This appeal arises from the 2009 General Motors of Canada bailout and the termination of franchise dealerships.
The franchisor offered Wind-Down Agreements to 240 dealers, providing payment in exchange for comprehensive releases of all claims, including those under the Arthur Wishart Act.
The dealers were required to obtain independent legal advice before signing.
A class action was subsequently brought by terminated franchisees claiming breaches of statutory rights.
The trial judge found the releases valid under the Tutor Time exception to section 11 of the Wishart Act, as they constituted settlements of known and existing claims entered into with legal advice.
The trial judge also held that covenants not to sue and indemnity provisions were void for public policy reasons but were severable from the release.
The Court of Appeal upheld both the validity of the releases and the severance of the covenant not to sue.
