Court File and Parties

COURT FILE NO.: Divisional Court File 745/02

DATE: 2003-04-02

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: 117560 Ontario Limited, et al. Plaintiffs;

and

The Great Atlantic & Pacific Company of Canada, Limited, Defendant

Proceeding Under the Class Proceedings Act, 1992

HEARD: April 2, 2003

BEFORE: Lane, J.

COUNSEL: Jonathan Lisus and David Sterns, for the Plaintiffs, moving parties;

Joseph Steiner and Derek J. Bell, for the Defendant, responding.

REASONS FOR DECISION

[1] By reasons dated March 26, 2003, I granted leave to the defendant to appeal from two aspects of the Order of Winkler J. certifying this action as a Class Proceeding. The two points were whether the provisions of section 5 (1)(e)(i) and (iii) had been met. In all other respects, the motion was refused. The plaintiffs now move to expedite the hearing of the appeal. They have arranged with the Divisional Court Registrar to have it heard on May 2, next, for one day, if the court will order it expedited. The defendant opposes the making of such an order.

[2] In support of the order sought, the plaintiffs note that the issue is a narrow one, has already been argued twice, before Winkler J. and myself, and the record is crystallized. There should be no difficulty for counsel in arguing it for the third time one month from today.

[3] There are seven factors relied on by the plaintiffs to warrant expediting the appeal. 1. The case is governed by an expedited case management Plan approved by Winkler J. from which I have refused leave. The timetable of the Plan reflects the intention of the court that the whole action be dealt with on an expedited basis. 2.The plaintiffs were found by Winkler J. to be vulnerable to the defendant and the Plan reflects this. They are in a continuing relationship with the defendant as franchisees doing business daily. An expedited resolution of the action is in everyone’s interest. 3. The defendants are pressing rent increases on the franchisees. 4. The rebates in issue are crucial to the profitability of the plaintiffs. 5. The defendant is not prejudiced by delay because it receives the disputed rebates until the case is over. 6. The sales and profits of the defendant are increasing while those of the plaintiffs are decreasing. 7. The defendant is pressing a new Franchise Agreement on the franchisees which calls for a release of the claims in the action.

[4] In addition, the plaintiffs submitted that an analogy should be drawn with the practice in the Court of Appeal whose practice direction provides for expediting “Appeals that may delay the progress of an ongoing action”.

[5] The defendant put in evidence to dispute items 3, 6 and 7, maintaining that the rent arbitrations are due under the Agreement and are not being pressed for tactical reasons; that there are reasons in the marketplace for any adverse profit experiences which cannot be laid at the defendant’s feet; and that the new Franchise Agreement is not currently being offered to those franchisees who have not opted out of the class. The defendants also submitted that in view of the ‘prodigious’ amount of work required to prepare for the trial, the Plan was not likely to be met in any event. Therefore any benefit from expediting the appeal was illusory.

[6] The defendant also submitted that the appeal was not so narrow as the plaintiffs contend, for two reasons. The first was that there was no authority for the order allowing the appeal on two issues only. Once the leave court found the requisites for leave had been met, the appeal was on the whole case. No authority was cited for this proposition, indeed none was said to exist one way or the other on the point. In my experience as a Divisional Court judge, I have seen leave restricted to one or more points out of the whole many times as well as doing it myself when the occasion required. As a panel member, I have joined in refusing to hear arguments beyond those on which leave was specifically granted. In my view, such a power is a necessary and desirable part of the court’s power to control its own process in the interests of justice and efficient administration of the court.

[7] The second reason was that the points on which leave was granted are inextricably bound up with the whole issue of preferability, so that at least that larger issue was open. I do not think that these points cannot be addressed by themselves and the fallout from a finding one way or the other dealt with by the court. It seems to me that it will only be if Winkler J. is held to have been in error on one or both of the two points, that the panel will have to consider the impact of that finding upon the entire issue of preferability, but that is essentially a matter that the panel will need to address. I do not think that this possible problem is a reason to refuse to expedite the appeal.

[8] The defendant also submitted that the date of May 2 did not give time to prepare to argue this important point in the development of class proceedings law. The time periods in the Rules are there to govern the time for each step and they should prima facie be followed.

[9] In my opinion there are good grounds to expedite this appeal. It is desirable that the outstanding certification issues should be put to rest as soon as possible. There is a real potential for delaying the progress of the action unless the appeal is heard in a timely way. Although the Plan has been criticized by the defendant as much too optimistic, it was approved by the judge and is the tune to which the parties must march unless and until it is changed. Delay can only contribute to the vulnerability of these plaintiffs which the motion judge found to have been established. The evidence presented to me does not affect that finding.

[10] I therefore direct that the appeal be expedited. The dates of hearing will be June 26 and 27, 2003, being the first available two-day period. This accommodates Mr. Steiner’s concerns as to preparation time and time for the argument.

[11] Costs of today reserved to the panel hearing the appeal.

Lane J.

DATE: April 2, 2003