Bagai et al. v. Sure Corp. et al.

• Jurisdiction: Alberta
• Court: Court of Queen's Bench of Alberta (Canada)
• Judge: Rawlins, J.
• Citation: (2000), 275 A.R. 370 (QB)
• Date: 27 September 2000
• Subject Matter: PRACTICE,FRAUD AND MISREPRESENTATION,FRANCHISES,DAMAGE AWARDS

Bagai v. Sure Corp. (2000), 275 A.R. 370 (QB)

MLB headnote and full text

Temp. Cite: [2000] A.R. TBEd. OC.062

Mahinder Bagai and Veena Bagai, and Mahinder Bagai and Veena Bagai operating as Sure Print & Copy Centre and the said Sure Print & Copy Centre (plaintiffs) v. The Sure Corporation, Sure Prairies Corporation and Sure Graphics Limited (defendants)

(Action No. 9701-17019)

Indexed As: Bagai et al. v. Sure Corp. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Rawlins, J.

September 27, 2000.

Summary:

Franchisees sued franchisors for damages for negligent misrepresentation and breach of contract. They claimed that they were in­duced to enter a franchise agreement due to negligent misrepresentations as to potential financial benefits and that the franchisors had breached their contractual obligations to provide adequate training and support.

The Alberta Court of Queen's Bench held that the franchisors were liable for negligent misrepresentation and awarded $76,500. There was no breach of contract. The court also awarded $2,000 punitive damages given the conduct of the self-represented fran­chisor, who had attacked the honesty and integrity of opposing counsel in an inflam­matory letter.

Damage Awards - Topic 766

Torts - Fraud and misrepresentation - Negligent misrepresentation - Franchisees sued franchisors for damages for negligent misrepresentation and breach of contract - They claimed that they were induced to enter a franchise agreement due to negli­gent misrepresentations respecting potential financial benefits and that the franchisors had breached their contractual obligations to provide adequate training and support - The Alberta Court of Queen's Bench held that the franchisors were liable for negli­gent misrepresentation - Inaccurate, mis­leading and untrue projections were pro­vided to induce the franchisees to purchase the franchise - The court, having con­sidered that the franchisees were partially responsible for their loss, awarded $76,500 - There was no breach of contract - See paragraphs 17 to 28.

Damage Awards - Topic 2027.1

Exemplary or punitive damages - Un­conscionable conduct - A self-represented defendant attacked the honesty and in­tegrity of the plaintiffs' counsel in an inflammatory letter - The Alberta Court of Queen's Bench held that self-represented litigants must act according to the same rules as counsel and with the same level of respect and courtesy - The defendant's attack on opposing counsel had no merit and offended the court's sense of decency - The court therefore ordered the defendant to pay $2,000 in punitive damages to the plaintiffs - See paragraphs 29 to 31.

Franchises - Topic 2022

Franchise agreement - Breach of agreement - What constitutes - [See Damage Awards - Topic 766 ].

Fraud and Misrepresentation - Topic 2508

Misrepresentation - General principles - Negligent misrepresentation - [See Dam­age Awards - Topic 766 ].

Fraud and Misrepresentation - Topic 2824

Misrepresentation - Defences - Agreement excluding liability - Franchisees sued franchisors, asserting that they were in­duced to enter a franchise agreement due to negligent representations made by the franchisors regarding potential financial benefits - The franchisors asserted that an exclusionary clause precluded any reliance on any representation or warranty made prior to entering the contract - The Alberta Court of Queen's Bench held that the franchisors could not rely on the clause - There was no consideration by either the franchisees or franchisor on the clause and it was part of a standard form contract - Accordingly, the more specific representa­tion (i.e., the representations regarding financial benefits) prevailed - See para­graphs 27 and 28.

Practice - Topic 33

Actions - Conduct of - General - Party self-representation - General - [See Dam­age Awards - Topic 2027.1 ].

Cases Noticed:

Marble Mountain Enterprises Ltd. v. Gil­lies (1990), 105 A.R. 321 (Q.B.), refd to. [para. 1].

Pepsi-Cola Canada Inc. and Pizza Hut Inc. v. P.M. Foods Ltd. et al. (1985), 61 A.R. 340; 6 C.P.R.(3d) 330 (Q.B.), refd to. [para. 1].

P.M. Foods Ltd. et al. v. Pizza Hut Inc. et al. - see Pepsi-Cola Canada Inc. and Pizza Hut Inc. v. P.M. Foods Ltd. et al.

Perfect Portions Holding Co. v. New Fu­tures Ltd., [1995] O.J. No. 2113 (Gen. Div.), refd to. [para. 1].

Zippy Print Enterprises Ltd. v. Pawliuk, [1995] 3 W.W.R. 324; 100 B.C.L.R.(2d) 55; 20 B.L.R.(2d) 170) (C.A.), refd to. [para. 1].

Traversy v. Chia Chia Communications Inc. (1999), 241 A.R. 198 (Q.B. Master), refd to. [para. 1].

Saskatchewan Wheat Pool v. Canada, [1983] 1 S.C.R. 205; 45 N.R. 425, refd to. [para. 1].

Colborne Capital Corp. et al. v. 542775 Alberta Ltd. et al. (1999), 228 A.R. 201; 188 W.A.C. 201 (C.A.), refd to. [para. 1].

Kosmopoulos et al. v. Constitution In­surance Co. of Canada et al., [1987] 1 S.C.R. 2; 74 N.R. 360; 21 O.A.C. 4, refd to. [para. 1].

Phillips v. 707739 Alberta Ltd. et al. (2000), 259 A.R. 201 (Q.B.), refd to. [para. 1].

King Solomon's Gold Mine (Jewellery) Ltd. et al. v. CEC Leaseholds Inc. et al. (1995), 166 A.R. 81 (Q.B.), refd to. [para. 1].

L.K. Oil & Gas Ltd. and XL Food Sys­tems Ltd. v. Canalands Energy Corp. (1989), 98 A.R. 161; 68 Alta. L.R.(2d) 269 (C.A.), refd to. [para. 1].

447927 Ontario Inc. v. Pizza Pizza Ltd. (1987), 44 D.L.R.(4th) 366 (Ont. H.C.), refd to. [para. 1].

Emerald Resources Ltd. v. Sterling Oil Properties Management Ltd. (1969), 3 D.L.R.(3d) 630 (Alta. C.A.), refd to. [para. 1].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, refd to. [para. 17].

Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465; [1963] 2 All E.R. 575 (H.L.), refd to. [para. 20].

Hill v. Church of Scientology of Toronto and Manning, [1995] 2 S.C.R. 1130; 184 N.R. 1; 84 O.A.C. 1, refd to. [para. 29].

Counsel:

I.J. Derer and D.G. Kelly, for the plain­tiffs;

K. Jivraj, for the defendants.

This action was heard on September 5-14, 2000, before Rawlins, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judg­ment on September 27, 2000.