We Serve Health Care LP v. Onasanya, 2019 ONSC 355

CITATION: We Serve Health Care LP v. Onasanya, 2019 ONSC 355

DIVISIONAL COURT FILE NO.: 228/18

DATE: 20190114

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: WE SERVE HEALTH CARE LP, Appellant

AND:

ADEBUNMI ONASANYA, and IRE-OLUWA HEALTH SERVICES INC., Respondents

BEFORE: MARROCCO A.C.J.S.C.

COUNSEL: Daniel Hamson, for the Appellant

Anisah Hassan, for the Respondent

HEARD at TORONTO: DECEMBER 10, 2018

ENDORSEMENT

[1] The Appellant, We Serve Health Care LP, filed an application seeking:

• a declaration that its franchise agreement with the Respondents had expired; and
• a mandatory order that the Respondents comply with their post expiry obligations under that franchise agreement; or in the alternative
• a declaration that the franchise agreement was terminated by the delivery of a Notice of Termination; and
• a mandatory order that the Respondents comply with their post termination obligations under the franchise agreement.

[2] The Respondents successfully moved for a stay of the application before the Master.

[3] The Master determined that Ontario did not have jurisdiction over the subject matter of the application. Alternatively, the Master concluded that even if Ontario had jurisdiction over the subject matter of the application, the Ontario Superior Court of Justice should not exercise its jurisdiction because Saskatchewan was the more appropriate forum to fairly and efficiently dispose of the application.

[4] The Appellant appeals this final order of the Master to the Divisional Court pursuant to section 19(1)(c) of the Courts of Justice Act.

[5] The standard of review in an appeal from the order of a Master is the same as that for an appeal from an order of a judge: correctness for an error of law, palpable and overriding error for an error of fact, and correctness or palpable and overriding error for a question of mixed fact and law, depending on whether there is an extricable legal principle (Zeitoun v. Economical Insurance Group 2009 ONCA 415 at para. 1; Wellwood v. Ontario (Provincial Police), 2010 ONCA 386 at para. 28).

[6] The facts are not contentious.

[7] The Appellant, We Serve Health Care LP, is the franchisor of We Care Home Health Services which is a system of home healthcare service providers. In 2006, the Respondents, Adebunmi Onasanya and Ire-Oluwa Health Services Inc., agreed to buy an existing franchise from a home healthcare provider franchisee located in Regina Saskatchewan.

[8] Transfer of the franchise to the Respondents was provided for in the Franchise Agreement in Part 16. According to this Part, the transfer required among other things the prior written approval of the Appellant.

[9] In a letter dated August 30, 2006 counsel for the Appellant set out the conditions which must be met before the Appellant would provide written approval of the transfer. In addition, counsel for the Appellant sent copies of some of the documents that the Respondents had to sign before it would approve the transfer of the existing franchise. One of these documents was a new Franchise Agreement between the Appellant and the Respondents. In addition, counsel for the Appellant required the Respondents to obtain and provide certain documents.

[10] Counsel’s August 30, 2006 letter concluded with the following statement:

“Upon receipt of all of the of all copies of the enclosed documents, properly executed and witnessed, together with the additional items requested and set out above, we will then arrange for signature by our client of all of the documentation and will forward to each of you, two original copies of each fully executed document relating to each of your clients. The transfer of the franchise is dependent on all of the above being complied with in a timely manner.” [Emphasis in original]

[11] The Respondents properly signed the documentation forwarded by counsel for the Appellant and obtained the requested additional documents. The Respondents sent all of the documentation to the Appellant’s counsel. The Appellant then signed the documents and approved the transfer.

[12] The new Franchise Agreement was renewed in 2012 for five years which meant it was again up for renewal in 2017.

[13] The events with which we are concerned centre on the purported 2017 renewal.

[14] In 2013 CBI Limited acquired the franchisor. On two occasions CBI Limited unsuccessfully offered to buy the Respondents’ franchise because one of the business objectives of CBI Limited was to buy back existing franchises and operate them for CBI Limited’s benefit.

[15] In May 2016 the Appellant completed a performance audit identifying breaches of the Franchise Agreement. In March 2017 the Appellant set out in writing what it said were numerous breaches of the Franchise Agreement. These breaches related to nonpayment, non-reporting, as well as operational breaches derived from the complaints of Providence Place which received home healthcare services from the Respondents for individuals in its care.

[16] In June 2017 the Appellant conducted a field audit of the Respondents’ operations. The Appellant maintains that the audit disclosed serious, ongoing breaches of the Respondent’s obligations under the Franchise Agreement.

[17] The Appellant then refused to renew the agreement.

[18] If the franchise agreement was not renewed, it expired on July 21, 2017.

[19] On July 18, 2017 the Appellant filed the application with which is the subject matter of this appeal. On July 19, 2017 the Respondents commenced proceedings in the Saskatchewan Court of Queen’s Bench seeking a declaration that the Franchise Agreement be renewed, an interim injunction preventing the Appellant from terminating the agreement, and damages.

[20] On July 20 both parties appeared before Justice Layh of the Saskatchewan Court of Queen’s Bench on the Respondents’ injunction application in the Saskatchewan action. Justice Layh noted the parties had filed competing proceedings and unable to agree on which jurisdiction was appropriate. Justice Layh suggested to the parties that the Ontario Superior should be the first to express a view on the appropriate jurisdiction to resolve their dispute.

[21] The Appellant then delivered a Notice of Termination of the Franchise Agreement dated July 26, 2017.

The Master correctly decided that if Ontario has jurisdiction it should decline in favour of Saskatchewan

[22] I will first consider the Master’s conclusion that, even if Ontario had jurisdiction over the subject matter of the application, it should decline to exercise it in favour of Saskatchewan, i.e. that Ontario was a forum non conveniens.

[23] The party bringing an application can choose the forum which will hear the application. In this case the applicant chose Ontario. Accordingly, before the Master, the Respondents Adebunmi Onasanya and Ire-Oluwa Health Services Inc., had the burden of showing why the court should displace the forum chosen by the applicant in favour of Saskatchewan. Specifically, the Respondents had to show that Saskatchewan was a clearly more appropriate forum. The Master’s exercise of discretion is entitled to deference, absent an error of law or a clear and serious error in the determination of relevant facts. See Club Resorts Ltd. v. Van Breda, [2012] 1 SCR 572, 2012 SCC 17 at paras.103, 108 & 112.

[24] The Appellants maintain that the Master relied on information not in evidence to erroneously conclude that Saskatchewan is a clearly more appropriate forum. Specifically, the Master found that We Serve Health Care LP had a regional office in Regina Saskatchewan.

[25] According to the Appellant, this is a wrong statement of fact because there was no evidence of such an office. The Appellant argues that this wrong statement of fact formed the basis of the Master's findings that certain factors relevant to the forum non conveniens analysis favour Saskatchewan. This included: the location of the parties, location of key witnesses, comparative convenience and expense to the parties and their witnesses, and the fair and efficient working of the Canadian legal system.

[26] The Appellant maintains that this wrong statement of fact concerning a regional office in Regina should result in this Court:

• according no deference to the Master’s exercise of discretion;
• reviewing the considerations concerning the appropriateness of Ontario as a forum; and
• concluding that Saskatchewan is not a clearly more appropriate forum.

[27] I reject the Appellant’s initial premise that the Master made a factual error concerning the location of a regional office in Regina because there was evidence capable of supporting the Master’s factual finding.

[28] Specifically, in a letter dated July 13, 2017 signed by the VP Operations CBI Health Group and sent to those receiving home healthcare from the Respondents, CBI Home Health Group made the following statements:

• We Care Home Health Services has always prided itself on providing the highest quality clinical and supportive services in the community and in order to ensure consistency of services we are sharing some very important news with you.
• Starting on Saturday, 22 July 2017, Ms. Onasanya will no longer be a “We Care” franchisee supplying home health services and she will no longer operate under the “We Care” name. We Care Health Services LP (We Care) will be terminating its relationship with Adebunmi Onasanya and Ire-Oluwa Health Services Inc. effective… Friday, 21 July 2017.
• CBI Health Group is the parent company to We Care and is pleased to announce that CBI Health Group has an office located in downtown Regina to serve the Regina and surrounding area. Our office will operate under the CBI name and it will offer all of the “We Care” services to this region…
• If you would like CBI/We Care to provide you with home care services, we invite you to contact… at our CBI Health Group offices in Regina.

[29] In addition, in an email dated July 26, 2017 sent by the Regional HR Coordinator-Central Canada to an employee of the Respondents, the following statements were made:

• we are excited about the potential opportunity to join forces and have you work apart of the CBI/We Care Corporate Regina Office.
• As explained to you, Bunmi Onasanya is no longer authorized to operate as a We Care Franchisee. As a result, the We Care Franchise Regina Office will now operate as a CBI/We Care Corporate Office in Regina.
• We are hosting a staff meeting… The meeting will be located at: CBI Health Centre/We Care Health Services 2076 Park St., Regina, SK.

[30] The application of forum non conveniens is an exercise of discretion reviewable in accordance with the principle of deference to discretionary decision (Banro Corp v. Éditions Écosociété Inc., 2012 SCC 18, at para. 41). The evidence is capable of supporting the Master’s conclusion that the Appellant had a regional office in Regina Saskatchewan. Accordingly, this Court cannot conclude on an appeal that this finding of fact by the Master constituted a palpable and overriding factual error.

[31] The Appellant also refers to information allegedly relied upon by the Master and which formed the basis for his analysis. In so doing, the Appellant is attempting to re-argue this case and is asking this Court to re-weigh the evidence. This is not the role of this Court.

[32] There is no basis for this Court refusing to defer to the Master’s assessment of the considerations affecting whether Saskatchewan is a clearly more appropriate forum than Ontario for hearing this application.

[33] This Court upholds the Master’s finding on forum non conveniens.

[34] It therefore becomes unnecessary to consider whether Ontario has jurisdiction over the subject matter of the application.

no error in the Master’s conclusion that Ontario’s territorial connection to the subject matter of the application is weak

[35] As indicated, the subject matter of the application was whether, according to the laws of Ontario, the franchise agreement:

• expired on its terms on July 21, 2017,
• terminated due to delivery of a notice of termination on July 26, 2017, or
• was repudiated by the Appellant’s refusal to accept the Respondents’ renewal of it.

[36] The Master concluded that, even if the Franchise Agreement was made in Ontario, the connection between the subject matter of the application and Ontario was weak. The Master states, at para. 47, that “even if I had concluded that there is a good arguable cause that the Franchise Agreement was made in Ontario…I would have also held that the Respondents are able to rebut this court’s presumption of jurisdiction on the basis that the fact the Franchise Agreement was made in Ontario would only point to a weak relationship between Ontario and the subject matter of this application”.

[37] The Master relied on the following considerations in reaching that conclusion:

• the conduct underlying the findings in the audits which formed the basis for the refusal to renew or alternatively the termination of the franchise agreement occurred in Saskatchewan;
• the applicant had a regional office in Saskatchewan;
• the Respondents were domiciled and conducted business in Saskatchewan;
• the Franchise Agreement granted the right to operate the franchise in and around Regina Saskatchewan;

[38] The Appellant asserts that the Master applied the wrong test.

[39] The Appellant maintains that the Master weighed the factors connecting the dispute to Ontario against the factors connecting the dispute to Saskatchewan and that this incorrect analysis resulted in the Master requiring the Appellant to demonstrate a greater connection to Ontario than Saskatchewan. The Appellant argues that the law required the Respondents to demonstrate that the subject matter of the litigation’s connection to Ontario was tenuous or hypothetical.

[40] I do not accept the Appellant’s submission.

[41] The Supreme Court in Club Resorts Ltd. v. Van Breda, at para. 32, makes the following statement:

As can be observed from the jurisprudence, in Canadian constitutional law, the real and substantial connection test has given expression to the constitutionally imposed territorial limits that underlie the requirement of legitimacy in the exercise of the state’s power of adjudication. This test suggests that the connection between a state and a dispute cannot be weak or hypothetical. A weak or hypothetical connection would cast doubt upon the legitimacy of the exercise of state power over the persons affected by the dispute.

[42] This statement makes clear that the requirement that be a real and substantial connection between the subject matter of the application and Ontario is based on the constitutionally imposed territorial limit to the jurisdiction of the Ontario Superior Court. It also makes clear that the connection cannot be “weak or hypothetical”.

[43] All the factors relied upon by the Master are fundamentally territorial. Relying upon them to conclude that the connection between the subject matter of the application and the territorial limits of the Ontario Superior court is weak, is entirely consistent with the Supreme Court’s analysis in Club Resorts Ltd. v. Van Breda.

[44] The Master committed no error in taking this approach.

[45] The Master considered the territorial connection to Ontario advanced by the Appellants; namely that the decision not to renew the franchise agreement was made in Ontario and that any monies owed by the Respondents must be paid to the Appellants in Ontario, was weak. The Master was entitled to take this view. The existence of the Franchise Agreement, its terms, the Appellant’s refusal to renew, and the place where outstanding amounts owed to the Appellant must be paid are not the subject matter of the application; they are not in dispute.

[46] The subject matter of the application is whether the findings of the audits were genuine and therefore capable of supporting a decision not to renew or to terminate. The territorial factor, identified by the Master, namely that the conduct underlying the findings in the audits took place in Saskatchewan, goes to the heart of the subject matter of the application - i.e. were the audits genuine and the findings justified? If they were, then the franchise agreement was at least justifiably terminated. If the audits were not genuine, then the purported termination of the franchise agreement amounted to at least a breach of the Respondents ‘right to renew’.

[47] The Master’s comment, at para. 57, that there were “numerous stronger, more material factors…which connect this matter to Saskatchewan”, when read in the context of his entire decision, was an alternative attempt by the Master to say that the territorial connection to Ontario was weak.

[48] The Master’s conclusion on this issue, at para. 59, that after considering “all of the factors in circumstances” the Respondents had demonstrated “that there is only a weak connection to Ontario such that it is not reasonable to expect that the Respondents would be called to answer legal proceedings in Ontario” was not only reasonably open to him on the evidence but also correct.

[49] In conclusion, this appeal is dismissed.

[50] In addition to costs awarded by the Master, the Appellant will pay to the Respondent costs in the amount $11,000 inclusive of HST and disbursements.

MARROCCO A.C.J.S.C.

Date: 20190114