David Sterns

In a certified franchise class action concerning alleged failure to share supplier rebates, the representative plaintiff sought to set aside opt-out notices after a franchisee group launched a campaign encouraging class members to opt out.

The campaign included a coordinated telephone blitz and a public website listing franchisees who opted out while disseminating misleading information about the litigation and class counsel.

The court found that the communications exerted pressure on franchisees and undermined the fairness and integrity of the opt-out process.

Concluding that the process had been subverted by misinformation and intimidation, the court exercised its supervisory authority under the Class Proceedings Act to invalidate opt-out notices submitted after the campaign began.

Following reasons dismissing most aspects of a motion to strike, the court determined the appropriate costs award.

The responding parties were largely successful on the motion, though one claim for unjust enrichment was struck with leave to amend.

The court applied Rule 57 of the Rules of Civil Procedure and the principles from Boucher regarding fair and reasonable costs.

While the successful parties sought substantial indemnity or partial indemnity costs exceeding $19,000, the court found those amounts excessive for a short motion and fixed costs at $11,000 inclusive of HST and disbursements.

A proposed intervener sought leave under Rule 13.01 of the Rules of Civil Procedure to intervene as an added party in a defendant’s pending motion for summary judgment in a civil action.

The proposed intervener was the representative plaintiff in a certified class proceeding involving overlapping factual allegations but different legal theories from the individual plaintiffs’ action.

Although the court found that common issues of fact existed between the proceedings, it concluded that the proposed intervener had no direct interest in the subject matter of the individual action and would not be adversely affected by its outcome.

The court further held that the proposed intervener would not provide a useful contribution to the determination of the summary judgment motion and that intervention would unnecessarily expand the scope of the motion and increase costs.

Leave to intervene was therefore denied.

In a Commercial List proceeding between franchisees and a franchisor, the defendant sought to schedule a post‑discovery partial summary judgment motion while the plaintiffs proposed proceeding directly to trial.

The court addressed the growing practice of lengthy summary judgment motions brought after discoveries and emphasized the need to consider proportionality, efficient use of judicial resources, and whether such motions would advance the interests of justice.

The court held that parties seeking to schedule lengthy post‑discovery summary judgment motions must demonstrate that the benefits outweigh the risk of added cost and delay if the motion fails.

Detailed information regarding the proposed motion, anticipated trial, and potential time savings must be provided to assist the court in making that determination.

The scheduling appointment was adjourned and directions were issued requiring the parties to file structured information before a further attendance.

The appellant franchisee operated a gas station under a one-year franchise agreement with the respondent franchisor.

The franchisee sought to rescind the agreement and claim a refund under the Arthur Wishart Act because the franchisor had not provided a disclosure document.

The franchisor successfully moved for summary judgment on the basis that it was exempt under s. 5(7)(g)(ii) of the Act, which applies to agreements valid for no longer than one year that do not involve a non-refundable franchise fee.

The Court of Appeal upheld the motion judge's finding that the agreement's one-year term and requirement to pay royalties, rather than a franchise fee, satisfied the exemption criteria.

The defendants moved for leave to appeal an order certifying a class action brought by the plaintiff franchisee.

The defendants challenged the certification of several common issues relating to GMCL's alleged breach of statutory duties and Cassels Brock & Blackwell LLP's alleged negligence and breach of contract.

The Divisional Court granted leave to appeal in part.

Leave was granted regarding the common issues of whether GMCL failed to disclose material facts and interfered with the right to associate, as these required individual inquiries.

Leave was also granted regarding the claims against the law firm, as there was conflicting authority on whether loss of chance requires proof that the plaintiff would have acted differently but for the breach.

Leave was denied for the remaining issues, and a request to stay the action against the law firm was refused.

The plaintiffs sought leave to appeal a cost award made by the motions judge following the certification of their class proceeding.

The plaintiffs argued the motions judge ignored established principles, such as costs following the event and the reasonable expectations of the unsuccessful party, and improperly applied the principle of access to justice to the defendants.

The Divisional Court found that the motions judge properly exercised his discretion, considering all relevant factors and principles, and that there was no conflicting decision.

The motion for leave to appeal was dismissed.

The respondents sought costs of $77,362 for the motion for leave to appeal, the motion to expedite the appeals, and the appeals.

The Court of Appeal noted that the arguments were similar to those advanced before the motion judge and the Divisional Court.

The Court fixed the respondents' costs on a partial indemnity scale at $45,000, inclusive of disbursements and taxes, payable by the appellants.

The appellant franchisor appealed an order declaring that provisions in its standard franchise agreement requiring franchisees to release the franchisor from liability as a condition of renewal or transfer were void and unenforceable.

The Court of Appeal dismissed the appeal, holding that such releases violate sections 4 and 11 of the Arthur Wishart Act by forcing franchisees to waive statutory rights and interfering with their right to associate in a class proceeding.

The Court also upheld the application of Ontario law to franchisees operating outside the province due to the agreement's choice of law clause.

The appellants, a restaurant franchisor and its food distributor, appealed a Divisional Court decision certifying a class action brought by former franchisees.

The franchisees alleged the appellants engaged in a price maintenance scheme, civil conspiracy, and breach of contract by charging exorbitant prices for supplies.

The Court of Appeal upheld the certification, finding that the motion judge erred by focusing too heavily on the individual nature of damages and failing to recognize that the breach of the Competition Act, conspiracy, and breach of contract claims constituted valid common issues.

The court also affirmed that aggregate damages provisions under the Class Proceedings Act could potentially be utilized at trial.

The appellant franchisees appealed the dismissal of their motion to certify a class proceeding against the respondent franchisor and distributors.

The appellants alleged price maintenance under the Competition Act, civil conspiracy, and breach of contract regarding mark-ups and sourcing fees for supplies.

The Divisional Court allowed the appeal, finding the motion judge erred in principle by focusing exclusively on the individualized nature of damages and failing to recognize that the breach of the Competition Act, breach of contract, and the fact of loss were common issues.

The Court conditionally certified the class action, concluding it was the preferable procedure to achieve judicial economy, access to justice, and behaviour modification.

The appellant landlord and its related corporate tenant appealed an order granting the respondent franchisor specific performance of an option to lease agreement.

The application judge found that the landlord and tenant acted in concert to frustrate the franchisor's attempt to enforce the option after the tenant terminated its franchise agreement.

The Court of Appeal dismissed the appeal, upholding the findings that the parties acted in concert, that the option agreement's true intent did not require the application of contra proferentem, and that the commercial premises possessed the requisite uniqueness to justify specific performance.

The defendant sought leave to appeal an order certifying a class action alleging vertical price-fixing conspiracies in the sale of engineering resins.

The plaintiff cross-appealed, seeking to expand the class definition to include Tier 1 manufacturers.

The Divisional Court dismissed both motions for leave to appeal, finding no conflicting decisions and no good reason to doubt the correctness of the motion judge's discretionary, fact-driven conclusions regarding the class definition and the common issues of loss and liability.

The appellants moved for directions to amend a previous order of the Court of Appeal to strike down a licensing fee provision in a municipal by-law.

The court had previously struck down provisions requiring the collection and transmission of personal information to police, rendering the fee issue moot.

The municipality subsequently re-enacted the fee under amended legislation.

The court dismissed the motion, finding it would serve no purpose to address the fee under the former statutory provisions.

The appellants challenged a municipal by-law requiring second-hand goods dealers to collect detailed personal information from vendors and transmit it electronically to the police daily.

The Court of Appeal held that while the by-law was validly enacted under the municipality's consumer protection powers, the impugned provisions conflicted with section 28(2) of the Municipal Freedom of Information and Protection of Privacy Act.

The municipality failed to demonstrate that the collection and transmission of such detailed personal information was necessary for the proper administration of the licensing scheme.

The appeal was allowed and the impugned provisions were declared of no force or effect.

The appellants appealed a summary judgment dismissing their action and allowing the respondent's counterclaim on a promissory note arising from a share purchase agreement.

The appellants had alleged unconscionability, economic duress, and oppression.

The Court of Appeal allowed the appeal, finding that the motion judge erred in law by deciding which competing inferences should be preferred from primary facts in evidence on a motion for summary judgment.

The court concluded there were genuine issues of material fact requiring a trial.

The defendant franchisor appealed an order certifying a class proceeding brought by franchisees regarding the distribution of rebates and allowances under a standard form franchise agreement.

The franchisor argued that the representative plaintiffs could not fairly and adequately represent the class and had a conflict of interest because they were not indebted to the franchisor, unlike other franchisees.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the motion judge's conclusion that the representative plaintiffs could fairly and adequately represent the class and that their lack of indebtedness did not create a conflict of interest on the common issues.

The plaintiffs brought a motion to expedite the hearing of the defendant's appeal from an order certifying the action as a class proceeding.

The defendant opposed the motion, arguing that the appeal involved complex issues and that the proposed timeline was too short.

The court found that there were good grounds to expedite the appeal to prevent delay in the ongoing action and to address the vulnerability of the plaintiff franchisees.

The motion was granted, and the appeal was scheduled for the first available two-day period.

The defendant franchisor moved for leave to appeal an order certifying a class proceeding brought by franchisees regarding the withholding of rebates.

The defendant argued that the proposed representative plaintiffs had a conflict of interest with other class members who had different economic arrangements with the franchisor and feared disruption of their businesses.

The court granted leave to appeal, finding that the issue of whether the representative plaintiffs could fairly and adequately represent the class without conflict was open to serious debate and of general importance to the development of class action law.

The franchisor of a shoe repair business went bankrupt, and its assets were purchased by the appellant.

The respondent franchisees sought to assume direct tenancies with their respective landlords under s. 39(2) of the Commercial Tenancies Act.

The appellant argued that the landlords had not consented to the subleases 'in writing' as required by the Act.

The Court of Appeal held that the landlord's approval need not be in writing and can be implied by conduct.

The Court also dismissed the franchisees' cross-appeal, finding no fundamental breach of the franchise agreements by the franchisor.