1279022 Ontario Ltd. et al. v. Posen et al.

• Jurisdiction: Manitoba
• Court: Court of Queen's Bench of Manitoba (Canada)
• Citation: (2003), 172 Man.R.(2d) 169 (QBM),2003 MBQB 73
• Date: 27 March 2003
• Subject Matter: FRANCHISES,PRACTICE,CONFLICT OF LAWS

1279022 Ont. Ltd. v. Posen (2003), 172 Man.R.(2d) 169 (QBM)

MLB headnote and full text

Temp. Cite: [2003] Man.R.(2d) TBEd. AP.014

1279022 Ontario Limited, 711636 Alberta Ltd., 3107167 Manitoba Ltd., 2996848 Manitoba Ltd., 1231475 Ontario Inc., Michael Floch, carrying on business as MSN Ventures, Debholdco Inc., 555380 B.C. Ltd., 512211 B.C. Ltd., 740462 Alberta Ltd., 1329759 Ontario Limited, 1357598 Ontario Inc., 620103 Saskatchewan Ltd., 510616 B.C. Ltd., John Malcolm McLeod and Jennifer McLeod, 733534 Alberta Ltd., R & V Enterprises Ltd., 1432632 Ontario Inc., 4098367 Manitoba Inc., 724225 Alberta Ltd., Donald Parry and Karen Parry, 624768 B.C. Ltd., 101015707 Saskatchewan Ltd., 585410 B.C. Ltd., Rush Holdings Inc., 4420845 Manitoba Ltd., 624813 Saskatchewan Ltd., 524194 B.C. Ltd., 526540 B.C. Ltd., 1356660 Ontario Ltd., 839676 Alberta Ltd., Govinda's International Inc. and Shree Krishna International Inc. (plaintiffs) v. Ethan Posen, 2909333 Manitoba Ltd. and 703822 Alberta Ltd. (defendants)

(CI 01-02-27930; 2003 MBQB 73)

Indexed As: 1279022 Ontario Ltd. et al. v. Posen et al.

Manitoba Court of Queen's Bench

Winnipeg Centre

Harrison, Master

March 27, 2003.

Summary:

The defendant 703822 Alberta Ltd. entered into franchise agreements with franchisees in Alberta. The defendant 2909333 Manitoba Ltd. entered into franchise agreements with franchisees in Manitoba, Ontario, Saskatchewan and British Columbia. Thirty-three franchisees brought one common action against the defendant companies and their president. The defendants brought a motion seeking relief against the joinder of the multiple plaintiffs and requesting that the plaintiffs' claims be severed from one another. The defendants also raised the issue of whether the plaintiffs from Alberta had a real and substantial connection with the jurisdiction of Manitoba and whether Manitoba was the forum conveniens for determining the claims of the Alberta plaintiffs.

A Master of the Manitoba Court of Queen's Bench held that the defendants had not established that Alberta was a more appropriate forum. With respect to the issue of severance of the claims, the Master directed counsel to obtain a full day case management conference on the action.

Conflict of Laws - Topic 721

Jurisdiction - Jurisdiction excluded by contract - General - The defendant 703822 Alberta Ltd. entered into franchise agreements with franchisees in Alberta - The defendant 2909333 Manitoba Ltd. entered into franchise agreements with franchisees in Manitoba, Ontario, Saskatchewan and British Columbia - The Alberta franchise agreements provided that they were to be governed by Alberta law and that if there was any dispute between the parties "they shall attorn to the jurisdiction" of the Alberta courts - Thirty-three franchisees brought one common action against the defendant companies and their president - The defendants argued that Manitoba was not the appropriate forum and that the Alberta actions should not be heard in that jurisdiction - A Master of the Manitoba Court of Queen's Bench held that the defendants had not established that Alberta was a more appropriate forum - There was a real and substantial connection with Manitoba - The choice of law as agreed to by the Alberta parties was but one factor to be considered and it was not clear that they had any real choice where the Alberta Franchises Act provided that the law of Alberta applied to franchise agreements - The "jurisdictional" clause in the Alberta franchise agreements did not exclude the jurisdiction of the Manitoba courts - See paragraphs 16 to 33.

Conflict of Laws - Topic 1664

Actions - General - Forum conveniens - Considerations - [See Conflict of Laws - Topic 721 ].

Conflict of Laws - Topic 7230

Contracts - Choice of law - By parties - [See Conflict of Laws - Topic 721 ].

Conflict of Laws - Topic 7281

Contracts - Jurisdiction - General - Section 17 of the Alberta Franchises Act provided that "Any provision in a franchise agreement restricting the application of the law of Alberta or restricting jurisdiction or venue to any forum outside Alberta is void with respect to a claim otherwise enforceable under this Act in Alberta" - A Master of the Manitoba Court of Queen's Bench held that s. 17 could not be interpreted to mean that an Alberta franchisee could never take their dispute for hearing in another province - See paragraphs 30 to 31.

Conflict of Laws - Topic 7284

Contracts - Jurisdiction - Forum conveniens - [See Conflict of Laws - Topic 721 ].

Conflict of Laws - Topic 7286

Contracts - Jurisdiction - Choice of forum by parties - [See Conflict of Laws - Topic 721 ].

Franchises - Topic 2046

Franchise agreement - Terms - Jurisdiction re disputes - [See Conflict of Laws - Topic 7281 ].

Practice - Topic 37

Actions - Conduct of - General - Case management - Thirty-three franchisees brought one common action against the defendant franchisors - The defendants sought relief against the joinder of the multiple plaintiffs and requested that the plaintiffs' claims be severed from one another - A Master of the Manitoba Court of Queen's Bench concluded that case management was a step taken to deal with situations such as in this case - The Master was confident that a justice could structure a series of independent actions from the matter into workable sectors retaining the most convenient administration of justice while sparing the defendants from the present morass of plaintiffs - Counsel were directed to obtain a full day case management conference on the action - See paragraphs 39 to 42.

Practice - Topic 209.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Certification - Considerations (incl. when class action appropriate) - Thirty-three franchisees brought one common action against the defendant franchisors - A Master of the Manitoba Court of Queen's Bench held that the action did not meet the conditions to be considered a class action - While some of the plaintiffs might ultimately be successful, their success would not of necessity be mirrored in a common beneficial result for all plaintiffs - While many aspects of the case had a common foundation, the variety of alleged representations, franchise agreements, commercial corporate vehicles and locations rendered the applicability of a class action impractical - Each of the plaintiffs had their own individual, vested, monetary self interest, which they would be individually propounding - The only common elements appeared to be the defendants - There was also no allegation in the claim that the present plaintiffs were purporting to represent other unnamed persons or corporations - See paragraphs 12 to 15.

Practice - Topic 3981

Joinder of causes and consolidations - Joinder of causes of action - General - [See Practice - Topic 37 ].

Cases Noticed:

Western Canadian Shopping Centres Inc. et al. v. Dutton et al., [2001] 2 S.C.R. 534; 272 N.R. 135; 286 A.R. 201; 253 W.A.C. 201, refd to. [para. 13].

1176560 Ontario Ltd et al. v. Great Atlantic & Pacific Co. of Canada Ltd., [2002] O.T.C. 963 (Sup. Ct.), refd to. [para. 14].

Craig Broadcast Systems Inc. v. Magid (Frank N.) Associates Inc. (1998), 123 Man.R.(2d) 252; 159 W.A.C. 252; 155 D.L.R.(4th) 356 (C.A.), refd to. [para. 18].

Antares Shipping Corp. v. Ship Capricorn et al., [1977] 2 S.C.R. 422; 7 N.R. 518; 65 D.L.R.(3d) 105, refd to. [para. 20].

Progressive Holdings Inc. v. Crown Life Insurance Co. et al. (2000), 147 Man.R.(2d) 175 (Q.B.), refd to. [para. 26].

Van Vogt v. All-Canadian Group Distributors Ltd., [1969] 9 D.L.R.(3d) 407 (Man. C.A.), refd to. [para. 32].

Statutes Noticed:

Franchises Act, R.S.A. 2000, c. F-23, sect. 17 [para. 30].

Counsel:

Gavin M. Wood, for the plaintiffs;

Terry A. Gutkin and Michelle Pollock-Kohn, for the defendants.

These motions were heard before Harrison, Master, of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following decision on March 27, 2003.