for equitable indemnity and direct tort claims.
5. While the Court of Appeal accepted the potential success of the defendants’ direct tort claim in negligent misrepresentation (the claim now at issue in Canada’s appeal), it concluded that it was plain and obvious that none of the other claims against Canada could succeed. The Court of Appeal reached this conclusion in error.
6. In concluding that the defendants’ contribution claim was bound to fail, the Court of Appeal made two errors.
7. First, it misinterpreted the plain language of the Costs Recovery Act. The Act unambiguously brings within its scope all “manufacturers” of tobacco products, defined to include anyone who “directly or indirectly” has ever caused “the manufacture of a tobacco product” or engaged “in the promotion of a tobacco product”. On the defendants’ allegations, Canada unambiguously, not merely arguably, qualifies as a “manufacturer”.
8. Second, the Court of Appeal wrongly concluded that the defendants cannot claim contribution unless Canada can be directly liable to British Columbia under the Costs Recovery Act. The Negligence Act does not plainly and obviously impose any such requirement. Its right of contribution depends on “fault” causing loss to the plaintiff, which need not always be accompanied by liability. In any event, if Canada were not liable to British Columbia under the Costs Recovery Act, it would be liable under the generic Health Care Costs Recovery Act,3 by which British Columbia can recover health care costs from everyone but “manufacturers”. The defendants can also claim contribution from Canada at common law.
9. In combination, the Court of Appeal’s two errors work a serious hardship on the defendants. The Costs Recovery Act is already harsh: reaching back without limit in time, it revives stale claims, eliminates traditional defences and imposes startling evidentiary presumptions, all for the benefit of British Columbia. Now, according to the Court of Appeal, the Act also prevents the defendants from obtaining contribution from Canada, no matter how responsible Canada might be for the very health care costs for which British Columbia has sued the defendants. This is a remarkable conclusion, and
2 R.S.B.C. 1996, c. 333. 3 S.B.C. 2008, c. 27.
43 Consolidated Factum of Appellants on Cross-Appeal one this Court should be loath to adopt given the absence of clear (or, indeed, any) legislative intent: had British Columbia brought an action at common law to recover the same health care costs, from the same defendants, based on the same alleged misconduct, there could be no question but that the defendants, alleging the same involvement by Canada alleged here, could bring a third party claim against Canada for contribution.
10. Furthermore, the Court of Appeal was wrong to find that, on the facts pleaded, it is plain and obvious that the defendants have no claim for equitable indemnity from Canada. The principle of equitable indemnity applies where one party requests or directs another to do something that causes the other to incur liability. That is what Canada is alleged to have done here. The third party notices state that Canada issued directions and requests to the defendants respecting health warnings and marketing of low-“tar” cigarettes, on which British Columbia now bases its claim. The Court of Appeal’s reason for rejecting the equitable indemnity claim – the absence of any promise by Canada to indemnify the defendants – has repeatedly been rejected by other courts and would render the principle a redundancy.
11. Finally, the Court of Appeal was wrong to conclude that it is plain and obvious that the defendants have no claims against Canada for negligent design and failure to warn. The reason given by the Court of Appeal – the risk of Canada also being liable to other, hypothetical entities that may have incurred economic harm from smoking – is inapplicable because none of those entities have the relationship with Canada necessary to found a prima facie duty of care. The spectre of indeterminate liability to imaginary plaintiffs to whom Canada owes no duty in the first place provides no plain and obvious reason to negate the prima facie duty owed to the tiny class of defendants here, with whom Canada was uniquely intimate. Moreover, since British Columbia’s claim against the defendants is for economic harm, as measured by increased health care costs, it is not plain and obvious that Canada can escape liability to the defendants based on policy concerns about this very type of claim. The Court of Appeal was also wrong to find that the defendants’ claim for failure to warn was barred because Canada was acting in a policy-making rather than an operational capacity. There is nothing in the facts pleaded (and it defies common sense) to suggest that Canada made a policy decision, for example, to see that the public received inadequate warnings; if the warnings were inadequate, that was an operational flaw for which Canada may be held liable.
44 Consolidated Factum of Appellants on Cross-Appeal
B. Statement of facts
I. The Costs Recovery Act and British Columbia’s action against the defendants
12. The principal purpose and effect of the Costs Recovery Act is to facilitate an action by British Columbia, and by British Columbia alone, against “manufacturers” of tobacco and tobacco products for costs of treating British Columbians for tobacco related diseases, reaching back in time without limit.
13. The Costs Recovery Act alters traditional tort law to give British Columbia special procedural and evidentiary advantages. The Act creates sweeping evidentiary presumptions in favour of British Columbia, eliminates limitation defences, shields from defendants the identities of the persons whom they are alleged to have harmed and sharply restricts defendants’ ability even to get medical records respecting the treatments for which British Columbia seeks reimbursement.4
14. The Act’s definition of “manufacturer” establishes the scope of persons and entities potentially liable under the Act. The definition is expansive. Subject to some limited and precise exceptions,5 a person or entity meeting any one of the four prongs of the definition can be liable to British Columbia:
“manufacturer” means a person who manufactures or has manufactured a tobacco product and includes a person who currently or in the past
(a) causes, directly or indirectly, through arrangements with contractors, subcontractors, licensees, franchisees or others, the manufacture of a tobacco product,
(b) for any fiscal year of the person, derives at least 10% of revenues, determined on a consolidated basis in accordance with generally accepted accounting principles in Canada, from the manufacture or promotion of tobacco products by that person or by other persons,
(c) engages in, or causes, directly or indirectly, other persons to engage in the promotion of a tobacco product, or
(d) is a trade association primarily engaged in
4 As explained below, British Columbia has passed a similar but generic statute, the Health Care Costs Recovery Act, which permits it to recover health care costs from everyone except those who are “manufacturers” under the tobacco statute. Remarkably, the generic statute lacks every one of these extraordinary and harsh features. 5 See Costs Recovery Act, s. 1(2).
45 Consolidated Factum of Appellants on Cross-Appeal
(i) the advancement of the interests of manufacturers,
(ii) the promotion of a tobacco product, or
(iii) causing, directly or indirectly, other persons to engage in the promotion of a tobacco product … .6
15. Despite this expansive definition, British Columbia chose to sue only 14 alleged “manufacturers”: a handful of cigarette makers in Canada and abroad, plus the Canadian Tobacco Manufacturers’ Council. British Columbia did not sue any of the many tobacco companies situated on Indian reserves that have made cigarettes for British Columbians. It did not sue any wholesalers or retailers that promoted cigarettes, any trade associations representing such wholesalers or retailers or any marketing companies that engaged in the promotion of cigarettes. And it did not sue Canada.
16. The gist of British Columbia’s claim is that the defendants committed “tobacco related wrongs” that caused persons in British Columbia to smoke cigarettes, and that smoking cigarettes caused or contributed to disease in a number of these persons.
17. The first “tobacco related wrong” alleged by British Columbia is “defective product” or “negligent design”. British Columbia’s Amended Claim states as follows:
50. These Defendants breached their duty to consumers to design a reasonably safe product by failing to eliminate or reduce to a safe level, substances in cigarettes and by-products of combustion, including nicotine and tar, which are addictive and which can cause or contribute to disease.
51. These Defendants, in further breach of their duty, increased the risks of smoking by manipulating the level and bio-availability of nicotine in their cigarettes, particulars of which include the following:
(a) these Defendants sponsored or engaged in selective breeding or genetic engineering of tobacco plants to produce a tobacco plant containing increased levels of nicotine;
…
53. These Defendants, in further breach of their duty, increased the risk to consumers by designing and manufacturing “mild,” “low tar” and “light” cigarettes, which they promoted in a manner which led reasonable consumers to believe that the product was safer to use than it was in fact.
6 Costs Recovery Act, s. 1(1).
46 Consolidated Factum of Appellants on Cross-Appeal
18. The second alleged “tobacco related wrong” is “failure to warn”:
56. These Defendants breached their duty to warn, including, in particular, by failing to provide any warning prior to 1972, or any adequate warning thereafter:
(a) of the risk of tobacco related disease; and
(b) of the risk of addiction to the nicotine contained in their cigarettes.
57. To the extent that these Defendants have purported to provide warnings, these warnings:
(a) were designed to be as innocuous and ineffective as possible;
(b) were insufficient to give consumers an adequate indication of each of the specific risks of smoking their cigarettes;
(c) were introduced only to forestall more government mandated warnings; and
(d) failed to make clear, credible, complete and current disclosure to consumers of the risks inherent in the ordinary use of their cigarettes in such a way as to allow consumers to make free and informed decisions concerning smoking.
58. Without restricting the generality of the foregoing, although these Defendants knew or ought to have known that children and adolescents in British Columbia were smoking or might smoke their cigarettes, they failed to provide warnings sufficient to convey to such persons the risks of smoking.
19. In addition, the Amended Claim alleges other “tobacco related wrongs” by the defendants, involving, for example, breaches of consumer protection statutes. As in the case of the “defective product” and “failure to warn” allegations described above, the Amended Claim describes these “tobacco related wrongs” by way of extensive allegations concerning the supposed properties of tobacco used in cigarettes, the purported inadequacy of health warnings offered by the defendants and the supposed assertion by the defendants that low-“tar” (or “light” and “mild”) cigarettes are safer than other cigarettes.7
7 See, e.g., Amended Claim, at paras. 39-46, 51, 53, 57-58 and 77.
47 Consolidated Factum of Appellants on Cross-Appeal
II. The defendants’ third party notices against Canada
20. In 2007, most of the defendants filed third party notices against Canada, seeking contribution, indemnity, damages and declaratory relief. These third party notices contain detailed allegations concerning the active, central and guiding role that Canada has played in the tobacco industry for many decades.
21. The RBH/RI TPN is generally representative of the third party notices. It alleges that Canada not only guided but also itself engaged in many of the activities that British Columbia now alleges constitute “tobacco related wrongs”. Some of the key allegations are as follows:
(a) Canada reviewed and conducted research (both independently and jointly with the defendants) concerning the health risks of smoking cigarettes and the behaviour of smokers. Canada initially advised the public that smoking was not addictive and had not been established as a cause of lung cancer. Later, having recognized the health risks of smoking, Canada implemented a National Smoking and Health Programme intended to advise and educate smokers about those risks and about the properties of cigarettes.8
(b) In the implementation of its National Smoking and Health Programme, Canada considered the utility of health warnings on cigarette packages, and told the defendants that such warnings were unnecessary, unrealistic and “silly”. Once it determined that warnings would be beneficial, Canada gave advice and recommendations to the defendants about the warnings that should be used – the very warnings now alleged by British Columbia to be inadequate.9
(c) Later, Canada sought to induce smokers to select cigarettes with relatively low levels of “tar” and nicotine and represented that such low-“tar” cigarettes posed a lesser risk to their health. To further its efforts, Canada published “league tables” showing the “tar” and nicotine yields of various cigarette brands and eventually requested or directed that the defendants publish those yields on cigarette packages and in cigarette advertising. Canada
8 RBH/RI TPN, at paras. 13-52. 9 RBH/RI TPN, at paras. 53-62. See para. 18, above.
48 Consolidated Factum of Appellants on Cross-Appeal
also advised, requested or directed that the defendants produce and promote low-“tar” cigarettes, and advised smokers to avoid “compensation” when smoking them.10
22. The third party notices go on to allege in detail that officials of Agriculture Canada and Health Canada ultimately came to participate directly in the commercial aspects of the Canadian tobacco industry in a way that is most atypical for government. As part of a programme to develop a less hazardous cigarette, Canada developed, licensed and promoted its own strains of tobacco with a lower “tar”-to-nicotine ratio, for the purpose of facilitating the manufacture of marketable low-“tar” cigarettes. Canada encouraged the defendants to produce these cigarettes and to move smokers towards them. Eventually, Canada’s tobacco came to dominate the Canadian marketplace, and Canada collected royalties for it. Canada congratulated itself when the defendants succeeded in converting the great bulk of smokers to low-“tar” cigarettes. For example, the RBH/RI TPN states as follows:
127. … [A]griculture Canada Officials at the Delhi Research Station had, between about 1979 and 1983, created varieties of tobacco leaf, including Nordel, Delgold, Newdel and Candel, which contained significantly higher levels of nicotine than previously available varieties which when smoked produced a lower “tar” to nicotine ratio and were therefore believed to produce a safer cigarette. These varieties were tested at the Delhi Research Station for their relative safety and to determine whether they were consistent with levels of biological activity or mutagenicity acceptable to Officials, and whether they were acceptable to consumers when manufactured into cigarettes. Officials licensed those varieties and promoted them for use by all growers of tobacco in Canada, and for use by the cigarette manufacturers in their products for sale in British Columbia.
128. By the summer of 1980, Officials at Agriculture Canada were advising the public and the cigarette manufacturers that the new varieties of tobacco “that Agriculture Canada had developed, could be tailor-made for today’s light cigarette brands, combining low-tar and high nicotine.” By the spring of 1981, Officials at Health Canada advised and represented to consumers and cigarette manufacturers in published material that, “The relatively low-tar/nicotine ratio of Canadian tobacco offers manufacturers greater flexibility in producing lighter cigarettes and still maintains sufficient nicotine and flavour to satisfy consumer demands.” Similar statements were published on multiple occasions including those in Volumes 53, 54, and 55 of “The Lighter,” a publication of Agriculture Canada.
129. By 1983 the tobacco varieties developed by Agriculture Canada Officials, in
10 RBH/RI TPN, at paras. 68-109.
49 Consolidated Factum of Appellants on Cross-Appeal
response to grower requirements and the international market for tobacco leaf, and in order to satisfy consumer demand for “light” cigarettes, comprised about 95% of the tobacco available to the cigarette manufacturers. By 1983 nearly all tobacco products consumed in B.C. were manufactured from these varieties.
130. Licensing fees and royalties earned on those tobacco strains have been paid to the Federal Government.
23. All of these allegations correspond precisely to “tobacco related wrongs” that British Columbia contends were committed by the defendants.
24. Based on the allegations in the third party notices, the defendants asserted that if they were liable to British Columbia, then Canada was liable to them, under at least three separate legal theories. First, Canada was liable to make contribution to the defendants, on the premise that British Columbia’s health care costs were caused by Canada’s wrongful conduct. Second, Canada was liable under the principle of equitable indemnity because it requested or directed the defendants’ impugned conduct. Third, Canada breached duties of care it owed directly to the defendants, with the damages for such breaches to be measured by reference to the defendants’ liability to British Columbia.
25. With respect to the theory that Canada breached duties owed directly to the defendants, the defendants’ allegations were grouped by the Court of Appeal into three separate claims: (i) Canada made negligent misrepresentations to the defendants about the relative safety of the tobacco strains created, promoted and licensed by Canada for low-“tar” cigarettes and about other matters affecting the public health; (ii) Canada negligently designed those tobacco strains; and (iii) Canada engaged in a failure to warn respecting the necessity and content of printed health warnings.
III. Canada’s motion to strike and the decisions below
26. Canada did not file any defence to the third party notices. Instead, it moved under Rule 19(24)(a) of British Columbia’s Supreme Court Rules11 to strike them in their entirety, on the ground that they disclosed no reasonable cause of action. In accordance with Hunt, for the purposes of the motion, the allegations in the third party notices were required to be taken as true.
27. At first instance, Canada’s motion was successful. On April 10, 2008, Wedge J. struck the third party notices on the view that Canada enjoys a constitutional immunity from the Costs Recovery
11 B.C. Reg. 221/90.
50 Consolidated Factum of Appellants on Cross-Appeal
Act that defeats all of the defendants’ claims (including, without any explanation, claims not based on the Act).12
28. The appeal from Wedge J.’s order was heard over several days in June 2009, together with the appeal in Knight. On December 8, 2009, the Court of Appeal allowed the defendants’ appeal in part. The Court of Appeal held that the defendants’ negligent misrepresentation claim against Canada should be permitted to proceed, but that all the other claims should be struck.
29. With respect to the claim for contribution, the Court of Appeal, writing through Hall J.A., reasoned that the defendants may make this claim only under the Negligence Act, and only where the third party from whom contribution is claimed is directly liable to the plaintiff (here, British Columbia). For this proposition, the Court of Appeal cited Laskin C.J.’s decision in Giffels v. Eastern Construction.13 The court concluded that Canada could not be liable to British Columbia because Canada is not a “manufacturer” within the meaning of the Costs Recovery Act. Having concluded that the Costs Recovery Act did not capture Canada, the Court of Appeal did not consider the constitutional immunity point on which Wedge J. originally decided the motion.
30. The Court of Appeal provided three justifications for its view that Canada is plainly and obviously not a “manufacturer”. First, it looked at the Act’s definition of “manufacturer”, and assumed, without supporting evidence, that Canada did not fit within the definition because it does not derive 10% of its revenue from tobacco and lacks a market share in tobacco products:
[W]hen one goes on to consider other provisions of the statute, it seems less likely that Canada was intended by the legislature to be within the parameters of the Costs Recovery Act. For instance, subsection (b) of the definition of “manufacturer” adverts to the derivation of at least 10% of revenues for a fiscal year from the manufacture or promotion of tobacco products. I note also that potential liability of defendants is stipulated to be based on market share. … Manifestly, Canada has not been engaged in the business of selling tobacco products in British Columbia, nor does it derive at least 10% of annual revenues from the manufacture or promotion of tobacco products.14
12 BCSC Decision. 13 [1978] 2 S.C.R. 1346 (“Giffels”). 14 BCCA Decision, at para. 30.
51 Consolidated Factum of Appellants on Cross-Appeal
31. Second, the Court of Appeal looked beyond the Act to isolated statements in Hansard that it said did not evince a legislative intent to impose liability on Canada (even though, at first instance, British Columbia had argued that Canada fits within the “manufacturer” definition):
At the time this legislation was introduced by the British Columbia government of the day, the minister responsible indicated that the government believed that “the industry” manufactured a product that killed people, and that the government believed that “the industry” should be held accountable for the costs of treating tobacco related illnesses. The minister made reference to “tobacco companies”. The terms used by the minister are not at all apt to include Canada as a target of the legislation.15
32. Third, the Court of Appeal speculated that the Legislature would have seen policy reasons not to create a claim under the Costs Recovery Act against Canada:
It is also to be noted that there have been in existence for many years fiscal arrangements between Canada and British Columbia providing for health care cost transfers from the federal government to the provincial government based on formulas incorporating tax revenues and cost sharing. If the Costs Recovery Act were to be construed to permit the inclusion of Canada as a manufacturer targeted for the recovery of provincial health costs, this would permit a direct economic claim to be advanced against Canada by British Columbia to obtain further funding for health care costs. In light of these longstanding fiscal arrangements between governments, I cannot conceive that the legislature of British Columbia could ever have envisaged that Canada might be a target under the Costs Recovery Act. At the very least, having regard to the definition of government contained in the current Interpretation Act, it seems to me that if Canada was intended to be a target, it would have been specifically named in the legislation. For one level of government to directly target another level of government seeking to exact financial compensation from that level of government seems to me a matter sufficiently fraught with constitutional considerations to require a clear indication that this was intended and there is no such indication in this legislation.16
33. Turning to the defendants’ equitable indemnity claim, the Court of Appeal found that the principle of equitable indemnity could not apply given the absence of any implied promise by Canada to indemnify the defendants. Hall J.A. stated:
I am of the opinion that if the notional reasonable observer were asked whether or not Canada, in the interaction it had over many decades with the appellants, was
15 BCCA Decision, at para. 31. 16 BCCA Decision, at para. 33.
52 Consolidated Factum of Appellants on Cross-Appeal
undertaking to indemnify them from some future liability that might be incurred relating to their business, the observer would reply that this could not be a rational expectation, having regard to the relationship between the parties. Likewise, if Canada through its agents had been specifically asked or a suggestion had been made to its agents by representatives of the appellants that Canada might in future be liable for any such responsibility or incur such a liability, the answer would have been firmly in the negative.17
34. With respect to the defendants’ claims for negligent misrepresentation, negligent design and failure to warn, a majority of the Court of Appeal, writing through Tysoe J.A., adopted the majority’s analysis in Knight on the question of proximity at the first stage of the Anns/Cooper test. It held that proximity arguably existed between Canada and the defendants with respect to all of those claims. The relevant portion of Knight states as follows:
ITCAN asserts that Canada represented to it that the tobacco strains developed and licensed by Canada for use in light and mild cigarettes were less hazardous to the health of smokers than regular cigarettes. The class members [like British Columbia in this case] are alleging that the same representation made to them by ITCAN was deceptive and misleading, thereby contravening the Trade Practice Act. ITCAN’s position is that if class members are correct, Canada should be liable to ITCAN because ITCAN’s contravention of the Trade Practice Act was a consequence of its reasonable reliance on the representation made by Canada. …
[ITCAN’s] complaint is that Canada made misrepresentations to it about the tobacco strains developed and licensed by Canada for use in light and mild cigarettes, including the accuracy of information provided by standard measuring methods, the deliveries of tar and nicotine, and the extent of compensation made by smokers of light and mild cigarettes.
In my opinion, it is not plain and obvious that Canada did not owe a prima facie duty of care to ITCAN with respect to representations made by it to ITCAN in connection with tobacco strains developed for use in light and mild cigarettes. …
In my view, it also is not plain and obvious that Canada did not owe a prima facie duty of care to ITCAN with respect to the design of the tobacco strains developed for use in light and mild cigarettes. If sufficient proximity exists in the relationship between the designer of a product and a purchaser of the product, it would seem to me to follow that there is sufficient proximity in the relationship between a designer of a product and a manufacturer who uses the product in goods sold to the public. Also, the designer of the product ought reasonably to
17 BCCA Decision, at para. 57.
53 Consolidated Factum of Appellants on Cross-Appeal
have the manufacturer in contemplation as a person who would be affected by its design in the context of the present case.18
35. The Court of Appeal also found that the Anns/Cooper requirement of foreseeability was made out on the pleadings.
36. At the second stage of the Anns/Cooper test, the Court of Appeal rejected Canada’s contention that the defendants’ negligent misrepresentation and negligent design claims plainly and obviously concerned an unchallengeable policy decision by Canada. It again did this by reference to Knight:
However, on my reading of the facts alleged in ITCAN’s third party notice, which must be assumed to be true for the purposes of a Rule 19(24) application, the allegations against Canada go beyond its role as a regulator. It is alleged that Canada made the decision to develop strains of tobacco that were less harmful to smokers than the strains of tobacco then being utilized (which could fairly be characterized as a policy decision) but it developed strains of tobacco that were actually more hazardous to the health of smokers, and it made misrepresentations to smokers about the relative safety of cigarettes containing the strains of tobacco. It is also alleged that Canada was paid licensing fees and royalties in respect of the strains it developed.19
37. Referring to Knight, the Court of Appeal nonetheless concluded that, notwithstanding all this, policy reasons relating to indeterminate liability plainly and obviously weighed against a duty of care permitting the defendants to recover for their economic losses (i.e., their alleged liabilities to British Columbia):
[T]here may be innumerable other persons who suffer economic loss as a result of the injury to the third party in question (here, the class members) or damage to or loss of property of the third party. For example, employers of key employees who became incapacitated as a result of smoking light and mild cigarettes could claim for lost profits. Suppliers of the employer may suffer a financial loss. Persons having contracts with smokers of light and mild cigarettes could claim for economic loss occasioned by the incapacity of the smokers. Family members of a smoker of light and mild cigarettes could suffer financial loss.
In my view, therefore, the claim of ITCAN for recovery of pure economic loss from Canada gives rise to indeterminate liability, and this consideration is
18 Knight, at paras. 64-67. 19 Knight, at para. 54.
54 Consolidated Factum of Appellants on Cross-Appeal
sufficient to negate the prima facie duty of care found to be owed by Canada at the first stage of the Anns test.20
38. The Court of Appeal permitted only the defendants’ claim against Canada for negligent misrepresentation to proceed, because the law has long permitted misrepresentation claims for economic loss.21
39. In addition, the Court of Appeal found that the defendants’ claim for failure to warn (unlike the claims for negligent misrepresentation and negligent design) plainly and obviously attacked a policy decision by Canada, rather than its operational conduct, and failed for that reason:
As I read ITCAN’s third party notice, the allegation of a failure to warn does not relate specifically to the tobacco strains developed by Canada for use in light and mild cigarettes. Paragraphs 149 and 150 of its third party notice assert that if, as alleged by British Columbia, warnings of the health risks of smoking cigarettes generally should have been given prior to 1972 and inadequate warnings were given after 1972, this was known by Canada, and the failure of the appellants resulted from conduct of Canada.
The principal point of difference between Hall J.A. and myself in Knight is Hall J.A. believes that all of Canada’s actions fall within its purview as regulator and that policy considerations militate against the imposition of a duty of care on Canada. In contrast, it appears to me that the allegations against Canada with respect to its development of the tobacco strains used in light and mild cigarettes may go beyond Canada’s role as regulator, and it is not plain and obvious that policy considerations negate the prima facie duty of care. However, the difference between us does not apply to this claim of a failure to warn. This claim is against Canada in its role as regulator … .22
PART II – QUESTIONS IN ISSUE
40. The essential question on these cross-appeals is whether it is plain and obvious that the defendants have no possible claim against Canada apart from their claim in negligent misrepresentation, despite Canada’s involvement in and direction of the very conduct now alleged by British Columbia to constitute “tobacco related wrongs”, despite Canada’s central and participatory role in the tobacco industry over many decades and despite Canada’s development, licensing and
20 Knight, at paras. 82-83. 21 Knight, at para. 71. 22 BCCA Decision, at paras. 88-89.
55 Consolidated Factum of Appellants on Cross-Appeal promotion to the defendants of tobacco strains specifically intended, on health grounds, for the low- “tar” cigarettes that are now alleged to have in fact been more dangerous.
41. Given the allegations in the third party notices, it is arguable, at a minimum, that the defendants have the following claims:
(a) a claim for contribution and indemnity under s. 4 of the Negligence Act or at common law;
(b) a claim for equitable indemnity; and
(c) claims for negligent design and failure to warn.
PART III – STATEMENT OF ARGUMENT
A. As these cross-appeals arise from a motion to strike, the defendants’ claims cannot be struck unless they are radically defective, and particular caution is warranted.
42. Like the appeal, these cross-appeals arise from a motion to strike pleadings. Canada has filed no defence, been subjected to no discovery, led no evidence and taken part in no trial. Accordingly, the allegations in the third party notices must be taken as true, and each issue must be resolved in the defendants’ favour unless the answer plainly and obviously goes Canada’s way. None of the defendants’ claims can be struck unless it is, beyond any doubt, radically defective and certain to fail.23
43. Although the standard on a motion to strike is already stringent, particular caution is warranted here. The defendants raise many claims, the viability of which depends on a great number of legal issues. Many of the issues are difficult and several are overlapping. In the case of some issues, this Court does not have the benefit of analysis and adjudication by both of the lower courts or sometimes by even one of them. While the third party notices lay out extensive factual allegations, the defendants have had no discovery of Canada and Canada has not offered any response to those allegations.
23 See these defendants’ Consolidated Factum of Respondents on Appeal, at para. 22.
56 Consolidated Factum of Appellants on Cross-Appeal
44. As Doherty J.A. has observed, the “exact nature of a claim is often an amalgam of fact and law which is melded through the trial process and only properly tested at the end of the trial”.24 The intricate and contentious legal analysis required here is not well suited for a pleadings motion. In the circumstances, the prudent and proper course is to leave the defendants’ claims against Canada to proceed, with the issues they raise to be resolved only if the proven facts require it.
B. Canada is a “manufacturer” within the meaning of the Costs Recovery Act and potentially liable to British Columbia under it.
45. A significant, and erroneous, ground underlying much of the Court of Appeal’s analysis was its conclusion that Canada is not a “manufacturer” within the meaning of the Costs Recovery Act. The Court of Appeal reasoned that, unless the Act’s novel cause of action against “manufacturers” extends to Canada, Canada cannot be directly liable to British Columbia, and Canada can be liable to the defendants for contribution only if it can be directly liable to British Columbia.25
46. The meaning of “manufacturer” is a question of statutory interpretation. In interpreting a statute, “there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”.26
47. When the words in the Costs Recovery Act’s definition of “manufacturer” are “read in their entire context and in their grammatical and ordinary sense”, and in light of the facts alleged in the third party notices, Canada is plainly a “manufacturer”. Nothing in the scheme of the Act, the object of the Act or any plain and obvious intention of the Legislature undercuts that conclusion.
I. The plain language of the “manufacturer” definition captures Canada.
48. The Court of Appeal arrived at its interpretation of “manufacturer” not exclusively upon analysis of the Costs Recovery Act’s definition but also by way of a review of selected statements of a Minister found in Hansard and an appeal to policy. The Court of Appeal’s interpretation is irreconcilable with the Act’s unambiguous text.
24 Schreiber, at para. 15. 25 BCCA Decision, at paras. 27 and 33. 26 Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 (“Rizzo”), at para. 21, per Iacobucci J., quoting with approval Elmer Driedger, Construction of Statutes, 2d ed. (Toronto: Buttersworth, 1983), at p. 87.
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49. The definition of “manufacturer” found in the Costs Recovery Act is clear and precise. In an effort to cast the net as broadly as possible, the British Columbia Legislature utilized a disjunctive definition, under which an entity will be a “manufacturer” if it undertakes any one of a number of activities.27
50. At first instance, Wedge J. correctly recognized that Canada arguably meets the definition of “manufacturer”:
On the facts as pleaded in the Third Party Notices, the employees of Agriculture Canada were involved in the production, assembly or packaging of a tobacco product and are therefore, at least arguably, “manufacturers” under the Act.28
51. For example, paragraph (a) of the definition captures anyone who “causes, directly or indirectly, through arrangements with contractors, subcontractors, licensees, franchisees or others, the manufacture of a tobacco product”. Canada directly or indirectly caused the manufacture of certain tobacco strains, and caused the use of those strains in the manufacture of cigarettes, and did so through arrangements with, among others, licensees. Paragraph (c) captures anyone who “engages in, or causes, directly or indirectly, other persons to engage in the promotion of a tobacco product”. Canada promoted its tobacco strains, and directly or indirectly caused the defendants to promote low- “tar” cigarettes made with Canada’s tobacco strains.
52. The Court of Appeal, however, mistakenly read the definition of “manufacturer” to be conjunctive, so that Canada’s failure to satisfy any one paragraph of the definition – for example, the paragraph referring to “10% of revenues” on a consolidated basis – would erroneously take it outside the scope of that definition.
53. Unsurprisingly, the Court of Appeal’s conjunctive reading of the “manufacturer” definition is inconsistent with that of British Columbia. Its pleadings properly treat the definition as disjunctive:
Each of the Defendants described above is a manufacturer pursuant to the Act by reason of one or more of the following:
(a) it manufactures, or has manufactured, tobacco products, including cigarettes;
27 See para. 14, above. 28 BCSC Decision, at para. 70.
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(b) it causes, or has caused, directly or indirectly, through arrangements with contractors, subcontractors, licensees, franchisees or others, the manufacture of tobacco products, including cigarettes;
(c) it engages in, or has engaged in or causes or has caused, directly or indirectly, other persons to engage in, the promotion of tobacco products, including cigarettes; and
(d) for one or more of the material fiscal years, it has derived at least 10% of its revenues, determined on a consolidated basis in accordance with generally accepted accounting principles in Canada, from the manufacture or promotion of tobacco products, including cigarettes, by itself or by other persons.29
54. The Court of Appeal also erred in giving significance to the fact that the Act initially allocates liability on a market-share basis.30 Market share is not necessary to establish an entity’s status as a “manufacturer” under the Act; indeed, it is irrelevant to the definition. This is clear from the fact that the definition includes “trade associations” that do not themselves sell or promote tobacco products, and others who “indirectly” cause the promotion of tobacco products. Indeed, British Columbia alleges that the Canadian Tobacco Manufacturers’ Council qualifies as a “manufacturer”:
The Defendant CTMC is the trade association of the Canadian tobacco industry. …
The Defendant CTMC is a manufacturer pursuant to the Act in that it has been primarily engaged in one or more of the following activities:
(a) the advancement of the interests of manufacturers,
(b) the promotion of cigarettes, and
(c) causing, directly or indirectly, other persons to engage in the promotion of cigarettes.31
55. Furthermore, a “manufacturer” with no market share can have significant liability to British Columbia. Under s. 3(4) and 4 of the Act, liability among “manufacturers” can be readjusted based on considerations other than market share and the liability of multiple “manufacturers” who conspire is joint and several.
29 Amended Claim, at para. 18 (emphasis added). 30 BCCA Decision, at paras. 30-31. 31 Amended Claim, at paras. 20-21.
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56. In any event, even if market share were needed to be a “manufacturer”, the defendants could lead evidence (or, at this stage, simply amend the third party notices to allege) that Canada does possess a market share based on the tobacco strains that it developed, licensed and promoted, and for which it is already alleged to have obtained licensing fees and royalties, which strains found their way into virtually all cigarettes sold legally in British Columbia.
II. The Court of Appeal erroneously departed from the Act’s plain language based on Hansard.
57. In support of its contra-textual reading of the Costs Recovery Act’s definition of “manufacturer”, the Court of Appeal relied upon statements by a Minister quoted in Hansard. On their face, none of these statements contradicts Canada being a “manufacturer” within the meaning of the Act. Certainly the Minister never stated that Canada was not a “manufacturer”.
58. While this Court has on occasion permitted recourse to Hansard, it has also consistently expressed reservations about the use of isolated statements of individual legislators as a guide to statutory interpretation.32 This Court’s decisions also confirm that caution is particularly appropriate where, as here, the statements in question do not directly address the question at hand.
59. For instance, in A.Y.S.A. Amateur Youth Soccer Assn. v. Canada (Revenue Agency),33 this Court rejected an argument based on Hansard that was very similar in form to the reasoning of the Court of Appeal. Rothstein J. explained:
The government cites various passages from Hansard to argue that in 1971, when Parliament amended the ITA creating the RCAAA provisions, in intended to exclude sports associations other than RCAAAs from the tax benefits of charitable status. … When faced with the issue of whether to provide tax relief for sport under the ITA, according to the government, Parliament chose to extend charity-like benefits to only a small number of sports associations and did so, not by expanding the definition of charity, but through the alternative mechanism of the RCAAA. …
32 See, e.g., Rizzo, at para. 35 (“the frailties of Hansard evidence are many”), per Iacobucci J. and Dagg v. Canada (Minister of Finance), [1997] 2 S.C.R. 403, at para. 49 (Hansard evidence has “limited reliability and weight”), per Cory J. See also, e.g., R. v. Morgentaler, [1993] 3 S.C.R. 463, at p. 485, where Sopinka J., quoting Professor Peter Hogg, suggests that while Hansard may be consulted for “the characterization of the entire statute for purposes of judicial review” under the pith and substance test, the use of Hansard is far less appropriate when it comes to “the interpretation of a particular provision of a statute”. 33 [2007] 3 S.C.R. 217, 2007 SCC 42 (“A.Y.S.A.”).
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It is clear from the wording of the definition of RCAAA in s. 248(1) that Parliament intended the benefit of RCAAA status to be available only to nationwide associations. However, I have difficulty accepting the government’s “occupied field” argument based on excerpts from Hansard. While Hansard may offer relevant evidence in some cases, comments of MPs or even Ministers may or may not reflect the parliamentary intention to be deducted from the words used in the legislation. “It is clear that no single participant in the legislative process can purport to speak for the legislature as a whole.” (R. Sullivan, Sullivan and Driedger on the Construction of Statutes (4th ed. 2002), at 489).
In any event, there is nothing in the passages cited by the government to indicate that the creation of the RCAAA regime precluded the registration of other sports associations as charities. Parliament can be taken to have put its mind to the question of which athletic associations would qualify as RCAAAs and to have chosen nationwide organizations only. It may also be that Parliament was operating under the assumption that athletic associations were not considered charitable at common law, which explains the special provisions ensuring charity- like status for RCAAAs … . However, neither of these propositions evince a parliamentary intent to freeze the development of the common law on charitable status or to occupy the field for all amateur sports.34
60. As in A.Y.S.A., so too here, “there is nothing in the passages” cited by the Court of Appeal to indicate that British Columbia’s intent to target the defendants was to the exclusion of other “manufacturers” such as Canada. The issue of Canada’s potential liability simply was not discussed. Perhaps the Minister “was operating under the assumption” that Canada did not meet the definition of “manufacturer” in the Costs Recovery Act. Perhaps he was aware that Canada would be included but chose not to highlight it in his remarks. Neither of these entirely plausible explanations can evince legislative intent to exclude Canada from the definition of “manufacturer”. That is, the negative inference Canada wishes to draw from the Minister’s comments “may not reflect the … intention to be deducted from the words used in the legislation” at all.
61. At most, the Hansard passages cited by Court of Appeal are ambiguous. As such, they are insufficient to overcome the plain language of the Costs Recovery Act.35 Indeed, on the basis of the Act’s plain language, British Columbia itself argued at first instance that Canada indeed qualified as a
34 A.Y.S.A., at paras. 11-13. 35 See, e.g., Placer Dome Canada Ltd. v. Ontario (Minister of Finance), [2006] 1 S.C.R. 715, 2006 SCC 20, at para. 39 (“Although both parties rely on Hansard evidence related to the movement of the hedging provision from the Regulation to the Act, I find that evidence to be ambiguous and of little assistance in this case. Accordingly, any analysis of the 1987 amendments must be grounded in an examination of the scheme and context of the revised Act”), per LeBel J.
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“manufacturer”. It can hardly be plain and obvious now that British Columbia – the author of the statute – was wrong.
III. The Court of Appeal erred by relying on its own policy concerns about Canada being a “manufacturer”.
62. The Court of Appeal’s speculation as to what the Legislature “could ever have envisaged” with respect to an action against Canada is not a proper basis for determining legislative intent, especially on a motion to strike.36 If reliance on statements of legislators and ministers found in Hansard is rarely appropriate, speculation about what those individuals might have been thinking never should be. Perhaps discovery and trial will show that the Legislature did consider that Canada would fit within the definition of “manufacturer”, and adopted that definition regardless.37
63. This Court has already observed that it is inappropriate to rely on a mere inference of legislative intent:
In matters of statutory interpretation the courts cannot usurp the function of the legislature in the absence of clear language and legislative guidelines leading inevitably to a given conclusion. As Professor Côté points out, supra, at p. 248:
It would be unfair for the courts to impose a legislative intent, however true it might be, that the citizen could not infer from the text considered in its context. The interpretative role of the courts does not allow them to add terms to a statute that are not already implicit therein. Even in the name of true intention, they may not override the public’s reasonable expectation of the statute’s meaning, as revealed by the words read in context. This is true even if the results of interpretation obtained by reading the text in its context are less satisfactory than those resulting from inferred intention: “... it is better the law should be certain, than that every judge should speculate upon improvements in it”. [Emphasis added].
…
36 BCCA Decision, at para. 33. 37 Indeed, though one judge might consider it difficult to envisage that British Columbia would seek to recover from Canada notwithstanding the monies already paid by Canada to British Columbia with respect to health care, another might think it proper that a province seeking recovery should recover from wherever it can. In any event, getting more money from Canada is no different from British Columbia’s efforts to recover from the defendants. Cigarette-specific excise taxes and duties, explicitly justified by the Legislature with reference to health care costs attributed to smoking, have already netted British Columbia many billions of dollars. British Columbia is already seeking to recover amounts far in excess of its true cost of smoking; seeking additional amounts from Canada would be no different.
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However much sympathy one may feel for the appellants, who have here been deprived of certain benefits resulting from the contract of employment with their employer, that does not give a court of law the authority to confer on them rights which Parliament did not intend them to have.38
64. This case is no different. While the Court of Appeal was indisputably responsible for evaluating the intent of the Legislature, it could not “impose a legislative intent” where none is apparent to change the words of the Act.
65. The Act contains a precise and easily understood definition of “manufacturer”. The definition exhibits care in the choice of words, especially respecting what kinds of entities to exclude from the definition. As set out above, the facts pleaded in the third party notices establish that Canada meets the definition, and no one but the Legislature is now “at liberty to rewrite legislation simply because it does not manifest the policy [choice]” that could have been made, but was not.39 A would-be “manufacturer” cannot be excluded just because the prospect of its inclusion now troubles the court.
66. Even if this Court does not find the intent of the Legislature as to who constitutes a “manufacturer” transparent from the plain statutory language, this language at a minimum makes the question arguable. This is well demonstrated by the conflicting conclusions reached by the motions judge and the Court of Appeal on the question,40 and by British Columbia’s own position at first instance. It is not plain and obvious that the British Columbia Legislature did not intend all those that satisfy the “manufacturer” definition to be subjected to the Act.
67. Hall J.A. was also incorrect when he characterized the issue of Canada’s status as a “manufacturer” as “fraught with constitutional considerations”.41 The manufacture of tobacco, including the development, promotion and licensing of tobacco strains, is not an inherently public function. Government liability under what is essentially a tort-law theory on the same basis as private entities is nothing extraordinary.
38 Barrette v. Crabtree Estate, [1993] 1 S.C.R. 1027, at pp. 1050-51 (emphasis in original), per L’Heureux-Dubé J. 39 Western Surety Co. v. National Bank of Canada, 2001 NBCA 15, at para. 63, per Drapeau J.A., leave to appeal refused, [2001] S.C.C.A. No. 187 (QL). See also British Columbia v. Imperial Tobacco Canada Ltd., [2005] 2 S.C.R. 473, 2005 SCC 49, at para. 52. 40 See para. 50, above. 41 BCCA Decision, at para. 33.
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68. Where, because of constitutional considerations or otherwise, the Legislature has intended to exclude Canada from a particular British Columbia statute, it has not hesitated to say so expressly, and to specify the terms. For instance, s. 8 of the Boundary Act states as follows:42
Despite any other provision of this Part, or any agreement entered into under this Part, Canada is not bound or liable to pay any costs in respect of this Part or any agreement entered into under this Part, except costs that Canada may incur for boundary inspections and meetings of the boundary commissioners.
69. The Costs Recovery Act contains no similar provision. The Court of Appeal was wrong to invent an exclusion for Canada based on its own speculative concerns.
C. Even if Canada were not a “manufacturer” within the meaning of the Costs Recovery Act, it would be liable to British Columbia under the Health Care Costs Recovery Act.
70. Even if the Court of Appeal were correct that Canada is not a “manufacturer”, Canada would necessarily be liable to British Columbia for its breaches of duty under the Health Care Costs Recovery Act, which permits British Columbia to recover health care costs from everyone but “manufacturers”.
71. Section 8 of the Health Care Costs Recovery Act gives British Columbia a cause of action against “wrongdoers” responsible for health care costs. It states, in its relevant part:
(1) Despite section 2 [beneficiary’s right to recover] and independent of its subrogated right under section 7 [government has subrogated right], if, as a direct or indirect result of the negligence or wrongful act or omission of a wrongdoer, a beneficiary suffers a personal injury for which the beneficiary receives or could reasonably be expected to receive one or more health care services, the government may recover from the wrongdoer
(a) the past cost of health care services, and
(b) the future cost of health care services.
(2) The government may commence a legal proceeding in its own name for the recovery of the past and future costs of health care services referred to in subsection (1).
42 R.S.B.C. 1996, c. 32. See also, e.g., Occupiers Liability Act, R.S.B.C. 1996, c. 337, s. 8(2).
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72. Like the cause of action created by the Costs Recovery Act, British Columbia’s cause of action under the Health Care Costs Recovery Act is non-subrogated, and good for both past and future costs of care.
73. Section 1 of the Health Care Costs Recovery Act defines “wrongdoers” – those made liable by the statute – to include those who breach a duty and thereby cause personal injury:
“wrongdoer” means
(a) a person whose negligent or wrongful act or omission causes or contributes to a beneficiary's personal injury or death, and
(b) a person who is responsible at law for the acts or omissions of a person referred to in paragraph (a),
but does not include the beneficiary.
74. The reference in the Health Care Costs Recovery Act’s definition of “wrongdoer” to a “negligent or wrongful act or omission” is broad enough to include what the Costs Recovery Act calls a “tobacco related wrong”. The statute implicitly admits so. To avoid imposing liability under both statutes, the Health Care Costs Recovery Act specifically excludes recovery for “tobacco related wrongs”. Section 24(3)(b) states as follows:
This Act does not apply in relation to health care services that are provided or are to be provided to a beneficiary in relation to … personal injury or death arising out of a tobacco related wrong as defined in the Tobacco Damages and Health Care Costs Recovery Act … .
75. A “tobacco related wrong” can only be committed, however, by a “manufacturer” within the meaning of the Costs Recovery Act. Subsection 1(1) of the Costs Recovery Act defines “tobacco related wrong” as follows (emphasis added):
“tobacco related wrong” means,
(a) a tort committed in British Columbia by a manufacturer which causes or contributes to tobacco related disease, or
(b) in an action under section 2 (1), a breach of a common law, equitable or statutory duty or obligation owed by a manufacturer to persons in British Columbia who have been exposed or might become exposed to a tobacco product … .
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76. On the facts alleged in the third party notices, these provisions thus give rise to only two possible scenarios:
(a) Canada is a “manufacturer” within the meaning of the Costs Recovery Act that committed “tobacco related wrongs”, and is liable to British Columbia under s. 2(1) of this statute (and s. 24(3)(b) of the Health Care Costs Recovery Act excludes liability under that statute on account of these “tobacco related wrongs”); or
(b) Canada is not a “manufacturer” within the meaning of the Costs Recovery Act but is a “wrongdoer” within the meaning of the Health Care Costs Recovery Act and liable to British Columbia under s. 8 of this statute.
77. Under either scenario, Canada is liable to British Columbia for the cost of health care resulting from the breaches of duty alleged in the third party notices.43 To the extent that direct liability by Canada to British Columbia is a pre-requisite to the defendants’ claim for contribution, it is, at the very least arguably, made out.
D. The defendants have an arguable claim for contribution.
78. The defendants have an arguable claim against Canada for contribution based on s. 4 of the Negligence Act. Contrary to the Court of Appeal’s holding, that claim should not and does not depend on Canada being directly liable to British Columbia. In any event, Canada is directly liable to British Columbia under either the Costs Recovery Act as a “manufacturer” or the Health Care Costs Recovery Act as a “wrongdoer”. Even if Canada were not directly liable to British Columbia, however, the defendants would have an arguable contribution claim at common law.
43 In the absence of the Costs Recovery Act and the Health Care Costs Recovery Act, Canada might also be liable to British Columbia for its health care costs (i) by way of a subrogated claim, or (ii) on the theory, previously advanced by British Columbia in this litigation, that it “has, and has always had, a free standing right to recover pecuniary and consequential damages arising from the defendants’ wrongs” founded on the public-interest jurisdiction discussed in British Columbia v. Canadian Forest Products Ltd., [2004] 2 S.C.R. 74, 2004 SCC 38: see “Attorney General’s Supplemental Outline of Argument: Jurisdiction”, at paras. 99-102, as filed in the Supreme Court of British Columbia in 2005. Given, however, that the Costs Recovery Act and the Health Care Costs Recovery Act, taken in combination, make Canada’s liability plain, the point will not be pressed here.
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I. Canada can be directly liable to the plaintiff, British Columbia.
79. The Court of Appeal concluded that because Canada could not be directly liable to British Columbia for its health care costs, it was plain and obvious that the defendants could not maintain a claim for contribution against Canada.
80. For the reasons given above, it is arguable that Canada is either a “manufacturer” under the Costs Recovery Act or a “wrongdoer” under the Health Care Costs Recovery Act and, in either case, liable to British Columbia. To the extent that direct liability by Canada to British Columbia is a prerequisite to claim for contribution, it is arguably met.
II. In any event, direct liability to the plaintiff is not required for a contribution claim under the Negligence Act.
(a) Contribution under the Negligence Act turns on fault, not liability.
81. The Court of Appeal was wrong to treat a direct liability to British Columbia as a necessary condition for a contribution claim. To claim contribution under the Negligence Act, all that is required is that Canada’s “fault” caused or contributed to British Columbia’s loss. Here, that means a “tobacco related wrong” contributing to health care costs, just as the third party notices allege.
82. The relevant provision of the Negligence Act states as follows:
4 (1) If damage or loss has been caused by the fault of 2 or more persons, the court must determine the degree to which each person was at fault.
(2) Except as provided in section 5 if 2 or more persons are found at fault
(a) they are jointly and severally liable to the person suffering the damage or loss, and
(b) as between themselves, in the absence of a contract express or implied, they are liable to contribute to and indemnify each other in the degree to which they are respectively found to have been at fault.
83. Under this section, “as between themselves”, each party who is found to have caused a plaintiff’s damage or loss is “liable to contribute to or indemnify each other in the degree to which they are respectively found to have been at fault”. Nothing in the words of this provision requires that the plaintiff have a viable cause of action against each such party – all that is required is that
67 Consolidated Factum of Appellants on Cross-Appeal each party be at “fault”. In this context, “fault” simply means “blameworthiness”,44 a concept that the British Columbia courts have held is broad enough to capture a person’s breach of a duty of care or commission of an intentional tort.45
84. The distinction between “fault” and liability to the plaintiff is confirmed by s. 2(1) of the Negligence Act, which reads as follows:
If by the fault of 2 or more persons damage or loss is caused to one or more of them, the liability to make good the damage or loss is in proportion to the degree to which each person was at fault.
85. Subsection 2(1) reduces a defendant’s liability to the extent that a plaintiff is at “fault” for its own loss. “Fault” cannot mean liability since a plaintiff is never technically liable to itself.
86. The essence of British Columbia’s claim is that the defendants breached duties owed to persons in British Columbia (or, in the language of the Costs Recovery Act, committed “tobacco related wrongs”), which caused “tobacco related disease”, which led to British Columbia providing medical treatment and incurring health care costs. The facts alleged in the third party notices support a claim that, if the defendants breached any such duties and caused any such health care costs, then so did Canada through its breaches of duties or, in different words, its “fault”. The Negligence Act was intended to afford a right of contribution in precisely such circumstances, where “fault” causes loss. Whether Canada is directly liable to British Columbia is beside the point. The Court of Appeal was wrong in concluding otherwise.
87. With its focus on “fault”, s. 4 of the Negligence Act stands apart from other legislation creating rights of contribution between wrongdoers. For example, s. 2(1) of The Tortfeasors and Contributory Negligence Act46 of Manitoba makes an enforceable liability to the plaintiff, and not mere “fault”, the pre-requisite to contribution:
Where damage is suffered by any person as a result of a tort, whether a crime or not,
44 Cempel v. Harrison Hot Springs Hotel Ltd. (1997), 43 B.C.L.R. (3d) 219, at para. 19, per Lambert J.A. See also, in the context of the Negligence Act, R.S.O. 1990, c. N-1, Snushall v. Fulsang (2005), 78 O.R. (3d) 142 (C.A.), at para. 29, leave to appeal refused, [2005] S.C.C.A. No. 519 (QL). 45 Brown v. Cole (1995), 14 B.C.L.R. (3d) 53 (C.A.), at para. 20. 46 C.C.S.M. c. T90. Section 3 of the Tortfeasors Act, R.S.N.S. 1989, c. 471 is substantially identical.
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…
(c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so, however, that no person is entitled to recover contribution from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought. [Emphasis added.]
88. One of the oldest general contribution statutes in the Commonwealth, Ontario’s Negligence Act of 1930,47 referred to both “fault” and liability:
3. In any action founded upon the fault or negligence of two or more persons the court shall determine the degree in which each of such persons is at fault or negligent, and where two or more persons are found liable they shall be jointly and severally liable to the person suffering loss or damage for such fault or negligence, but as between themselves, in the absence of any contract express or implied, each shall be liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent. [Emphasis added.]
89. In making “fault” causing the plaintiff’s loss, rather than liability to the plaintiff, the sole trigger for rights of contribution under s. 4 of British Columbia’s Negligence Act, the Legislature must be taken to have appreciated the distinction.
90. Indeed, in establishing rights of contribution as between wrongdoers, there is no reason to take into consideration whether the plaintiff has a viable cause of action against each of them. The plaintiff’s interest is in either case secured, because liability to the plaintiff is joint and several. All that is at issue is an equitable distribution of responsibility “as between” those whose wrongs have caused the plaintiff’s loss or damage, an issue not implicating the plaintiff.
91. On the other hand, conditioning one wrongdoer’s ability to seek contribution and indemnity from the other on the existence of a direct cause of action by the plaintiff against both poses a risk of great iniquity: the entire burden of a plaintiff’s loss might be borne by a wrongdoer whose responsibility is minor compared to that of another.
47 The Negligence Act, 1930, Ont., 20 Geo. V, c. 27.
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92. Glanville Williams observed this potential for unfairness in commenting on the English contribution legislation of his day – the so-called Tortfeasors Act –48 which, like the Manitoba statute, made liability to the plaintiff the touchstone of contribution:
There are situations where injustice would be caused by a strict rule that contribution lies only between parties who can be sued by the plaintiff, and then one naturally struggles against it.49
93. Professor Williams noted a variety of situations in which a wrongdoer might escape liability to the plaintiff (including the lapse of limitation periods,50 the later acquisition of a release51 and the existence of a constitutional or statutory immunity),52 but suggested that there would be in none of them a fair or principled reason for restricting rights of contribution between wrongdoers inter se. The Court of Appeal’s erroneous interpretation of the Costs Recovery Act, addressed already,53 raises the spectre of another situation involving a wrong without liability to the plaintiff where fairness would demand that contribution nonetheless be made available: a statutory cause of action in favour of a plaintiff (here, British Columbia) grafted onto wrongs committed to others (British Columbians) that places the entire burden of liability on some parties (“manufacturers”) while excluding liability for other wrongdoers (supposedly, Canada). Happily, the British Columbia Legislature has avoided this prospect of unfairness in its Negligence Act, by making “fault”, not liability, the prerequisite to contribution. The Court of Appeal erred in concluding to the contrary and discarding the defendants’ contribution claims preliminarily.
(b) Giffels is distinguishable or should no longer be followed.
94. Despite the “fault”-focussed wording of s. 4 of the Negligence Act, the Court of Appeal wrongly relied on Giffels for the proposition that the defendants could not seek contribution from Canada unless it could be directly liable to British Columbia. Giffels, however, is distinguishable (and, indeed, distinguishes itself) from the present case. Alternatively, if Giffels makes direct
48 Law Reform (Married Women and Tortfeasors) Act, 1935 (UK), 25 & 26 Geo. 5, c. 30, s. 6. 49 Glanville Williams, Joint Torts and Contributory Negligence: A Study of Concurrent Faults (London: Steven & Sons, 1951) (“Williams”), at p. 96. 50 Williams, at p. 98. 51 Williams, at p. 98. 52 Williams, at p. 100. 53 See paras. 45-69, above.
70 Consolidated Factum of Appellants on Cross-Appeal liability to British Columbia a pre-requisite to contribution from Canada despite the words of s. 4, it should no longer be followed.
95. Giffels was decided under s. 2(1) of The Negligence Act54 of Ontario, which reads similarly, but not identically, to s. 4 of the Negligence Act here. In Giffels, Laskin C.J. held that an engineer could not seek contribution from a contractor respecting a defective roof installed for their shared client because the contractor had, through its contract with the plaintiff, negotiated to provide a limited guarantee within which the contractor’s defective work did not fall. Significantly, the contract in question, “the very instrument by which [the contractor’s] relationship with the plaintiff was established”,55 was prepared by the engineer, and the engineer had itself approved the contractor’s work and thereby limited the contractor’s liability to that provided under the guarantee. In other words, before the loss was occasioned, the engineer had arranged for the contractor to bear no responsibility for such a loss as arose. In all the circumstances, it is fair to say that the contractor committed no “fault” according to what the plaintiff, the contractor and the engineer had all agreed.
96. Importantly, Laskin C.J. distinguished the scenario before him from one in which “the immunity of [the contractor] from liability [arose] from some independent transaction or settlement made after an actionable breach of contract or duty”.56 This case thus falls squarely within the scenario that Laskin C.J. distinguished. Canada did not bargain with British Columbia to bear no liability for its breaches of duty alleged in the third party notices, and the defendants did not themselves arrange or bring about that result. If Canada is not liable to British Columbia, it is only because British Columbia decided decades after the alleged breaches to give itself a cause of action against the defendants but not Canada based on those breaches. It is not a function of some understanding to which the defendants were privy (let alone one which they themselves drafted) and in place from the start.
97. If, however, Giffels cannot be distinguished, it should no longer be followed. Nothing in s. 4 of the Negligence Act suggests that direct liability to the plaintiff should be required to make a contribution claim against someone else at “fault” for the plaintiff’s loss, and there is no policy reason for superimposing that requirement. Indeed, that requirement could result in significant
54 R.S.O. 1970, c. 296. 55 Giffels, at p. 1355. 56 Giffels, at p. 1355 (emphasis added).
71 Consolidated Factum of Appellants on Cross-Appeal unfairness where, as here, the plaintiff is a government suing on a statutory cause of action with retroactive application. A requirement of direct liability to the plaintiff would permit the government selectively to assign liability among all responsible parties, placing the entire burden of its loss on those it chooses to target. Furthermore, following Giffels here makes meaningless the differences in drafting of the provincial statutes mentioned above.
III. The defendants have an arguable contribution claim at common law.
98. Even if it were plain and obvious that both (i) Canada cannot be liable to British Columbia for health care costs and (ii) the Negligence Act requires liability to British Columbia for a contribution claim, the defendants would still have an arguable contribution claim at common law.
99. Historically, the common law prohibited contribution between wrongdoers,57 although the courts recognized soon enough that the prohibition did “not appear … to be founded on any principle of justice or equity, or even of public policy”.58 In Bow Valley, this Court called the prohibition “anachronistic and not in keeping with modern notions of fairness”,59 and accordingly made “an incremental change to the common law in compliance with the requirements of justice and fairness” to recognize a right of contribution in the context of maritime torts, where no statutory right had been afforded.60
100. Since Bow Valley, this Court has recognized that a common law right of contribution is available outside the maritime context, even where there is a statutory but more narrow contribution right. In Blackwater v. Plint,61 this Court held Canada and the United Church vicariously liable, on a joint and several basis, for sexual assaults at an Indian residential school. This raised the question of whether vicarious liability was “fault”, such that responsibility might be assigned between them unequally under the Negligence Act. McLachlin C.J. concluded that the issue did not need to be resolved, because “if vicarious liability is not ‘fault’ …, then the [Negligence Act] does not apply”, in which case liability could be unequally assigned “at common law, with the same result”.62
57 See, e.g., Merryweather v. Nixan (1799), 8 T.R. 186, 101 E.R. 1337. 58 Palmer v. Wick and Pulteneytown Steam Shipping Co. Ltd., [1894] A.C. 318 (H.L.), at p. 324, per Lord Herschel. 59 Bow Valley, at para. 101, per McLachlin J. (as she then was). 60 Bow Valley, at para. 102, per McLachlin J. 61 [2005] 3 S.C.R. 3, 2005 SCC 58 (“Blackwater”). 62 Blackwater, at para. 67.
72 Consolidated Factum of Appellants on Cross-Appeal
101. Based on Blackwater, it is at least arguable that, even if Negligence Act s. 4 does not apply, the defendants have a right of contribution against Canada at common law given the “tobacco related wrongs” by Canada alleged in the third party notices. This right should not be made dependent on Canada being directly liable to British Columbia, for all the reasons already given.
E. The defendants have an arguable claim for equitable indemnity.
102. The principle of equitable indemnity applies where one party requests or directs another to do something that causes the other to incur liability:63
If one person does an act at the request of or under the directions of another, which is neither manifestly tortious nor tortious to his knowledge, he will be entitled to be indemnified by that other against all liability which he may incur by reason of that act proving to be a tort, whether he be servant or agent of that other or not.64
103. The purpose of equitable indemnity is therefore to ensure that liability fairly rests with the party responsible for a plaintiff’s injury, even if that party’s act was not the proximate cause, unless the party whose conduct actually caused the injury was doing something obviously unlawful. For example, in Rawlins v. Monsour, a “bailiff acted throughout on the specific instructions of the landlord” in seizing property of a delinquent tenant.65 Although the Ontario Court of Appeal concluded that the bailiff should have known that the instructions called for an excessive and illegal seizure, still the court explained:
[W]here an act has been done by the Plaintiff under the express directions of the Defendant, which occasions an injury to the rights of third persons, yet if such an act is not apparently illegal in itself, but is done honestly and bona fide in compliance with the Defendant’s directions, he shall be bound to indemnify the Plaintiff against the consequences thereof.66
63 Parmley v. Parmley, [1945] S.C.R. 635 (“Parmley”), at pp. 647-49 and Birmingham and District Land Co. v. London and North Western Railway Company (1886), 34 Ch. D. 261, at p. 275. 64 Parmley, at p. 647, per Estey J., quoting Sir Arthur Underhill. 65 (1978), 88 D.L.R. (3d) 601 (Ont. C.A.) (“Rawlins”), at p. 603, per Lacourciere J.A. 66 Rawlins, at pp. 603-04, per Lacourciere J.A., quoting Toplis v. Grane (1839), 5 Bing. (N.C.) 636, 132 E.R. 1245 at p. 1250, per Tindal C.J.
73 Consolidated Factum of Appellants on Cross-Appeal
104. Relying upon the same principle, the Supreme Court of the Northwest Territories in Robertson v. Taylor67 concluded that indemnification was appropriate where a sheriff had seized property of a debtor at the direction of a creditor’s lawyer, and was thereafter sued by the debtor. Likewise, in Saskatchewan Co-operative Elevator Co. v. Grand Trunk Pacific Railway,68 the Saskatchewan Court of Appeal found a claim for equitable indemnity viable where one company requested that a railroad dispose of certain grain that in fact belonged to a different company.
105. The principle of equitable indemnity at least arguably gives the defendants a claim against Canada because, on the facts pleaded in the third party notices, some or all of the defendants’ liability to British Columbia is a function of Canada’s requests and directions, none of which called for conduct that was then manifestly tortious or illegal or even wrong. As set forth extensively in the third party notices and summarized above, Canada in large measure dictated the defendants’ response to health concerns about smoking over the decades.
106. For example, Canada’s officials initially rejected the notion of printed warnings as “silly” given the “ubiquitous” public knowledge of the health risks of smoking, then insisted on particular warnings that British Columbia now considers to have been a “tobacco related wrong”, but ascribes only to the obedient defendants.69 To give another example, Canada’s officials directed the defendants to participate in a campaign to encourage the public to smoke high-nicotine/low-“tar” cigarettes based on the belief that such cigarettes would be safer than higher-“tar” cigarettes, conduct that again British Columbia now deems a “tobacco related wrong” committed by the defendants.70 The third party notices are replete with similar instances of Canada directing and requesting the defendants to engage in conduct now alleged to constitute “tobacco related wrongs”.
107. Nothing in the requests made and directions given by Canada to the defendants was, in the words of Parmley, “manifestly tortious”, and it is not plain and obvious that it was “tortious to [the defendants’] knowledge”. In addressing smoking and health concerns, rather, it is more arguable that the defendants were entitled to rely in good faith on Canada’s determinations concerning what warnings to give and not give, what breeds of tobacco to use and what kinds of cigarettes to bring to market. Certainly the question of the defendants’ good faith cannot be decided on a motion to strike.
67 (1901), 4 Terr. L.R. 474 (“Robertson”), rev’d on other grounds, (1901), 31 S.C.R. 615. 68 [1923] 2 W.W.R. 8. 69 RBH/RI TPN, at para. 53. 70 RBH/RI TPN, at para. 72.
74 Consolidated Factum of Appellants on Cross-Appeal
108. While acknowledging the existence of the principle of equitable indemnity, the Court of Appeal held that it had no possible application here because there could not be any implied promise by Canada to indemnify any of the defendants:
I am of the opinion that if the notional reasonable observer were asked whether or not Canada, in the interaction it had over many decades with the appellants, was undertaking to indemnify them from some future liability that might be incurred relating to their business, the observer would reply that this could not be a rational expectation, having regard to the relationship between the parties. Likewise, if Canada through its agents had been specifically asked or a suggestion had been made to its agents by representatives of the appellants that Canada might in future be liable for any such responsibility or incur such a liability, the answer would have been firmly in the negative.71
109. The law, however, is that no agreement by the would-be indemnitor that it “might in future be liable for any such responsibility” is necessary to support a claim for equitable indemnity.72 This makes sense: were there the requirement of an agreement, express or implied, the principle of equitable indemnity would be redundant.
110. Moreover, the Court of Appeal’s analysis is irreconcilable with its conclusion, in discussing the defendants’ misrepresentation claim against Canada, that Canada could reasonably have foreseen that the tobacco strains it developed for low-“tar” cigarettes might actually produce more danger rather than less, in which case injury to the defendants could result:
It also seems to me that Canada could reasonably have foreseen that, if additional harm were caused to smokers of light and mild cigarettes, the appellants, as the manufacturers of the cigarettes, had potential liability for the damages flowing from the additional harm. The potential increased liability is the harm or injury to the appellants that was reasonably foreseeable by Canada. The potential increased liability is the general way in which the harm or injury occurred, and it was reasonably foreseeable by Canada.73
71 BCCA Decision, at para. 57. 72 See, e.g., Robertson, at para. 24 (“Having come to this conclusion [that equitable indemnity applies] it is unnecessary to enquire whether there was in fact any express promise to indemnify”), per McGuire J.; Secretary of State for India v. Bank of India Ltd., [1938] 2 All E.R. 797 (P.C.), at p. 800 (“[Equitable indemnity] is often … said to be based on a contract implied by law, the request importing a promise to indemnify the other party against the consequences to him of acting on the request” but “[t]he fiction of a contract implied by law adds nothing”), per Lord Wright and Reference re: Goods and Services Tax (Alta.) (1991), 84 D.L.R. (4th) 577 (Alta. C.A.), at pp. 590-91 (“The authorities do not require any contract to indemnify”), per curiam, rev’d on other grounds, [1992] 2 S.C.R. 445. 73 BCCA Decision, at para. 77.
75 Consolidated Factum of Appellants on Cross-Appeal
111. In light of the harm that Canada could reasonably have foreseen flowing from the tobacco strains that it developed and then directed the defendants to use, it is at least arguable that “the notional reasonable observer” would have seen an implicit obligation to indemnify to arise.
112. On the facts pleaded in the third party notices, it is not plain and obvious that the principle of equitable indemnity does not apply. The defendants’ claim for equitable indemnity should therefore be permitted to proceed to discovery so that the defendants may explore the extent to which their alleged “tobacco related wrongs” are traceable to Canada’s directions and requests.
F. The defendants have arguable claims for negligent design and failure to warn.
113. The Court of Appeal correctly found that the defendants have an arguable negligent misrepresentation claim against Canada, but wrongly upheld the striking of the defendants’ negligent design and failure to warn claims. While accepting that Canada owed a prima facie duty regarding those claims at the first stage of the Anns/Cooper test (largely for reasons already discussed in the factum on appeal),74 the Court of Appeal found that duty negated at the second stage by policy concerns, discussed in Knight, as to indeterminate liability for relational economic losses, and a conclusion that the failure to warn claim attacked policy-making. The Court of Appeal erred.
I. There are no policy concerns about indeterminate liability for economic loss because only the defendants have proximity with Canada and only British Columbia may sue the defendants for economic loss.
114. The Court of Appeal’s concern about indeterminate liability emanated from the supposed prospect of “innumerable other parties” – e.g., “employers of key employees who became incapacitated as a result of smoking”, “suppliers of the employer”, “persons having contracts with smokers” or “family members of a smoker” –75 making claims for relational economic loss based on injury to smokers, presumably either directly against Canada or against the defendants, who would in turn make corresponding claims against Canada. However, this parade of horribles is impossible.
115. None of the parties identified by the Court of Appeal could advance a claim against Canada because none have the proximity necessary to assert a prima facie duty of care; only the defendants can say that Canada played an active, central and guiding role in their industry for many decades,
74 See these defendants’ Consolidated Factum of Respondents on Appeal, at paras. 25-51. 75 Knight, at para. 92.
76 Consolidated Factum of Appellants on Cross-Appeal taking on a unique role as the developer and promoter of a key component of their products and advising the defendants about what to make, what to make it with and how to promote it. The spectre of indeterminate liability to “innumerable other” imaginary plaintiffs to whom no duty is owed in the first place provides no policy reason to negate the duty owed to this tiny class of defendants, with whom Canada is alleged to have been uniquely intimate.
116. Neither could the hypothetical parties identified by the Court of Appeal advance a claim against the defendants. This case only exists because British Columbia passed a statute giving it, and it alone, the right to sue for its alleged relational economic loss from injury to smokers.
117. In this connection, the Court of Appeal’s observation that relational economic loss ordinarily is not recoverable ignores that this case is already about relational economic loss, quite apart from the third party claims: British Columbia’s claim against the defendants, for which the defendants seek corresponding damages from Canada, is entirely for relational economic loss as measured by the allegedly increased cost of health care. The question presented here is therefore quite narrow: may defendants exposed to an action for relational economic loss – an action brought by a province under a statute granting only the province the right to recover such loss – seek damages from a third party that negligently exposed the defendants to the action?
118. The answer to that question is at least arguably “yes”. “No”, the Court of Appeal’s answer, would leave the defendants completely exposed to a relational economic loss claim, but excuse the party that placed the defendants in that situation, and do so based on a policy-born fear about this very type of claim. This cannot be fair, and it is certainly not plain and obvious that it is correct.
119. The Court of Appeal sought to downplay the unfairness of its reasoning by observing that, under the Negligence Act, a party may ordinarily seek contribution from another party whose fault contributed to a plaintiff’s harm, obviating any need for an independent claim against that party for relational economic loss.76 That, however, was cold comfort, given that the Court of Appeal also found that the defendants cannot seek contribution here. The defendants’ ability to claim relational economic losses consequent on breaches of duty owed to them is crucial if this Court agrees with the Court of Appeal that British Columbia has statutorily decided to expose to liability only some of a
76 Knight, at para. 84.
77 Consolidated Factum of Appellants on Cross-Appeal number of parties at “fault”, and that these defendants cannot claim contribution from Canada, whose analogous “fault” contributed to the loss for which they may be held liable.
120. In sum, there is no problem of indeterminate liability that plainly and obviously negates Canada’s duty of care to the defendants respecting negligent design and failure to warn. The only relational economic loss claims faced by Canada are those made here by this narrow class of defendants, and, for the reasons given in the factum on appeal,77 these claims are not indeterminate.
II. The defendants’ failure to warn claim concerns operational conduct, not a policy decision.
121. As set out in the factum on appeal, true policy decisions “will usually be dictated by financial, economic, social and political factors or constraints”. By contrast, the operational sphere covers the “performance or carrying out of a policy”, usually “on the basis of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness”.78
122. The defendants’ failure to warn claim is that Canada directed the defendants not to provide warnings about the health hazards of cigarettes and that, if British Columbia is right that this was negligent, Canada is just as negligent. This claim at least arguably concerns operational conduct, not policy-making, because it is unreasonable to conclude on the pleadings that Canada plainly and obviously chose, based on “financial, economic, social and political factors or constraints”, to ensure that the public would receive warnings that were inadequate. Canada’s decisions about whether, when and how to warn appear instead have been based on “expert or professional opinion, technical standards or general standards of reasonableness”, putting them firmly in the operational sphere.
123. The third party notices allege that Canada monitored the scientific literature to assess the nature of the health risks associated with smoking and funded research to explore the relationship between smoking and health. Then, based on the knowledge it had acquired, Canada decided first that warnings were “silly” because public awareness of the potential health risks was ubiquitous. Later, Canada decided that particular warnings would adequately remind smokers of the risks of smoking. Canada then decided that smokers should be informed about the “tar” and nicotine deliveries of cigarettes, and encouraged to reduce their intake of “tar” by smoking cigarettes made
77 See these defendants’ Consolidated Factum of Respondents on Appeal, at paras. 62-68. 78 Brown, at p. 441, per Cory J.
78 Consolidated Factum of Appellants on Cross-Appeal with tobacco developed by Canada itself. In these decisions, expert or professional opinion (about the health risks of smoking and public awareness of the same), technical standards (regarding “tar” and nicotine deliveries of cigarettes and the tobacco developed by Canada) and general standards of reasonableness (concerning what warnings would give adequate information) must all have had a central role to play. There were, on the other hand, no plain and obvious economic, social or political factors at work, except regarding Canada’s initial choice – a choice that the defendants do not attack – to seek to reduce to health hazards to smokers and, in that regard, to provide advice and directions to the defendants.
124. The Court of Appeal nonetheless concluded that the defendants’ failure to warn claim attacks Canada’s policy-making, because it “is against Canada in its role as a regulator”.79 In Knight, the Court of Appeal elaborated as follows:
It seems clear to me from the pleadings that at all material times Canada acted as a regulator in relation to members of the tobacco industry such as ITCAN who sold and advertised these products to consumers. Canada was not in the business of advertising and selling cigarettes nor did it have any commercial interaction with consumers of tobacco products. … Policy considerations underlaid all of [the] various activities undertaken by departments of the federal government.80
125. There are two errors in this reasoning. First, the Court of Appeal’s focus on Canada’s regulatory role would immunize virtually all government activity from tort claims because the government rarely acts as anything other than “a regulator”. If, as the Court of Appeal has suggested, the government needs to be engaged in “business” or a “commercial interaction” for it potentially to owe a duty of care, then the government faces no tort claims except in rare, strictly commercial contexts, and non-commercial cases in which this Court found a duty was owed, like Just and Fullowka, must now be considered to have been wrongly decided.81 In any event, it is arguable that Canada was engaged in “business” and “commercial interaction” with the defendants
79 BCCA Decision, at para. 89. 80 Knight, at para. 100. 81 On the Court of Appeal’s reasoning, this Court’s very recent decision in Nu-Pharm Inc. v. Canada (Attorney General), 2010 SCC 65, must have been wrongly decided, too. There, one of the plaintiff’s allegations was that Health Canada had negligently prohibited the marketing of the plaintiff’s generic drug. Despite the fact that the plaintiff’s claim was against Canada in its role as a regulator, and despite the expectation “that in the case on its merits, [Canada] will argue the defence of statutory authority”, Rothstein J. held that Canada’s defence, and necessarily the threshold question of a duty of care, would “have to be resolved at trial” (para. 19).
79 Consolidated Factum ofAppellants on Cross-Appeal when it advised them about what warnings to give concerning cigarettes made with the low-"tar" tobacco strains that Canada had developed, licensed and promoted to them.
126. Second, policy considerations and decisions based on them can always be said to have underlain the government's activities at some level because the government never professes to have acted arbitrarily. The whole point ofthe policy/operational distinction is to ensure that only policy decisions themselves are off-limits from tort claims, while requiring that "the performance or carrying out" ofpolicy decisions be done with reasonable care.
127. On a proper view ofthe difference between policy decisions and operational conduct, itis at least arguable that the defendants' failure to warn claim pertains to the latter. The policy/operational distinction provides no basis to negate Canada'sprimafacie duty in that relation.
PART IV - SUBMISSIONS CONCERNING COSTS
128. There is no reason to depart from the ordinary rule that costs ofthe cross-appeals should follow the event.
PART V- ORDERS REQUESTED
129. The cross-appeals should be allowed. The portion ofthe Court ofAppeal's order that strikes claims by the defendants against Canada should be set aside, with no order made in substitution for it.
ALL OF WHICH IS RESPECTFULLY SUBMITTED, 7th day ofJanuary, 2011. 6e<~- KENNETH N. AFFLECF SIMON V. OTTER and Q.c., counsel for Rothmans, MICHAEL A. FEDER, Benson & Hedges Inc. and counsel for Philip Morris Rothmans Inc. International Inc. 80 Consolidated Factum of Appellants on Cross-Appeal
PART VI – TABLE OF AUTHORITIES
Paragraph(s)
Case law
A.Y.S.A. Amateur Youth Soccer Assn. v. Canada (Revenue Agency), [2007] 3 59-60 S.C.R. 217, 2007 SCC 42
Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.) 34-36 & 113
Barrette v. Crabtree Estate, [1993] 1 S.C.R. 1027 63
Birmingham and District Land Co. v. London and North Western Railway 102 Company (1886), 34 Ch. D. 261
Blackwater v. Plint, [2005] 3 S.C.R. 3, 2005 SCC 58 100-101
Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., [1997] 3 99-100 S.C.R. 1210
British Columbia v. Canadian Forest Products Ltd., [2004] 2 S.C.R. 74, 2004 77 SCC 38
British Columbia v. Imperial Tobacco Canada Ltd., [2005] 2 S.C.R. 473, 2005 65 SCC 49
Brown v. British Columbia (Minister of Transportation and Highways), [1994] 1 121 S.C.R. 420
Brown v. Cole (1995), 14 B.C.L.R. (3d) 53 (C.A.) 83
Cempel v. Harrison Hot Springs Hotel Ltd. (1997), 43 B.C.L.R. (3d) 219 (C.A.) 83
Cooper v. Hobart, [2001] 3 S.C.R. 537, 2001 SCC 79 34-36 & 113
Dagg v. Canada (Minister of Finance), [1997] 2 S.C.R. 403 58
Fullowka v. Pinkerton’s of Canada Ltd., [2010] 1 S.C.R. 132, 2010 SCC 5 125
Giffels v. Eastern Construction, [1978] 2 S.C.R. 1346 29 & 94-97
Just v. British Columbia, [1989] 2 S.C.R. 1228 125
Merryweather v. Nixan (1799), 8 T.R. 186, 101 E.R. 1337 99
81 Consolidated Factum of Appellants on Cross-Appeal
Paragraph(s)
Nu-Pharm Inc. v. Canada (Attorney General), 2010 SCC 65 125
Palmer v. Wick and Pulteneytown Steam Shipping Co. Ltd., [1894] A.C. 318 99 (H.L.)
Parmley v. Parmley, [1945] S.C.R. 635 102
Placer Dome Canada Ltd. v. Ontario (Minister of Finance), [2006] 1 S.C.R. 715, 61 2006 SCC 20
R. v. Morgentaler, [1993] 3 S.C.R. 463 58
Rawlins v. Monsour (1978), 88 D.L.R. (3d) 601 (Ont. C.A.) 103
Reference re: Goods and Services Tax (Alta.) (1991), 84 D.L.R. (4th) 577 (Alta. 109 C.A.), rev’d, [1992] 2 S.C.R. 445
Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 45 & 58
Robertson v. Taylor (1901), 4 Terr. L.R. 474 (N.W.T.S.C.), rev’d (1901), 31 104 & 109 S.C.R. 615
Saskatchewan Co-operative Elevator Co. v. Grand Trunk Pacific Railway, [1923] 104 2 W.W.R. 8 (Sask. C.A.)
Schreiber v. Canada (Attorney General) (2001), 52 O.R. (3d) 577 (C.A.), aff’d, 44 [2002] 3 S.C.R. 269, 2002 SCC 62
Secretary of State for India v. Bank of India Ltd., [1938] 2 All E.R. 797 (P.C.) 109
Snushall v. Fulsang (2005), 78 O.R. (3d) 142 (C.A.), leave to appeal refused, 83 [2005] S.C.C.A. No. 519 (QL)
Toplis v. Grane (1839), 5 Bing. (N.C.) 636, 132 E.R. 1245 103
Western Surety Co. v. National Bank of Canada, 2001 NBCA 15, leave to appeal 65 refused, [2001] S.C.C.A. No. 187 (QL)
82 Consolidated Factum of Appellants on Cross-Appeal
Paragraph(s)
Secondary sources
Elmer Driedger, Construction of Statutes, 2d ed. (Toronto: Buttersworth, 1983) 45
Glanville Williams, Joint Torts and Contributory Negligence: A Study of 92-93 Concurrent Faults (London: Steven & Sons, 1951)
83 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
PART VII – PROVISIONS DIRECTLY AT ISSUE
84 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
85 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
86 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
87 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
88 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
89 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
90 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
91 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
92 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
93 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
94 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
95 Consolidated Factum of Appellants on Cross-Appeal Health Care Costs Recovery Act, S.B.C. 2008, c. 27
96 Consolidated Factum of Appellants on Cross-Appeal Negligence Act, R.S.B.C. 1996, c. 333
97 Consolidated Factum of Appellants on Cross-Appeal Negligence Act, R.S.B.C. 1996, c. 333
98 Consolidated Factum of Appellants on Cross-Appeal Negligence Act, R.S.B.C. 1996, c. 333
99 Consolidated Factum of Appellants on Cross-Appeal Supreme Court Rules, B.C. Reg. 221/90
100 Consolidated Factum of Appellants on Cross-Appeal Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30
The Tobacco Damages and Health Care Costs Recovery Act, S.B.C. 2000, c. 30 is reproduced in Part VII of these defendants’ Consolidated Factum of Respondents on Appeal.