Goji's Franchising Corp. v. McCabe et al., 2014 NBQB 163

Judge:Rideout, J.
Court:Court of Queen's Bench of New Brunswick
Case Date:June 17, 2014
Jurisdiction:New Brunswick
Citations:2014 NBQB 163;(2014), 423 N.B.R.(2d) 46 (TD)
 
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Goji's Franchising Corp. v. McCabe (2014), 423 N.B.R.(2d) 46 (TD);

  423 R.N.-B.(2e) 46; 1103 A.P.R. 46

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Temp. Cite: [2014] N.B.R.(2d) TBEd. JL.030

Renvoi temp.: [2014] N.B.R.(2d) TBEd. JL.030

Goji's Franchising Corporation, a body corporate (plaintiff/defendant by counter-claim) v. Chris McCabe (defendant/plaintiff by counter-claim) and Compass Yogurt LLC, a body corporate (defendant) and Isabelle Weststrate, Arlan Westsrate, Carol Wirsz, Robert Wirsz, Jeffrey Zacharias, Janette Zacharias and Thomas Ostoich (defendants by counter-claim)

(MC-123-14; 2014 NBQB 163; 2014 NBBR 163)

Indexed As: Goji's Franchising Corp. v. McCabe et al.

Répertorié: Goji's Franchising Corp. v. McCabe et al.

New Brunswick Court of Queen's Bench

Trial Division

Judicial District of Moncton

Rideout, J.

June 26, 2014.

Summary:

Résumé:

Goji's Frozen Yogurt Café Ltd. wished to expand its business operations through the grant of unit franchises in Canada. It retained a law firm, McKenzie Lake, to incorporate a company (Goji's Franchising Corporation), prepare a franchise agreement, and prepare a trademark application. McCabe became a shareholder of Goji's Franchising Corporation. Subsequently, Goji's Franchising Corporation commenced an action against McCabe, alleging that he engaged in misconduct that caused it to suffer losses. McCabe moved for an order restraining McKenzie Lake from acting on behalf of Goji's Franchising Corporation.

The New Brunswick Court of Queen's Bench, Trial Division, dismissed the motion.

Barristers and Solicitors - Topic 1504

Relationship with client - General - Solicitor-client relationship - What constitutes - Goji's Frozen Yogurt Café Ltd. wished to expand its business operations through the grant of unit franchises - It retained a law firm, McKenzie Lake (ML), to incorporate a company (the plaintiff Goji's Franchising Corporation), prepare a franchise agreement, and prepare a trademark application - McCabe became a shareholder of the plaintiff - Subsequently, the plaintiff commenced an action against McCabe, alleging that he engaged in misconduct that caused it to suffer losses - McCabe moved for an order restraining ML from acting on behalf of the plaintiff due to a conflict of interest, and also because members of ML would be called upon to give evidence at trial - The New Brunswick Court of Queen's Bench, Trial Division, dismissed the motion - A solicitor-client relationship did not exist between McCabe and ML - Only Goji's Frozen Yogurt Café Ltd. signed a retainer letter with ML - Advice that McCabe received from ML (respecting whether he had to disclose a prior bankruptcy) was simply an explanation as to the disclosure requirements for the franchising corporation - It was unclear whether any lawyer from ML would be required to testify - As the matter had just commenced, it was premature for the court to make such a ruling.

Barristers and Solicitors - Topic 1613

Relationship with client - Conflict of interest or duties - Conduct of action against director, shareholder, etc. of corporate client - [See Barristers and Solicitors - Topic 1504 ].

Barristers and Solicitors - Topic 1616.1

Relationship with client - Conflict of interest or duties - Where lawyer or lawyer's employee potential witness - [See Barristers and Solicitors - Topic 1504 ].

Barristers and Solicitors - Topic 1617

Relationship with client - Conflict of interest or duties - Situations not resulting in a conflict - [See Barristers and Solicitors - Topic 1504 ].

Avocats et notaires - Cote 1504

Rapport avec le client - Généralités - Rapport avocat-client - Éléments constitutifs - [Voir Barristers and Solicitors - Topic 1504 ].

Avocats et notaires - Cote 1613

Rapports avec le client - Conflit d'intérêts - Conduite d'une action contre un administrateur, un actionnaire, etc. d'un client corporatif - [Voir Barristers and Solicitors - Topic 1613 ].

Avocats et notaires - Cote 1616.1

Rapports avec le client - Conflit d'intérêts - Cas où l'avocat est un témoin potentiel - [Voir Barristers and Solicitors - Topic 1616.1 ].

Avocats et notaires - Cote 1617

Rapports avec le client - Conflit d'intérêts ou devoirs - Situations n'engendrant pas de conflit - [Voir Barristers and Solicitors - Topic 1617 ].

Cases Noticed:

MacDonald Estate v. Martin and Rossmere Holding (1970) Ltd., [1990] 3 S.C.R. 1235; 121 N.R. 1; 70 Man.R.(2d) 241, refd to. [para. 10].

Canadian National Railway Co. v. McKercher LLP - see/voir Wallace v. Canadian Pacific Railway et al.

Wallace v. Canadian Pacific Railway et al., [2013] 2 S.C.R. 649; 446 N.R. 1; 423 Sask.R. 1; 588 W.A.C. 1; 2013 SCC 39, refd to. [para. 10].

Caisse Populaire Beauséjour ltée v. Wry et al. (2011), 372 N.B.R.(2d) 326; 961 A.P.R. 326; 2011 CarswellNB 688; 2011 NBQB 115, refd to. [para. 15].

Essa (Township) v. Guergis, 1993 CarswellOnt 473 (Gen. Div.), refd to. [para. 19].

LeBlanc v. Allain et al. (2003), 261 N.B.R.(2d) 227; 685 A.P.R. 227 (T.D.), refd to. [para. 19].

Counsel:

Avocats:

Sean Flaherty, for Goji's Franchising Corp.;

Michel C. Poirier, for Chris McCabe and Compass Yogurt LLC;

James Fowler, for Goji's Frozen Yogurt Café Ltd., Isabelle Weststrate, Arlan Weststrate, Carol Wirsz, Robert Wirsz, Jeffrey Zacharias, and Janette Zacharias.

This motion was heard on June 17, 2014, before Rideout, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Moncton, who delivered the following decision on June 26, 2014.

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