Graham Buitenhuis

The appellants, representing a class of Ontario Shoppers Drug Mart franchisees, appealed a summary judgment decision regarding their entitlement to Professional Allowances paid by generic drug manufacturers.

The Court of Appeal upheld the motion judge's findings that Shoppers breached the 2002 franchise agreement by retaining the allowances, which constituted 'revenue', but did not breach the 2010 agreement, which explicitly allowed Shoppers to retain such concessions.

The Court also upheld the application of a rolling limitation period and the refusal to award aggregate damages due to the idiosyncratic nature of the profit-sharing model.

However, the Court allowed the appeal regarding the quantification of damages, finding that Shoppers breached its duty of good faith by arbitrarily allocating $129 million as out-of-province rebates to avoid sharing the funds with Ontario franchisees, bringing the total Professional Allowances received to $1.084 billion.

The plaintiffs, limited partners in three real estate development limited partnerships, sought declarations validating their special resolutions to remove and replace the original general partners.

The dispute arose after the original general partners issued capital calls to pay management fees to an affiliated company, which the plaintiffs argued were unauthorized.

The court found the capital calls were invalid as the management agreements were not approved by special resolution and the general partners failed to seek external financing first.

The court upheld the plaintiffs' special resolutions removing the original general partners due to multiple unremedied defaults, including failure to provide access to financial records, co-mingling of funds, and unauthorized related-party transactions.

The defendants' counterclaims were dismissed.

In this certified class action, the plaintiff franchisees (Associates) brought a motion for summary judgment against the franchisor, Shoppers Drug Mart, alleging breaches of contract, breaches of the duty of good faith, and unjust enrichment regarding various fees and the retention of Professional Allowances paid by generic drug manufacturers.

Shoppers brought a cross-motion for summary judgment to dismiss the claims, arguing they lacked merit and were statute-barred.

The court dismissed the claims regarding the Optimum Fee and Shoppers Charges, finding no breach of contract or bad faith.

The court also dismissed the unjust enrichment claim for Professional Allowances but found that Shoppers breached the 2002 Associates Agreement (but not the 2010 Agreement) by failing to remit Professional Allowances to the Associates.

The court held that aggregate damages were not viable and directed that the surviving breach of contract and distribution centre claims proceed to individual issues trials, subject to limitation periods.

The plaintiffs, limited partners and their newly appointed general partners, moved for an interlocutory injunction to restrain the former general partners and non-party project companies from dealing with real estate development properties pending a governance trial.

They also sought leave to issue a certificate of pending litigation and to amend their statement of claim.

The court dismissed the motion, finding that an interlocutory injunction could not be granted against the non-party project companies because the plaintiffs had not claimed a permanent injunction against them, nor had they provided an undertaking in damages.

The request for a certificate of pending litigation was also denied as the plaintiffs, being shareholders of the project companies, did not have a triable issue for a direct interest in the properties.

The Canadian Civil Liberties Association (CCLA) brought a motion for leave to intervene as a friend of the Court in an application challenging the constitutionality of amendments to the Election Finances Act.

The respondents opposed the intervention, arguing the CCLA would not provide a distinct perspective from the applicants.

The court granted the motion, finding that the CCLA's expertise in civil liberties and its broader policy perspective on the balance between free speech and fair elections would provide a useful and distinct contribution without causing prejudice or delaying the proceedings.