1250264 Ontario Inc. v. Pet Valu Canada Inc., (2016) 344 O.A.C. 222 (CA)

• Judge: Hoy, A.C.J.O., MacFarland and Lauwers, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: January 14, 2016
• Jurisdiction: Ontario
• Citations: (2016), 344 O.A.C. 222 (CA);2016 ONCA 24

1250264 Ont. v. Pet Valu Can. Inc. (2016), 344 O.A.C. 222 (CA)

MLB headnote and full text

Temp. Cite: [2016] O.A.C. TBEd. JA.014

1250264 Ontario Inc. (plaintiff/respondent/appellant by way of cross-appeal) v. Pet Valu Canada Inc. (defendant/appellant/respondent by way of cross-appeal)

(C59956; 2016 ONCA 24)

Indexed As: 1250264 Ontario Inc. v. Pet Valu Canada Inc.

Ontario Court of Appeal

Hoy, A.C.J.O., MacFarland and Lauwers, JJ.A.

January 14, 2016.

Summary:

The plaintiff was a former Pet Valu franchisee. The plaintiff brought an action against the franchisor, Pet Valu Canada Inc., alleging, inter alia, that Pet Valu had not shared volume rebates it received from suppliers with franchisees. The action was certified as a class action. The certification judge concluded that the only claim that was appropriate for certification was the plaintiff's claim in relation to the volume rebates (2011 ONSC 287). After a further hearing, the certification judge released reasons defining "Volume Rebates" and setting out seven common issues in relation to the volume rebates claim (2011 ONSC 1941). Pet Valu moved for summary judgment on the seven common issues.

The Ontario Superior Court granted judgment in favour of Pet Valu dismissing common issues 1-5 (2014 ONSC 6056). The motion judge invited the plaintiff to move to amend its statement of claim and add an eighth common issue dealing with Pet Valu's purchasing power. The plaintiff accepted that invitation and the motion judge deferred his decision on common issues 6 and 7 until the plaintiff's motion was heard. While the motion judge ultimately dismissed the plaintiff's motion to amend and add an eighth common issue on the ground of prejudice (2015 ONSC 29), he read additional language into common issue 6 as framed by the certification judge. Common issue 6 asked whether Pet Valu breached a duty at common law or under s. 3 of the Arthur Wishart Act (Franchise Disclosure) (AWA) to make disclosure regarding volume rebates to the franchisees. On the basis of the read-in language, the motion judge found that Pet Valu had breached its duty of fair dealing under s. 3 of the AWA, and answered common issues 6(i), (iii) and (iv) in favour of the plaintiff. Pet Valu appealed the motion judge's decision answering common issues 6(i), (iii) and (iv) in favour of the plaintiff. The plaintiff cross-appealed the dismissal of its motion to amend to add an eighth common issue.

The Ontario Court of Appeal allowed Pet Valu's appeal and found in favour of Pet Valu on common issues 6(i), (iii) and (iv). The motion judge, in effect, improperly amended common issue 6 and erred in concluding that Pet Valu breached s. 3 of the AWA. There was no need to answer common issue 7, which dealt with the damages Pet Valu would have been required to pay if the plaintiff had succeeded on common issue 6. In the result, the court dismissed the plaintiff's action against Pet Valu. The court dismissed the plaintiff's cross-appeal. The motion judge did not err in dismissing the plaintiff's motion to amend.

Franchises - Topic 2063

Franchise agreement - Duties of franchisor - To provide statement of material facts (disclosure) - [See Franchises - Topic 2067 ].

Franchises - Topic 2067

Franchise agreement - Duties of franchisor - Duty of good faith and fair dealing - The plaintiff was a former Pet Valu franchisee - The plaintiff brought an action against the franchisor, Pet Valu Canada Inc., alleging, inter alia, that Pet Valu had not shared volume rebates it received from suppliers with franchisees - The action was certified as a class action - The certification judge concluded that the only claim that was appropriate for certification was the plaintiff's claim in relation to the volume rebates - After a further hearing, the certification judge released reasons defining "Volume Rebates" and setting out seven common issues in relation to the volume rebates claim - Pet Valu moved for summary judgment on the seven common issues - The motion judge granted judgment in favour of Pet Valu dismissing common issues 1-5 - He invited the plaintiff to move to amend its statement of claim and add an eighth common issue dealing with Pet Valu's purchasing power - The plaintiff accepted that invitation and the motion judge deferred his decision on common issues 6 and 7 until the plaintiff's motion was heard - While the motion judge ultimately dismissed the plaintiff's motion to amend and add an eighth common issue on the ground of prejudice, he read language into the court-established wording of common issue 6 - Common issue 6 asked whether Pet Valu breached a duty at common law or under s. 3 of the Arthur Wishart Act (Franchise Disclosure) (AWA) to make disclosure regarding volume rebates to the franchisees - On the basis of the read-in language, the motion judge found that Pet Valu had breached its duty of fair dealing under s. 3 of the AWA, and answered common issues 6(i), (iii) and (iv) in favour of the plaintiff - Pet Valu appealed the motion judge's decision answering common issues 6(i), (iii) and (iv) in favour of the plaintiff - The plaintiff cross-appealed the dismissal of its motion to amend to add an eighth common issue - The Ontario Court of Appeal allowed Pet Valu's appeal and found in favour of Pet Valu on common issues 6(i), (iii) and (iv) - The motion judge, in effect, improperly amended common issue 6 and erred in concluding that Pet Valu breached s. 3 of the AWA - The court dismissed the plaintiff's cross-appeal - Allowing the plaintiff to amend its statement of claim and add an eighth common issue would have caused an injustice to Pet Valu not compensable in costs - See paragraphs 33 to 67.

Practice - Topic 210.1

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - General (incl. venue, discovery, etc.) - [See Franchises - Topic 2067 ].

Practice - Topic 2143

Pleadings - Amendment of - Circumstances when amendment denied - [See Franchises - Topic 2067 ].

Cases Noticed:

Bhasin v. Hrynew et al., [2014] 3 S.C.R. 494; 464 N.R. 254; 584 A.R. 6; 623 W.A.C. 6; 2014 SCC 71, refd to. [para. 31].

Salah et al. v. Timothy's Coffees of the World Inc. (2010), 268 O.A.C. 279; 2010 ONCA 673, refd to. [para. 32].

1159607 Ontario Inc. et al. v. Country Style Food Services Inc. et al., [2012] O.T.C. Uned. 881; 2 B.L.R.(5th) 315; 2012 ONSC 881 (Sup. Ct.), affd. [2013] O.A.C. Uned. 483; 2013 ONCA 589, refd to. [para. 32].

Burnett Management Inc. et al. v. Cuts Fitness for Men et al., [2012] O.T.C. Uned. 3358; 4 B.L.R.(5th) 234; 2012 ONSC 3358 (Sup. Ct.), refd to. [para. 32].

1323257 Ontario Ltd. v. Hyundai Auto Canada Corp., [2009] O.T.C. Uned. 13; 55 B.L.R.(4th) 265 (Sup. Ct.), refd to. [para. 32].

Spina et al. v. Shoppers Drug Mart Inc. et al., [2012] O.T.C. Uned. 5563; 2012 ONSC 5563 (Sup. Ct.), refd to. [para. 32].

Brown et al. v. Canada (Attorney General) (2013), 300 O.A.C. 290; 114 O.R.(3d) 355 2013 ONCA 18, refd to. [para. 35].

Keatley Surveying Ltd. v. Teranet Inc. (2015), 331 O.A.C. 324; 125 O.R.(3d) 447; 2015 ONCA 248, dist. [para. 35].

Labatt Brewing Co. et al. v. NHL Enterprises Canada, L.P. et al. (2011), 282 O.A.C. 151; 106 O.R.(3d) 677; 2011 ONCA 511, refd to. [para. 52].

Rodaro et al. v. Royal Bank of Canada et al. (2002), 157 O.A.C. 203; 59 O.R.(3d) 74 (C.A.), refd to. [para. 52].

Statutes Noticed:

Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3, sect. 3(1), sect. 3(3) [para. 27]; sect. 5, sect. 6, sect. 7 [para. 29].

Counsel:

Geoffrey B. Shaw, Derek Ronde and Eric Mayzel, for the appellant/respondent by way of cross-appeal;

Louis Sokolov and Jean-Marc Leclerc, for the respondent/appellant by way of cross-appeal.

This appeal and cross-appeal were heard on November 3 and 4, 2015, before Hoy, A.C.J.O., MacFarland and Lauwers, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Hoy, A.C.J.O., and was released on January 14, 2016.