Individual to Group to Class Disputes in Franchising – Considerations for Resolution

Appendix A

Ontario Franchise Litigation – Certified and Pending Class Proceedings

Certification decision: December 9, 2002YesQuizno’s Canada Restaurant Corporation v. 2038724 Ontario Ltd.May 12, 2006

Court of Appeal:

June 24, 2010

Divisional Court: April 27, 2009

Certification decision: March 4, 2008YesLandsbridge Auto Corp. and 405341 Ontario Ltd. v. Midas Canada Inc. and Midas International CorporationJune 29, 2007March 26, 2009

YesFairview Donut Inc. and Brule Foods Ltd. v. The TDL Group Corp. and Tim Hortons Inc.June 12, 2008November 29- December 3, 2010Awaiting Hearing6323588 Canada Ltd. v. Panzerotto Pizza & Wing MachineJune 20, 2008No certification hearing scheduledN/A578115 Ontario Inc. v. Sears Canada Inc.May 15, 2009August 23, 2010Yes1250264 Ontario Inc. v. Pet Valu Canada Inc.December 9, 2009October 21-22, 2010Awaiting Decision on CertificationT A & K Enterprises Inc. v. Suncor Energy Products Inc. and Suncor Energy Inc.January 18, 2010November 15-16, 2010Awaiting HearingTrillium Motor World Ltd. v. General Motors of Canada Ltd. and Cassels Brock & Blackwell LLPFebruary 12, 2010December 15-17, 2010Awaiting Hearing

[1] Allan D.J. Dick is a partner at Sotos LLP and Jennifer Dolman is a partner at Oselr, Hoskin & Harcourt LLP.  The authors wish to acknowledge the assistance of Geoffrey Grove, an associate at Osler, Hoskin & Harcourt LLP.

[2] See, for example, the Alberta Franchises Act, R.S.A. 2000, c. F-23; the Ontario Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c.3 [Arthur Wishart Act]; and the P.E.I. Franchises Act, Chapter F-14.1; (Note:  underlined authorities contain hyperlinks to CanLII and other publicly accessible databases, except where decisions are unavailable).

[3] 1176560 Ontario Ltd. v. Great Atlantic & Pacific Company of Canada Ltd. (2002), 62 O.R. (3d) 535 (S.C.J.) at para. 5, aff’d (2004) 70 O.R. (3d) 182 (Div. Ct.), leave to appeal denied (C.A.) [A&P]. (Osler, Hoskin & Harcourt LLP acted for A&P. Sotos LLP acted for 1176560 Ontario Ltd.)

[4] Landsbridge Auto Corp. v. Midas Canada Inc. (2009), 73 C.P.C. (6th) 10 (Ont. S.C.J.) [Midas Certification] (Sotos LLP acted for Landsbridge Auto Corp).

[5] 2038724 Ontario Ltd. v. Quiznos Canada Restaurant Corp. (2009), 96 O.R. (3d) 252 [Quizno’s Div. Ct.] (Sotos LLP acted for 2038724 Ontario Ltd.).

[6] Mayotte v. Ontario, 2010 ONSC 3765, leave to appeal to Div. Ct. denied September 24, 2010 per Sachs J [Mayotte]. (Sotos LLP acted for Mayotte).

[7] 578115 Ontario Inc. v. Sears Canada Inc., 2010 ONSC 4571 [Sears].

[8] See Appendix A for a list of certified and proposed class proceedings in Ontario.

[9] Quizno’s Canada Restaurant Corporation v. 2038724 Ontario Ltd. 2010 ONCA 466 at para. 62 (C.A.) [Quiznos C.A.].

[10] Ontario Law Reform Commission, Report on Class Actions (1982) Vol. 1, Ministry of the Attorney General, 1982, at p.128.

[11] See, for example, 1318214 Ontario Ltd. v. Sobeys Capital Inc., [2010] O.J. No. 3211 (S.C.J.) in which a small group of Sobeys franchisees have claimed breach of contract and breach of the duty of fair dealing under the Arthur Wishart Act (Sotos LLP is acting for the plaintiff franchisees).

[12] Class Proceedings Act, 1992, S.O. 1992, c. 6 [CPA].

[13] See Appendix A for an illustration of the possible delays between the issuance of the statement of claim and the final decision regarding certification. For example, in Fairview Donut Inc. and Brule Foods Ltd. v. The TDL Group Corp. and Tim Hortons Inc., 2008 CanLII 60983 (Ont. S.C.J.), the statement of claim was issued in June, 2008 and the certification motion has not yet been heard.

[14] Stoneleigh Motors Ltd. v. General Motors of Canada Ltd., [2010] O.J. No. 1621 (S.C.J.) (Osler, Hoskin & Harcourt LLP acted as counsel for General Motors of Canada Ltd.).

[15] Id., at para. 79.

[16] In light of the focus on expediency in the updated Ontario Rules of Civil Procedure, it is unlikely that the right to examine every member of a plaintiff group would stand as a significant barrier in terms of timing and expense. The new proportionality rules for discovery in Rule 29.2 and the requirement that the parties reach a discovery plan in Rule 29.1 should help to alleviate delays associated with group proceedings. Further, Rule 31.05.1 states that no party shall exceed seven hours for its examinations, regardless of the number of parties to be examined, except with consent or with leave.

[17] Quiznos C.A., supra.

[18] 405341 Ontario Limited v. Midas Canada Inc., 2010 ONCA 478 [Midas C.A.] (Sotos LLP acted for 405341 Ontario Limited).

[19] A&P, supra.

[20] CPA, at s. 5(1).

[21] A&P, supra.

[22] Midas Certification, supra.

[23] Quizno’s Div. Ct., supra.

[24] Sears, supra.

[25] Anderson v. Wilson (1999), 175 D.L.R. (4th) 409 at para. 16 (Ont. C.A.).

[26] As summarized in Abdool v. Anaheim Management Ltd. (1995), 21 O.R. (3d) 453 at 469 (Div. Ct.).

[27] Dow Chemical Canada Inc. v. Shell Chemicals Canada Ltd., 2010 ABCA 126 at para. 23.

[28] Hollick v. Toronto (City) (2001), [2001] 3 S.C.R. 158 at para. 17 [Hollick]; Cloud v. Canada (Attorney General) (2004), 73 O.R. (3d) 401 (C.A.) at para. 45, leave to appeal denied, [2005] S.C.C.A. No.50 [Cloud]; Western Canadian Shopping Centres Inc. v. Dutton (2001), [2001] 2 S.C.R. 534 at para. 38 [Western Canadian]; and Bywater v. T.T.C., [1998] O.J. No. 4913 (Gen. Div.).

[29] Hollick, supra at paras. 16, 18, 25;  Carom v. Bre-X Minerals Ltd. (2000), 196 D.L.R. (4th) 344 (C.A.) at paras. 40-41, leave to appeal denied, [2008] S.C.C.A. No.660 [Bre-X]; Cloud v. Canada (Attorney General) (2004), 73 O.R. (3d) 401 at para. 52 (C.A.) [Cloud].

[30] Hollick, supra at para. 25.

[31] Campbell v. Flexwatt Corp. (1997), [1997] B.C.J. No. 2477 at para. 53 (C.A.); Bre-X, supra at para. 41.

[32] CPA, supra at ss. 6 and 25.

[33] CPA, supra at ss. 24 and 25. See, also, Cassano v. The Toronto-Dominion Bank (2007), 87 O.R. (3d) 401 (C.A.) at para. 37, leave to appeal denied. [2008] S.C.C.A. No. 15 [Cassano]; Quiznos C.A., supra at paras. 54-9.

[34] Sears, supra at para. 51.

[35] Cloud, supra at para. 55.

[36] Quizno’s Div. Ct., supra at para. 49.

[37] A&P, supra at para. 37.

[38] Midas C.A., supra.

[39] A&P and Quiznos C.A., supra.

[40] A&P, supra.

[41] A&P and Quiznos C.A., supra.

[42] A&P, supra.

[43] Sears, supra.

[44] Quiznos CA., supra.

[45] Midas Certification, supra.

[46] A&P and Quiznos C.A., supra.

[47] Mayotte, supra.

[48] Cassano, supra.

[49] Quizno’s Div. Ct., supra.

[50] 909787 Ontario Limited v. Bulk Barn Foods Ltd. (2000), 2 C.P.C. (5th) 61 (Ont. Div. Ct.), rev’g (199), 90 A.C.W.S. (3d) 352 (Ont. S.C.J.) [Bulk Barn] (Osler, Hoskin & Harcourt LLP acted for Bulk Barn Food Ltd.).

[51] Id., at para. 5.

[52] Id., at para. 25.

[53] Sears, supra at para. 50.

[54] A&P, supra at paras. 37 and 52.

[55] Quizno’s Div. Ct., supra.

[56] In Caponi v. Canada Life Assurance Co. (2009), 72 C.P.C. (6th) 331 at para. 41 (Ont. S.C.J.), the Ontario Superior Court of Justice refused to allow the application of section 24(1) of the CPA. The plaintiff alleged that the defendant’s wind-up of a supplemental pension plan was a breach of contract. In holding that damages could not be calculated in the aggregate, M.C. Cullity J. stated: “I am not satisfied from the evidence that a determination of the aggregate liability to the Class members could be effected without calculating the loss suffered by each member. In consequence, it appears that the precondition to an aggregate assessment in section 24(1)(c) would not be satisfied.”

[57] 1176560 Ontario Ltd. v. Great Atlantic & Pacific Co. of Canada, [2003] O.J. No. 5703 at paras. 27-32 (S.C.J. Master).

[58] Hollick, supra at paras. 14-16.

[59] Id., at para. 28.

[60] A&P, supra at para. 45.

[61] Hollick, supra at para. 27.

[62] A&P, supra at paras. 51-58; Midas Certification, supra at paras. 80-82; Mont-Bleu Ford Inc. v. Ford Motor Co. of Canada (2004), 48 O.R. (3d) 753 (Div. Ct.) at para. 16; Quizno’s Div. Ct., supra at paras. 141-144; Quiznos C.A., supra at para. 62.

[63] Quizno’s C.A., supra at para. 62.

[64] Sears, supra at para. 68.

[65] Quizno’s Div. Ct., supra at para. 72.

[66] A&P, supra at para. 58.

[67] Western Canadian, supra at para. 41.

[68] A&P, supra at paras. 28 and 41.

[69] See, for example, the Sears decision, supra at paras. 90-92.

[70] See CPA, at s. 12.