Reasons for Judgment of the Honourable Chief Justice Finch:

I.

[1]         I have had the advantage of reading in draft form the reasons for judgment of Madam Justice Southin.  I too would dismiss the appeal, but prefer to express my own reasons for reaching that conclusion.

[2]         The defendants appeal from an order of Madam Justice Kirkpatrick pronounced 27 September 2001 certifying this action as a class proceeding pursuant to the Class Proceedings Act, R.S.B.C. 1996, c.50 (the “Act”).  The defendant Medtronic, Inc. (“Medtronic”) is a designer and manufacturer of leads, a component of an artificial cardiac pacing system, and the defendant Medtronic of Canada Ltd. (“Medtronic of Canada”) is the Canadian marketer of the leads in question. The certification order describes a resident class and a non-resident class, each comprised of persons implanted with one of two models of pacing leads.

[3]         James Hoy is the representative plaintiff for the members of the class resident in B.C.  He claims damages for injury, loss, and expense allegedly caused by the defendants’ negligent design, manufacture, marketing, and distribution of the leads.

[4]         The proposed representative plaintiff for the non-resident class is Andrew Steeds.  He has not yet been added as a plaintiff in the action.

[5]         Section 4 reads:

4(1) The court must certify a proceeding as a class proceeding on an application under section 2 or 3 if all of the following requirements are met:

     (a)  the pleadings disclose a cause of action;

     (b)  there is an identifiable class of 2 or               more persons;

     (c)  the claims of the class members raise           common issues, whether or not those common        issues predominate over issues affecting        only individual members;

     (d)  a class proceeding would be the preferable      procedure for the fair and efficient            resolution of the common issues;

     (e)  there is a representative plaintiff who

          (i)  would fairly and adequately represent           the interests of the class,

          (ii) has produced a plan for the                     proceeding that sets out a workable             method of advancing the proceeding on           behalf of the class and of notifying               class members of the proceeding, and

          (iii)does not have, on the common issues,            an interest that is in conflict with               the interests of the other class                   members.

 (2) In determining whether a class proceeding would      be the preferable procedure for the fair and efficient resolution of the common issues, the court must consider all relevant matters      including the following:

     (a)  whether questions of fact or law common to      the members of the class predominate over      any questions affecting only individual         members;

     (b)  whether a significant number of the             members of the class have a valid interest         in individually controlling the                   prosecution of separate actions;

     (c)  whether the class proceeding would involve      claims that are or have been the subject          of any other proceedings;

     (d)  whether other means of resolving the            claims are less practical or less                 efficient;

     (e)  whether the administration of the class         proceeding would create greater                 difficulties than those likely to be               experienced if relief were sought by other         means.

[6]         The common issues certified by the order of 27 September 2001 are:

     1.   Did the defendants owe a duty of care to persons in       whom the leads were implanted?

     2.   Did the defendants breach the standard of care in         designing, manufacturing and distributing the leads,          and if so, when did the breach begin?

     3.   If the defendants breached the duty of care owed to       the plaintiffs, are the plaintiffs entitled to an        award of punitive damages having regard to the               nature of the established breaches?

[7]         The issues on this appeal are whether in certifying these common issues the learned chambers judge erred in her interpretation of s.4, or in its application to the facts of this case.

II.

[8]         An artificial pacemaker is an electronic device implanted in the body to treat abnormal heartbeat rhythms by delivering electrical stimuli to the heart.  A pacing system has two components, a generator and a lead.  The generator is implanted some distance from the heart, and contains the power source for the electrical stimuli.  The lead is an insulated wire that carries electrical pulses between the generator and the heart muscle.

[9]         A lead is either unipolar or bipolar.  A bipolar lead consists of two insulated conductors, two metal electrodes, a fixation mechanism, and a terminal (connector) assembly.  The electrodes perform both a sensing and stimulating function.  They sense electrical signals from the heart so that the stimulus from the generator can be timed appropriately.  The insulated conductors relay the electrical signals between the generator and the electrodes.  In this way, the pacing system works with the body’s natural system to maintain a healthy heartbeat rhythm.

[10]    In this case, Medtronic designed and manufactured leads which used Pellethane 2363-80A (“P80A”) as the inner and outer insulation.  The plaintiff alleges that the use of P80A rendered the leads unreasonably prone to degeneration and failure and, as a result, unsuitable for use in cardiac pacing systems.  The plaintiff alleges the defendants had knowledge of the unsuitability of the leads but nevertheless continued to insulate the leads with P80A.

[11]    The two models of leads at issue are pacing models 4012 and 4004/4004M, both of which have P80A as inner and outer insulation.  A predecessor lead, model 6972, was introduced by Medtronic to the U.S. market in 1978, and was the subject of a recall in the U.S. in 1984.  It was also the subject of a U.S. Congressional investigation.

[12]    In 1983, the defendants began to market the first model, 4012.  The plaintiff says the fundamental design and choice of materials remained the same as that used in the 6972 design.  In support of the claim, the plaintiff relies on a letter from the United States Food and Drug Administration (the “FDA”) dated August 1991, where the FDA stated that the device “may malfunction due to degradation of the polyurethane insulation”.  The FDA expressed the opinion that model 4012 presented “an unreasonable risk of harm to the public health”.  In September 1991, Medtronic issued an urgent health safety alert in response to the FDA’s letter and model 4012 was removed from the market.

[13]    In 1989, the defendants began to market the second model, 4004/4004M.  In support of the claim, the plaintiff relies on a letter from the FDA dated 21 January 1993, which concluded that model 4004/4004M presented “an unreasonable risk of substantial harm”.  As a result, in October 1993 Medtronic issued a health safety alert for the 4004/4004M model leads and that model was removed from the market.

[14]    Medtronic of Canada marketed the leads in Canada from August 1983 to October 1993.  Medtronic of Canada has a head office in British Columbia.

[15]    James Hoy was implanted with a model 4012 lead on or about 20 February 1990.  The lead was removed on or about 28 October 1999.

[16]    The proposed non-resident representative plaintiff, Andrew Steeds, received a model 4004 lead in or about March 1989.  His lead was partially extracted in 1994, and the remnants of the lead were removed in 1999.

[17]    On 6 January 2000 Mr. Hoy commenced a claim against the defendants.  His application to certify a class proceeding against the defendants followed a number of failed attempts for class certification in other jurisdictions.  In the United States, 11 separate applications to certify Medtronic lead class actions have been dismissed, and a class action commenced in Ontario in connection with the model 4004 lead was discontinued.

[18]    The chambers judge heard the certification application in October, 2000.  Prior to and as part of the hearing, the chambers judge heard a number of motions.  At the conclusion of the certification hearing, the chambers judge granted the plaintiff’s counsel permission to file affidavits from U.S. counsel as evidence of the results of parallel litigation in the U.S.  On 29 November 2000, the chambers judge permitted cross-examination of the U.S. counsel.

[19]    On 27 September 2001, the chambers judge allowed the application for certification under the Act: (2001), 94 B.C.L.R. (3d) 169, 2001 BCSC 1343.

III.

[20]    The learned chambers judge considered the requirements for certification mandated by s.4 of the Act, against the three main objects of class proceeding legislation: judicial economy, improved access to the courts, and deterrence.

[21]    She found that the requirements set out in ss.4(1)(a) and (b) were clearly met; the pleadings disclosed a cause of action and there was an identifiable class of two or more persons.  She further held that it was appropriate to certify a non-resident sub-class so that the common issues could be resolved at one trial.

[22]    The issues on this appeal arise from the requirements  of ss.4(1)(c) and (d).  Section 4(1)(c) requires that there be issues common to the class.  The chambers judge regarded the issues of duty of care, standard of care, breach of standard of care, and punitive damages as issues common to all potential class members, thereby satisfying the requirements of the subsection.  However, she found the limitations issues too individualized, having regard to the ten year time period during which the leads were implanted and the individual nature of the plaintiffs’ awareness of their claims.  The judge defined the common issues by reference to the allegations contained in the statement of claim at ¶46 of her reasons.

[23]    The chambers judge identified the “preferable procedure” requirement of s.4(1)(d) as the most contentious aspect of the certification application.  The defendants’ arguments that a class proceeding would not be the preferable procedure for the fair and efficient resolution of the common issues included: that the plaintiff had not demonstrated a demand for access to justice; that a cost/benefit analysis would show that the cost of the class action exceeds the potential recovery of most claimants; and, that the individual issues overwhelmed the common issues.  The defendants also put forward policy arguments in support of the court performing a gate-keeping function to screen unjustifiably complex and costly litigation.

[24]    In response to the defendants’ policy concerns over class proceedings, the learned judge said this:

[71] I think it can be fairly assumed from the experience gained in the United States and, more recently, in Ontario, that the courts there have been driven by their experience to a more cautious scrutiny of proposed class actions. My perception is that this court, which is only now facing the full implications of this legislation on the court’s limited resources, is anxious to avoid the mistakes of other jurisdictions and to learn from their experience. Having said that, however, I am nevertheless obliged to apply the requirements of the Act to the circumstances of the case before me.

[25]    The judge distinguished the American authorities relied on by the defendants by contrasting the language of the B.C. legislation with American legislation which, in some cases, may require that the common issues “predominate” over issues affecting individual class members:

[77] By contrast, the Class Proceedings Act in this province (s.4(1)(c)) specifically mandates that an action be certified “whether or not those common issues predominate over issues affecting only individual members.”

[26]    She then held that the common issues were unlikely to be overwhelmed by individual issues and that there were no better alternatives to a class proceeding:

[78] In the case at bar, the common issues of duty of care, standard of care, breach of the duty of care and punitive damages are unlikely to be overwhelmed by individual issues to the degree found in Tiemstra, supra, or in Bittner, supra. If the determination of the common issues is favourable to the plaintiffs, it will advance their claims to a significant degree.

[79] In addition, there is no evidence that there is an extra-judicial procedure in place for the resolution of the plaintiffs' claims. Their only possible recourse is through the mechanism of a class action. Accordingly, I find that the requirement of s.4(1)(d) of the Act is satisfied. A class proceeding is the preferable procedure for the fair and efficient resolution of the common issues.

[27]    The chambers judge found the requirements set out in s.4(1)(e) were satisfied.  She held the representative plaintiff Mr. Hoy, and the proposed representative plaintiff Mr. Steeds, were appropriate and had produced a litigation plan that was workable, and could be modified as the exigencies of the litigation become known.

[28]    The chambers judge therefore found that the plaintiff had satisfied the requirements for certification.

IV.

[29]    On appeal, the defendants allege three errors in the learned chambers judge’s analysis.  First, the defendants say that the learned judge erred in relying on s.4(1)(c) for the proposition that the Act mandates certification regardless of whether or not the common issues predominate, in her determination that a class proceeding was preferable under s.4(1)(d).  Rather, the defendants say that under s.4(1)(d) the common issues must be viewed in relation to the claims as a whole.  One reason for refusing certification, to be considered with all relevant factors, is the fact that the common issues do not predominate over the individual issues.  The defendants say that the learned judge’s misdirection led to her failure to address the issue of predominance entirely.

[30]    Second, the defendants argue that the chambers judge erred by viewing the common issues in a vacuum.  They say s.4(1)(d) requires the court to envision how the action will develop, in order to assess whether a class proceeding would be a practical and efficient method of advancing the claims.  They say the learned judge should have asked whether the plaintiff had persuaded her on the evidence that success in a common issue trial would leave members of the class with individual claims that could be tried economically.

[31]    Third, the defendants say the chambers judge employed an extreme standard, the “unlikely to be overwhelmed by” standard, when considering whether the common issues predominate over individual issues.  They say cumulatively these three errors led the judge to the wrong conclusion on whether a class proceeding was preferable under s.4(1)(d).

[32]    The defendants also say the judge erred in failing to deny certification because the litigation is not a response to actual claimant demand, but is rather an entrepreneurial venture.  This submission arises from the failed attempts at certification in other jurisdictions, and the court’s obligation to act as a gatekeeper.  These arguments were advanced before the learned chambers judge.  The defendants say the chambers judge had the discretion to take into account the absence of evidence of an actual demand for access to justice on the part of class members other than the plaintiff and Mr. Steeds, and ought to have done so.

[33]    In response, counsel for the plaintiff says the chambers judge properly certified the action as a class proceeding, and in particular applied the appropriate test to the question of preferability.  Moreover, the plaintiff says the defendants’ appeal is an attack on the chambers judge’s practical assessment of whether this case is best managed as a series of individual lawsuits or as a class action.  The plaintiff says an appellate court ought to be slow to interfere with such an assessment under the standard of review set out in Campbell v. Flexwatt Corp. (1997), 44 B.C.L.R. (3d) 343 (C.A.) (“Flexwatt”).

[34]    In summary, the issues on appeal are:

1.  Whether the learned chambers judge erred in her analysis of the relationship between the common and individual issues:

  (a)  by misdirecting herself that the Act              specifically mandates that an action be              certified, whether or not the common issues              predominate;

  (b)  by viewing the common issues largely in a            vacuum; and

  (c)  in or by using the wrong test when comparing         the common and individual issues.

2.  Whether the judge erred in failing to deny certification given that the litigation is not a response to actual claimant demand, but an entrepreneurial venture.

[35]    In addition to the material before the chambers judge, the plaintiff has tendered fresh evidence, with the consent of the defendants, to be considered by this Court.  The evidence concerns the plaintiff’s advertising campaign for out-of-province opt-ins to the class.  As of 1 November 2002, counsel for the plaintiff had received communications from 447 individuals, resident in provinces other than British Columbia, indicating an intention to opt-in to the class proceeding.

[36]    The defendants have, with the agreement of the plaintiff, tendered fresh evidence regarding the intended participation of the governments of the Provinces of British Columbia, Alberta, Ontario, and Nova Scotia in the class proceeding.

V.

[37]    The main issue on this appeal is whether a class proceeding is “preferable” under s.4(1)(d) of the Act.

[38]    In Flexwatt, supra, this Court recognized that a chambers judge has a broad discretion in determining whether a class proceeding meets the criteria of s.4 of the Act.  Determining whether a class proceeding would be preferable under s.4(1)(d) is an important aspect of that discretionary power.  An appellate court ought not to interfere with the exercise of this discretion unless persuaded that the chambers judge erred in principle or was clearly wrong.

[39]    The Supreme Court of Canada commented on the analysis required by s.4(1)(d) in Rumley v. British Columbia, [2001], 3 S.C.R. 184, 2001 SCC 69 (“Rumley”).  McLachlin C.J.C., writing for the Court, stated at ¶35:

[35] The question remains whether a class action would be the preferable procedure. Here I would begin by incorporating my discussion in Hollick as to the meaning of preferability: see Hollick, supra, at paras. 28-31. While the legislative history of the British Columbia Class Proceedings Act is of course different from that of the corresponding Ontario legislation, in my view the preferability inquiry is, at least in general terms, the same under each statute. The inquiry is directed at two questions: first, "whether or not the class proceeding [would be] a fair, efficient and manageable method of advancing the claim", and second, whether the class proceedings would be preferable "in the sense of preferable to other procedures" (Hollick, at para. 28). I would note one difference, however, between the British Columbia Class Proceedings Act and the corresponding Ontario legislation. Like the British Columbia legislation, the Ontario legislation requires that a class action be "the preferable procedure" for the resolution of the common issues: see Ontario Class Proceedings Act, 1992, s.5(1)(d); British Columbia Class Proceedings Act, s.4(1)(d). Unlike the Ontario legislation, however, the British Columbia legislation provides express guidance as to how a court should approach the preferability question, listing five factors that the court must consider: see s.4(2). I turn, now, to these factors.

[40]    The factors described in s.4(2) are whether the common issues predominate over individual issues; whether class members have a valid interest in pursuing individual actions; whether the claims of the proposed class are or have been the subject of another proceeding; whether other means of resolving the claims are less practical or less efficient; and whether the administration of the class proceeding would likely create greater difficulties than other means of resolving the claims.

[41]    The B.C. legislation, unlike its Ontario counterpart, details a non-exhaustive list of factors to be considered in the preferability analysis.  In general terms, however, the preferability inquiry is similar under the B.C. and Ontario statutes.

[42]    In Hollick v. Toronto (City), [2001] 3 S.C.R. 158, 2001 SCC 68 (“Hollick”), McLachlin C.J.C. spoke of the requirement that a class action be the preferable procedure for “the resolution of the common issues”:

[29] The Act itself, requires only that a class action be the preferable procedure for “the resolution of the common issues” (emphasis added), and not that a class action be the preferable procedure for the resolution of the class members’ claims. I would not place undue weight, however, on the fact that the Act uses the phrases “resolution of the common issues” rather than “resolution of class members’ claims”. …

[30] The question of preferability, then, must take into account the importance of the common issues in relation to the claims as a whole. It is true, of course, that the Act contemplates that class actions will be allowable even where there are substantial individual issues: see s.5. It is also true that the drafters rejected a requirement, such as is contained in the American federal class action rule, that the common issues “predominate” over the individual issues: see Federal Rules of Civil Procedure, Rule 23(B)(3) (stating that class action maintainable only if “questions of law or fact common to the members of the class predominate over any questions affecting only individual members”); see also British Columbia Class Proceedings Act, s.4(2)(a) (stating that, in determining whether a class action is the preferable procedure, the court must consider “whether questions of fact or law common to the members of the class predominate over any questions affecting only individual members”). I cannot conclude, however, that the drafters intended the preferability analysis to take place in a vacuum. There must be a consideration of the common issues in context.

[43]    A judge, in determining whether a class proceeding is preferable, is therefore obliged to evaluate the common issues in context, and must consider, as one of at least five factors, whether the common issues predominate over individual issues.

[44]    In Tiemstra v. Insurance Corp. of British Columbia (1996), 22 B.C.L.R. (3d) 49 (S.C.), aff’d (1997), 38 B.C.L.R. (3d) 377 (C.A.) (“Tiemstra”), the chambers judge considered the question of predominance and contrasted American and Ontario class action legislation.  The learned judge found that the question of predominance was mandatory in American jurisdictions, and that the analysis was therefore more restrictive than in B.C.; but that the Ontario legislation had no equivalent provision to s.4(2)(a) of the Act, which includes predominance as a factor to be considered in relation to the “preferable procedure” question.

[45]    Ultimately, the chambers judge in Tiemstra held, and this Court agreed, that little would be gained by certifying the common issue of whether ICBC’s “no crash, no cash” policy constituted a breach of its obligations owed to insureds.  At most, the plaintiff could get a declaration that each claim should be assessed according to its own merits.  The members of the class would then face the same cost/benefit analysis as if they had pursued individual actions.

[46]    In summary, s.4(1)(d) requires a court to be satisfied that a class proceeding would be the preferable way of resolving the common issues, viewed in the context of the claims as a whole.  Section 4(2) requires a court to consider five factors relevant to the preferability question, including whether the common issues predominate over individual issues.

VI.

[47]    I have not been persuaded that the learned chambers judge erred in her conclusion that the plaintiff satisfied the certification requirements.

[48]    The defendants’ first argument is that the learned chambers judge misdirected herself by considering s.4(1)(c) in the context of her preferability analysis, which led to a failure to address the issue of predominance.  In my respectful view, when read in context, it is apparent that the judge referred to s.4(1)(c) in order to distinguish the American authorities relied upon by the defendants.  The fact that American jurisdictions take a different analytical approach to the question of certification has been commented upon by the Supreme Court of Canada: see Hollick, supra.

[49]    Moreover, the chambers judge did not fail to address the issue of predominance.  It is evident from her reasons that she was very much alive to the existence of individual issues.  Indeed, at ¶60 and ¶61 of her reasons, she canvassed a number of individual issues that would likely arise.  She then found at ¶78 that the common issues were “unlikely to be overwhelmed by individual issues to the degree found in Tiemstra, supra, or Bittner, supra.”  She said the determination of the common issues would advance the claims to “a significant degree” (my emphasis).

[50]    I understand this to mean that in her view the determination of the common issues would advance the claims to an appreciable extent, and that the individual issues would likely be less important aspects of the claims.  In other words, the common issues predominate over those affecting only individual claims.

[51]    Although the reasons of the chambers judge do not track the language of s.4(2) precisely, I am of the view that she assessed those circumstances relevant to the criterion of predominance in deciding that a class proceeding was preferable.  I note in passing that when giving her reasons she did not have the benefit of the Supreme Court of Canada’s judgment in Rumley, supra.

[52]    Accordingly, I would not accede to the defendants’ third argument, namely, that the learned judge applied the wrong standard in her consideration of the predominance issue.  It is my opinion that the judge’s analysis supports a conclusion that the common issues predominate over individual issues.

[53]    The defendants’ second argument is that the chambers judge viewed the common issues in a vacuum.  Section 4 requires a judge to look at the common issues in context, and to assess whether a class proceeding would be a practical and efficient method of advancing the claim.  With respect, I do not think the judge must then be persuaded on the evidence that success in a common issue trial would leave members of the class with individual claims that could be tried economically.

[54]    A number of the authorities speak of a “cost/benefit” analysis in the context of the preferability question: see, for example, Tiemstra, supra, and Flexwatt, supra.  However, in my respectful view the cost/benefit analysis is not of the nature described by the defendants, i.e. it is not an accounting exercise to determine economic viability.  The analysis, rather, involves an assessment of whether a class proceeding would advance the claims in any meaningful way.  If resolution of the common issues goes a considerable measure towards obtaining relief for the plaintiffs, then the benefit of proceeding by way of class action, as opposed to individual actions, is a factor in favour of certification.  Certification, in such circumstances, would advance the objects of judicial economy and improved access to the courts.  If, as was the case in Tiemstra, supra, resolution of the common issues would not put the plaintiffs in any better position than if they simply pursued individual claims, it is clear that there is little, if any, benefit to proceeding by way of a class action.

[55]    I am therefore not persuaded that the chambers judge erred in principle by not considering whether the plaintiff’s individual claims, after a successful resolution of the common issues, would be economically viable.

[56]    The defendants say the learned chambers judge further erred in failing to deny certification on the basis that there was no evidence of actual demand for the class proceeding.  The defendants rely on Hollick, supra, and the judgment of Mr. Justice Bauman in Samos Investments Inc. v. Pattison (2001), 22 B.C.L.R. (3d) 46, 2001 BCSC 1790, aff’d (2003) 10 B.C.L.R. (4^th) 234, 2003 BCCA 87 (“Samos”) for the proposition that the plaintiff was required to demonstrate the support of other members of the proposed class.

[57]    There is, before this Court by consent, evidence of 447 individuals who intend to join the class.  That evidence was not before the chambers judge.  In my opinion, however, the judge cannot be said to have erred in certifying this proceeding in the absence of this fresh evidence.  In my view, in the circumstances of this case, the learned judge correctly applied the statutory criterion in s.4(1)(b), namely that there was an identifiable class of two or more persons.

[58]    In Samos, Bauman J. was faced with a “type of case where an identifiable class of persons with common issues [was] not obvious.”  In this case, the learned judge was able to identify a potentially large number of claimants (¶58), and noted that if the certified action does not attract a sufficiently large class it would be open to the class action judge to de-certify the class action.  Accordingly, I would reject this ground of appeal.

[59]    The final point to be addressed is the argument, based on the defendants’ fresh evidence, that a class proceeding is not the preferable procedure on account of the governments’ subrogated claims.  The defendants say the common issues could be determined in a government led action, and that this would be a preferable alternative to a class proceeding. I am not persuaded that the interest taken by the four provincial governments in the Medtronic litigation amounts to an adequate, or preferable, alternative to a class proceeding.

[60]    In conclusion, I cannot say the chambers judge erred in principle, or was clearly wrong, and I find no basis on which to interfere with her decision to certify this action as a class proceeding.

[61]    I would dismiss the appeal.

Reasons for Judgment of the Honourable Madam Justice Southin:

[62]    The outcome of this appeal rests on the proper applica­tion to the Class Proceedings Act, R.S.B.C. 1996, c. 50, of the principle stated by Sir N. C. Tindal, Chief Justice of the Court of Common Pleas, on behalf of all the judges, in answer to a question put to them by the House of Lords in the Sussex Peerage case (1844), 11 Cl. & F. 85 at 143:

     My Lords, the only rule for the construction of Acts of Parliament is, that they should be construed according to the intent of the Parliament which passed the Acts.  If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense.  The words themselves alone do, in such case, best declare the intention of the lawgiver.  But if any doubt arises from the terms employed by the legislature, it has always been held a safe mean of collecting the intention, to call in aid the ground and cause of making the statute, and to have recourse to the preamble, which, according to Chief Justice Dyer [Stowell v. Lord Zouch, Plowden, 369], is "a key to open the minds of the makers of the Act, and the mischiefs which they intended to redress."

[63]    At issue is this order of the Honourable Madam Justice Kirkpatrick pronounced the 27th September, 2001:

1)   The within action is certified as a class action pursuant to the Class Proceedings Act, R.S.B.C. 1996, c. 50;

2)   The members of the class are all persons resident in Canada implanted with Medtronic pacemaker Pacing Leads with model numbers 4004/4004M and 4012 (the "Leads") who have not executed releases in favour of one or both of the defendants in relation to the functioning of the Leads.

3)   James Hoy is representative plaintiff for the members of the class resident in B.C.

4)   Andrew Steeds is representative plaintiff for members of the class who are not resident in B.C., and the style of cause in the Writ of Summons, Statement of Claim and Statement of Defence are to be amended to add Mr. Steeds as a plaintiff.

5)   The following common issues are certified:

a)   Did the defendants owe a duty of care to persons in whom the Leads were implanted?

b)   Did the defendants breach the standard of care in designing, manufacturing and distributing the Leads, and if so, when did the breach begin?

6)   In relation to the common issue in para. 5(b), the following sub-issues are to be considered:

a)   Was the insulation on the Leads unreasonably prone to degeneration and failure due to:

i)    Metal Ion Oxidation ("MIO");

ii)   Environmental Stress Cracking ("ESC"); and

iii)  negligent processing of polyurethane during manufacture of the Leads?

b)   Did the defendants fail to:

i)    ensure that the Leads were free of defects;

ii)   perform sufficient pre-market tests on the Leads;

iii)  design and manufacture Leads that were adequate to protect against failure and degeneration during ordinary use in employing P80A as insulation;

iv)   produce a product capable of withstanding the stresses of ordinary and foreseeable uses;

v)    employ available design and manufacturing techniques that would have reduced the likelihood of failure of the Leads;

vi)   ensure that the Leads did not deviate in a material way from their design and release specifications;

vii)  recall the Leads when they knew or ought to have known of the risk of injury prior to the implantation of Leads into class members;

viii) obtain all required approvals;

ix)   provide Health Canada (and its predecessors) and the U.S. Food and Drug Administration ("FDA") with all relevant information regarding any risks posed by the Leads; and

x)    provide adequate warnings as to any risks of the Leads to physicians, surgeons and all other intermediaries, as well as class members, of any potential risks or hazards associated with the use of the Leads?

c)   If the defendants breached the duty of care owed to the plaintiffs, are the plaintiffs entitled to an award of punitive damages having regard to the nature of the established breaches?

7)   The nature of the claim asserted by the class as against the defendants is in negligence.

8)   The relief sought by the class is:

(a)  general damages;

(b)  aggravated damages;

(c)  punitive damages;

(d)  special damages;

(e)  costs pursuant to s. 37 of the Class Proceedings Act, R.S.B.C. 1996, c. 50;

(f)  interest pursuant to the Court Order Interest Act, R.S.B.C. 1996, c. 79;

(g)  such further and other relief as to this Honourable Court may seem just.

[64]    These reasons cannot be fully understood unless the reader first reads the reasons of the learned chambers judge which are reported at 94 B.C.L.R. (3d) 169, 2001 BCSC 1343.

[65]    The order is founded upon this statement of claim:

AMENDED STATEMENT OF CLAIM

THE PARTIES

1.   The Plaintiff resides at 217-3280 Plateau Boulevard, in the City of Coquitlam, in the Province of British Columbia.

2.   The Defendant Medtronic Inc. ("Medtronic") is a company incorporated under the laws of Minnesota, with a head office at 7000 Central Avenue, NE, Minneapolis, Minnesota.

3.   The Defendant Medtronic of Canada Ltd. ("Medtronic Canada") is a company incorporated under the laws of Canada, with a head office within the Province at 2100-505 Burrard Street, Vancouver, B.C.  Medtronic Canada is a division of Medtronic.

THE CLASS

4.   The Plaintiff seeks to represent the following class of persons (the "Class"):

All persons resident in Canada implanted with Medtronic pacemaker pacing lead Models 4004/4004M and 4012 (the "Leads") manufactured or distributed by the Defendants.

THE PLAINTIFF

5.   The Plaintiff was implanted with a heart pacemaker lead Model 4012 manufactured and distributed by the Defendants on or about February 20, 1990.

6.   Over an extended period of time, and unknown to the Plaintiff, the Plaintiff experienced a progressive failure of the Polyurethane 80A insulation in his lead.  As a result of the insulation failure and resultant low impedence, the Plaintiff sustained personal injury and required surgery to replace his lead on October 28, 1999.

MANUFACTURE AND DISTRIBUTION

7.   The Defendants designed, manufactured, marketed, and distributed the Leads.

8.   The Defendants knew or ought to have known that the Leads manufactured and distributed by them would be and were implanted in residents of British Columbia.  The Defendants placed the Leads into the North American stream of commerce.

BACKGROUND FACTS

9.   The Leads are the electrical cable that connects an implanted pacemaker with the heart.  It delivers impulses to the heart muscle to help it beat in regular rhythm.

10.  The Leads are insulated with a covering made of Polyurethane 80A.  The Defendants have used Polyurethane 80A insulated permanent pacemaking leads since their introduction.

11.  Despite information available to the Defendants from the early 1980's of failure of several specific Polyurethane 80A leads, the Defendants chose to insulate the Leads with Polyurethane 80A.  The Leads are unreasonably prone to failure or degeneration.

12.  The means by which the Leads' insulation was unreasonably prone to degeneration and failure are:

(a)  Metal Ion Oxidation ("MIO")

(b)  Environmental Stress Cracking ("ESC"), and

(c)  negligent processing of the polyurethane during the manufacture of the Leads.

MIO is a process caused by oxidative degradation of the polyurethane insulation by metal ions released by corrosion of the lead wires.  ESC is surface fracturing of the insulation which results from the material's interaction with the body's fluids and natural motions.  The Plaintiff says that these two processes as well as the negligent processing occurred to a much greater extent in the Leads than other leads manufactured by the Defendants or those of other lead manufacturers.

13.  Current leakage which occurs with insulation failure or degeneration causes over-sensing, under sensing, failure to capture, low impedence, early pulse generator battery depletion in the presence of acceptable chronic pacing thresholds, or any combination of the above.  Complications of an insulation failure or degeneration include serious injury or death, as well as the need to replace or remove the Leads.

14.  Leads can fail at any time; therefore, it is medically necessary that Class members undergo periodic examinations and testing.  Even with periodic examinations, Class members are at risk of a failure occurring at any time which can be fatal.  Class members are continuously at risk, will require medical monitoring, and may require replacement or removal of the Leads.

PRODUCT DEFECT AND NEGLIGENCE

15.  The Leads sold or supplied by the Defendants were defective in design or manufacture or both, and were not fit for their intended purpose.  When they were sold or supplied by the Defendants, the foreseeable risks exceeded the associated benefits, particularly when compared to available alternatives.

16.  The Defendants owed the Plaintiff and the Class a duty to exercise reasonable care in designing, selecting materials, researching, testing, manufacturing, compounding, assembling, developing, analysing, recommending, merchandising, advertising, promoting, supplying and/or selling the Leads.  The Defendants failed to meet this duty.

17.  Further particulars of the negligence of the Defendants include, but are not limited to, the following:

(a)  failing to ensure that the Leads were free of defects;

(b)  failing to perform proper and sufficient pre-marketing tests on the Leads;

(c)  designing and/or manufacturing the Leads of substandard or inappropriate materials which were inadequate to protect against failure and degeneration during ordinary usage;

(d)  negligently designing and/or manufacturing the Leads using Polyurethane 80A when the Defendants knew or ought to have known that the Leads would fail and degenerate at an unreasonable rate in the human body;

(e)  failing to ensure that the Leads were fit for their intended purpose;

(f)  negligently selecting, manufacturing and assembling the component parts of the product, thus producing a final product incapable of standing the stress of ordinary and foreseeable usage;

(g)  failing to employ advanced yet available design and manufacturing techniques which would have reduced the likelihood of failure of the Leads;

(h)  failing to test the Leads in a manner that would fully disclose the magnitude of the risks;

(i)  failing to ensure that the Leads did not deviate in a material way from their design and release specifications;

(j)  failing to recall the Leads when they knew or should have known of the risk of injury, and prior to the implantation into Class members;

(k)  failing to cease manufacture and distribution of the Leads when they knew, or should have known, that a significant number of injuries had been caused by the Leads and that the Leads were defective;

(l)  failing to obtain all required approvals for the Leads;

(m)  failing to provide Health Canada (and its predecessors) and the United States Food and Drug Administration with all relevant information regarding the Leads;

(n)  failing to provide adequate warnings as to the risks of the Leads and failing to inform adequately and sufficiently the doctors, surgeons, and all other intermediaries, as well as Class members, of the potential risks and hazards associated with the use of the Leads when they knew or should have known of said risks.

CAUSATION AND DAMAGES

18.  As a result of the negligence of the Defendants, the Plaintiff and the Class have suffered and will continue to suffer serious and permanent personal injury to their bodies, including mental distress, and emotional or psychological trauma or injury.  Such injuries were foreseeable by the Defendants.

19.  Further particulars of the personal injuries sustained by the Plaintiff are:

(a)  Infection, shortness of breath, chest pains, nausea, ventricular dysfunction, heart failure, loss of capture and sensing failure of the pacing system, and reduced physical capacity prior to removal of pacemaker lead;

(b)  Interference with daily life through the need for increased attendances for medical monitoring and assessment;

(c)  Mental anguish as a result of concerns over the suitability of the pacemaker lead;

(d)  Surgery required to remove pacemaker lead and replace with new lead wire;

(e)  Physical pain, reduced capacity and infection following the surgery.

20.  Further particulars of the loss and damage suffered by the Plaintiff and the Class which were caused by or contributed to by the negligence of the Defendants or any of them are as follows:

(a)  pain, suffering, loss of quality and enjoyment of life, and loss of life expectancy;

(b)  past and future loss of income;

(c)  loss of earning capacity and future loss of opportunity;

(d)  past and future costs of care, including medical expenses;

(e)  special damages, loss and expense.

21.  Defendants' acts outlined above can be variously described as harsh, vindictive, reprehensible, malicious, high handed, arbitrary, or deserving of condemnation and punishment and the Plaintiff therefore seeks punitive damages against the Defendants.

WHEREFORE the Plaintiff claims against the Defendant as follows:

(a)  general damages;

(b)  aggravated damages;

(c)  punitive damages;

(d)  special damages;

(e)  the costs of this action;

(f)  interest pursuant to the Court Order Interest Act;

(g)  such further and other relief as this Honourable Court may deem just.

[66]    By the Class Proceedings Act, supra:

1    In this Act:

* * *

"common issues" means

(a)  common but not necessarily identical issues of fact, or

(b)  common but not necessarily identical issues of law that arise from common but not necessarily identical facts;

* * *

4  (1)    The court must certify a proceeding as a class proceeding on an application under section 2 or 3 if all of the following requirements are met:

(a)  the pleadings disclose a cause of action;

(b)  there is an identifiable class of 2 or more persons;

(c)  the claims of the class members raise common issues, whether or not those common issues predominate over issues affecting only individual members;

(d)  a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues;

(e)  there is a representative plaintiff who

(i)   would fairly and adequately represent the interests of the class,

(ii)  has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii) does not have, on the common issues, an interest that is in conflict with the interests of other class members.

(2)  In determining whether a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues, the court must consider all relevant matters including the following:

(a)  whether questions of fact or law common to the members of the class predominate over any questions affecting only individual members;

(b)  whether a significant number of the members of the class have a valid interest in individually controlling the prosecution of separate actions;

(c)  whether the class proceeding would involve claims that are or have been the subject of any other proceedings;

(d)  whether other means of resolving the claims are less practical or less efficient;

(e)  whether the administration of the class proceeding would create greater difficulties than those likely to be experienced if relief were sought by other means.

* * *

7    The court must not refuse to certify a proceeding as a class proceeding merely because of one or more of the following:

(a)  the relief claimed includes a claim for damages that would require individual assessment after determination of the common issues; ...

[67]    The thrust of the argument of Mr. Poulus on behalf of the appellants, as I understand it, is that the learned judge misdirected herself when she addressed subsections (c) and (d) of s. 4(1).

[68]    In his words:

The Wrong Preferability Test

1.   The learned judge misdirected herself as to the legal principles governing her analysis, as follows:

(a)  section 4(1)(c) prohibited her from refusing certification based on a finding that individual issues overwhelm common issues; and

(b)  a class action need only be the preferable means for resolving the common issues, not the entire action.

2.   Because of those two misdirections, the learned judge mistakenly analysed the common issues in isolation from the individual issues and failed to address the essential question of what impact the resolution of those common issues in favour of the class would have on the economic feasibility of prosecuting individual claims to judgment.

3.   In analysing preferability, the learned judge:

(a)  noted the unanimous US findings that the individual issues overwhelmed the common issues; and

(b)  in substance accepted the defendants' submissions as to the extent of individual issues to be tried.

4.   The learned judge failed to address the implications of those findings.  Specifically, she

(a)  failed to make the statutorily required finding on predominance;

(b)  considered the common issues in isolation; and

(c)  failed to make an assessment of the manageability of the individual issues trials.

[69]    As to the first alleged misdirection, I do not consider the learned judge meant that she was thus prohibited.  The passage in issue is paragraph 77:

[77]  By contrast, the Class Proceedings Act in this province (s. 4(1)(c)) specifically mandates that an action be certified "whether or not those common issues predominate over issues affecting only individual members."

[70]    But that passage is in the context of the learned judge addressing the requirement of "preferable procedure" and all she was doing was contrasting the British Columbia statute with the statutes under consideration in certain American authorities. 

[71]    As to the other assertion of misdirection, it is unfortunate that the learned judge delivered her reasons before the Supreme Court of Canada delivered, on 18th October, 2001, its reasons in Rumley v. British Columbia, [2001] 3 S.C.R. 184.  Had she had those reasons before her, she may well have adopted the technique of analysis adopted by McLachlin C.J.C. at paras. 35 et seq, that is to say, commenting on each of the factors in the context of the particular application.

[72]    I infer from the learned judge's reasons for judgment that she addressed "preferable procedure" in the way in which she did because of the way in which the appellants had framed their argument:

[51]  The defendants approached this issue by applying the concept of access to justice as formulated in Abdool [(1995), 121 D.L.R. (4th) 496 (Ont. Div. Ct.)] as an analytical tool.  The defendants argue that the notion that certification creates access to justice is based on three assumptions:

(i)   that a widespread demand exists for access to judicial relief;

(ii)  that demand is being stifled by the expense of individual litigation; and

(iii) that certification will eliminate the expense barrier.

[52]  The defendants, in an innovative and detailed submission, argue that none of the above assumptions are met in the circumstances of this proceeding.

[73]    As I understand the appellants' submission in this Court, their focus has now shifted from the points they made below to the factor in s. 4(2)(a).  I conclude thus because Mr. Poulus speaks of "the statutory mandated assessment of predominance".

[74]    With respect, this argument in the court below was not to the point.  It addressed not the words of the Act but the various arguments - one might say philosophical concepts - which led the Legislature to enacting the Class Proceedings Act.

[75]    Whether the Act is a good or bad thing, whether, for instance, it has wrapped in a cloak of respectability a contemporary version of "ambulance chasing", is not relevant to the task of the judge addressing an application for certification.  The judge's task is to expound the words enacted by the Legislature in their natural and ordinary sense.

[76]    It is tempting to dismiss the argument put forward in this Court out of hand on the footing that it does not lie in the mouths of the appellants, having made the arguments they did below, to complain now that the learned judge did not expressly address that subsection and its relationship to subsection (d) of s. 4(1).

[77]    But because the construction of this Act is of importance to many litigants, I propose to do so.

[78]    Subsection (2) is about the "fair and efficient resolution of the common issues".  It is not about the "fair and efficient resolution of all the issues between a claimant and the defendant".

[79]    The verb "predominate" in subsection (a) has various shades of meaning.  Here, the appropriate meaning is to be the "stronger, main or leading element" (Shorter Oxford English Dictionary, p. 1653).  In this case, for all those persons who have had these pacemakers implanted, a main question is whether the defendant was negligent.

[80]    On the point as to what subsection (2) is about, as I understand the argument of Mr. Poulus:

14.  ... the Supreme Court impliedly overruled this court's reasoning at paragraph 65 of Campbell, and the cases that have followed it....

[81]    The paragraph of Campbell v. Flexwatt Corp. (1997), 44 B.C.L.R. (3d) 343 (C.A.) at 362, was in part this:

[65]  It is to be noted that a class proceeding does not have to be the preferable procedure for resolving the whole controversy, but merely the preferable procedure for resolving the common issues.... 

[82]    I am quite unable to see that the Supreme Court of Canada could or did overrule "this court's reasoning [in] Campbell" simply because all that Cumming J.A. was doing in that paragraph was noting the words of the statute.

[83]    In my opinion, with respect, the appellants' argument seeks to impose on this statute words that are not in it and to diminish the import of words that are.

[84]    In referring to Campbell v. Flexwatt Corp., Mr. Poulus says:

15.  In the appellants' submission, there is a lack of certainty as to the correct analysis to be applied in British Columbia when considering the significance of the common issues presented in a proposed class proceeding.  At least one other B.C. case after the trio has followed the implicitly-overruled passage in Campbell v. Flexwatt.  For that reason, in the appellants' respectful submission, this court should settle the law in British Columbia and make it clear that the preferability of a class proceeding must be assessed in the context of all of the issues presented in the case, common and individual, based on a practical cost benefit approach, as provided in Tiemstra and Hollick, including an assessment of the manageability of the trials of the individual issues.

[85]    In that paragraph, we are being invited to rewrite this statute.  As I have already remarked, the British Columbia statute is about the fair and efficient resolution of the common issues.  There is not a word in it about a "practical cost benefit approach" to resolving all the issues.

[86]    Subsection (2) requires the Court to consider certain questions.  It does not require the Court to answer them in a certain way in order for the Court to conclude that a class action would be the preferable procedure.  On the findings of the learned trial judge and upon the arguments which have been put to us, it is my view that the answers to the questions posed by subsection (2) are the following:

1.   "(a) whether questions of fact or law common to the members of the class predominate over any questions affecting only individual members"

At this stage it is impossible to answer this question with certainty but the answer appears to be that the common issues do predominate.

2.   "(b) whether a significant number of the members of the class have a valid interest in individually controlling the prosecution of separate actions"

There is no evidence that this is so.

3.   "(c) whether the class proceeding would involve claims that are or have been the subject of any other proceedings"

There is no evidence that this is so.

4.   "(d) whether other means of resolving the claims are less practical or less efficient"

Another means of resolving the claims would be individual actions and that it seems to me would clearly be less efficient.

5.   "(e) whether the administration of the class proceeding would create greater difficulties than those likely to be experienced if relief were sought by other means"

The evidence thus far does not indicate that that would be so.

[87]    The appellants sought before us, as my lord the Chief Justice notes, to adduce further evidence.  For the reasons he gave, I too would reject that application and, being of the opinion that the learned judge correctly disposed of the application before her, I would dismiss the appeal.

“The Honourable Madam Justice Southin”