1250264 Ontario Inc. v. Pet Valu Canada Inc., 2013 ONCA 279

• Judge: Winkler, C.J.O., Armstrong and Hoy, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: February 26, 2013
• Jurisdiction: Ontario
• Citations: 2013 ONCA 279;(2013), 305 O.A.C. 329 (CA)

1250264 Ont. v. Pet Valu Can. Inc. (2013), 305 O.A.C. 329 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. MY.008

1250264 Ontario Inc. (plaintiff/respondent) v. Pet Valu Canada Inc. (defendant/appellant)

(C55949; 2013 ONCA 279)

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

Ontario Court of Appeal

Winkler, C.J.O., Armstrong and Hoy, JJ.A.

May 3, 2013.

Summary:

A class proceeding was certified respecting an action on behalf of franchisees against a franchisor, Pet Valu Canada Inc. Towards the end of the opt-out period, a group of Pet Valu franchisees who opposed the class action and who called themselves "Concerned Pet Valu Franchisees" (CPVF) waged a concerted campaign to try to persuade class members to opt out. After the CPVF's campaign began, the number of returned opt-out notices increased dramatically. By the end of the opt-out period, more than half of the class had submitted opt-out notices. A considerable time after the opt-out period ended, the principal of the representative plaintiff, 1250264 Ontario Inc., moved for an order setting aside the received opt-out notices.

The Ontario Superior Court, in a decision reported [2012] O.T.C. Uned. 4317, granted the motion in part and invalidated any opt-out notices received on or after the beginning of the CPVF's opt-out campaign. The court provided for a new opt-out period to take place after the final disposition of the action on its merits. Pet Valu and 12 non-party franchisees who were members of the CPVF appealed.

The Ontario Court of Appeal allowed the appeal and set aside the order invalidating the opt-out notices.

Practice - Topic 209.8

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Notice to members of class (incl. opt-out process) - A representative plaintiff sought to set aside opt-out notices in a class action on behalf of franchisees against a franchisor, Pet Valu Canada Inc., claiming that a campaign by Concerned Pet Valu Franchisees (CPVF) caused many class members to opt-out - A motions judge, concluding that the opt-out campaign was coercive, set aside any opt-out notices received on or after the beginning of the campaign and deferred the opt-out period until after the final determination of the case on its merits - Pet Valu and 12 CPVF franchisees appealed - The Ontario Court of Appeal allowed the appeal and set aside the order invalidating the opt-out notices - The motions judge erred in drawing the inference that CPVF's campaign was coercive in the absence of any direct evidence - The motions judge also erred in holding CPVF to a standard of objectivity with respect to its campaign in the circumstances.

Practice - Topic 209.8

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Notice to members of class (incl. opt-out process) - The Ontario Court of Appeal stated that the Class Proceedings Act (CPA) "... does not contemplate the politicization of the opt-out process. The opt-out process is not analogous to the labour context where majority support or opposition is required to certify or decertify a union. Within the statutory framework of the CPA, there is no legitimate purpose that can be achieved by politicizing the opt-out process ... certification motions are not determined through a referendum of the class members. Nor is the viability of the class action dependant on majority support. Just as the percentage of support amongst class members is not an element of certification, opting out cannot stop a class action. The number of opt-outs does not in itself provide a basis for decertifying a class action" - See paragraph 51.

Cases Noticed:

Fantl v. Transamerica Life Canada (2009), 249 O.A.C. 58; 95 O.R.(3d) 767; 2009 ONCA 377, refd to. [para. 40].

Aventis Pharma S.A. et al. v. Novopharm Ltd., [2005] N.R. Uned. 155; 44 C.P.R.(4th) 326; 2005 FCA 390, refd to. [para. 40].

1176560 Ontario Ltd. et al. v. Great Atlantic & Pacific Co. of Canada Ltd., [2002] O.T.C. 963; 62 O.R.(3d) 535 (Sup. Ct.), affd. (2004), 184 O.A.C. 298; 70 O.R.(3d) 182 (Div. Ct.), dist. [para. 41].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 69].

Fairview Donut Inc. et al. v. TDL Group Corp. et al. [2008] O.T.C. Uned. O49, refd to. [para. 74].

Statutes Noticed:

Class Proceedings Act, S.O. 1992, c. 6, sect. 12 [para. 40].

Counsel:

Geoffrey B. Shaw and Derek Ronde, for the appellant, Pet Valu Canada Inc.;

Lawrence G. Theall and Bevan Brooksbank, for the appellant, franchisees;

David Sterns and Jean-Marc Leclerc, for the respondent.

This appeal was heard on February 26, 2013, before Winkler, C.J.O., Armstrong and Hoy, JJ.A., of the Ontario Court of Appeal. The following decision was released for the court by Winkler, C.J.O., on May 3, 2013.