CITATION: Cervantes v. Pizza Nova Take Out Ltd., 2026 ONSC 713
DIVISIONAL COURT FILE NO.: 008/25 and 050/25 DATE: 20260324
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
Matheson, Schreck and Brownstone JJ.
BETWEEN:
JUAN JOSE LIRA CERVANTES
Plaintiff/Appellant in File No. 008/25, Respondent in File No. 100/25
– and –
PIZZA NOVA TAKE OUT LTD., PIZZA NOVA RESTAURANTS LTD., 9003088 CANADA CORP. o/a PIZZA NOVA, 8538352 CANADA INC. o/a PIZZA NOVA, 6092438 CANADA INC. o/a PIZZA NOVA, 1445851 ONTARIO INC. o/a PIZZA NOVA, 1057488 ONTARIO INC. o/a PIZZA NOVA #4, 10644625 CANADA INC. o/a PIZZA NOVA, 2388290 ONTARIO INC. o/a PIZZA NOVA STORE #68, 2522583 ONTARIO LIMITED o/a PIZZA NOVA, APTER ENTERPRISES INC. o/a PIZZA NOVA STORE #96, 2043020 ONTARIO INC. o/a PIZZA NOVA STORE #96, 2337175 ONTARIO INC. o/a PIZZA NOVA STORE #64, 1572653 ONTARIO LTD. o/a PIZZA NOVA, MICUL INVESTMENTS INC. o/a PIZZA NOVA, 2140382 ONTARIO INC. o/a PIZZA NOVA, A BIG MOBILE SIGN COMPANY INC. o/a PIZZA NOVA, 1520211 ONTARIO LTD. o/a PIZZA NOVA, 2077871 ONTARIO LTD. o/a PIZZA NOVA, 1247161 ONTARIO LIMITED o/a PIZZA NOVA #9, N & N PIZZA SALES INC. o/a PIZZA NOVA, 2484930 ONTARIO INC. o/a PIZZA NOVA #54, 2691666 ONTARIO INC. o/a PIZZA NOVA, 2226444 ONTARIO Inc. o/a PIZZA NOVA STORE #20, 904778 ONTARIO LIMITED o/a PIZZA NOVA, 2350611 ONTARIO LIMITED o/a PIZZA NOVA STORE #16, 2671105 ONTARIO INC. o/a PIZZA NOVA, 2469743 ONTARIO INC. o/a PIZZA NOVA STORE #40, 2599546 ONTARIO LTD. o/a PIZZA NOVA, 1933072 ONTARIO LTD. o/a PIZZA NOVA, 2658856 ONTARIO INC. o/a PIZZA NOVA, 1350670 ONTARIO LIMITED o/a PIZZA NOVA STORE #73, 2653581 ONTARIO INC. o/a PIZZA NOVA, 1998107 ONTARIO INC. o/a PIZZA NOVA, 2615838 ONTARIO LIMITED o/a PIZZA NOVA, 2486802 ONTARIO LIMITED o/a PIZZA NOVA, 1379170 ONTARIO LIMITED o/a PIZZA NOVA, 1165248 ONTARIO LIMITED o/a PIZZA NOVA, 2320334 ONTARIO INC. o/a PIZZA NOVA, 2623848 ONTARIO INC. o/a PIZZA NOVA, 1982292 ONTARIO INC. o/a PIZZA NOVA, 2353598 ONTARIO INC. o/a PIZZA NOVA, 2591746 ONTARIO INC. o/a PIZZA NOVA STORE #58, 1741340 ONTARIO LTD. o/a PIZZA NOVA STORE #58, 2573440 ONTARIO INC. o/a PIZZA NOVA STORE #83, 2026399 ONTARIO INC. o/a PIZZA NOVA STORE #83, 1719061 ONTARIO INC. o/a PIZZA NOVA, 1475038 ONTARIO LTD. o/a PIZZA NOVA, 2168747 ONTARIO INC. o/a PIZZA NOVA, 1891469 ONTARIO INC. o/a PIZZA NOVA, 1734543 ONTARIO INC. o/a PIZZA NOVA #99, 2358870 ONTARIO INC. o/a PIZZA NOVA, 1858313 ONTARIO INC. o/a PIZZA NOVA #34, 2316956 ONTARIO INC. o/a PIZZA NOVA STORE #92, 2260955 ONTARIO LTD. o/a PIZZA NOVA, 867400 ONTARIO INC. o/a PIZZA NOVA, 1548891 ONTARIO LIMITED o/a PIZZA NOVA, 2475951 ONTARIO LIMITED o/a PIZZA NOVA, 1808955 ONTARIO INC. o/a PIZZA NOVA STORE #17, 2213883 ONTARIO INC. o/a PIZZA NOVA STORE #71, 2154369 ONTARIO INC. o/a PIZZA NOVA, 2156665 ONTARIO INC. o/a PIZZA NOVA, 1495165 ONTARIO LIMITED o/a PIZZA NOVA STORE #81, 2522142 ONTARIO INC. o/a PIZZA NOVA STORE #27, 1519903 ONTARIO INC. o/a PIZZA NOVA, 2109793 ONTARIO INC. o/a PIZZA NOVA STORE #2,1536803 ONTARIO INC. o/a PIZZA NOVA STORE #7, 918144 ONTARIO LIMITED o/a PIZZA NOVA, 1744313 ONTARIO INC. o/a PIZZA NOVA STORE #57, DANGO LTD. o/a PIZZA NOVA STORE #508, 2339115 ONTARIO LTD. o/a PIZZA NOVA, 1419981 ONTARIO LIMITED o/a PIZZA NOVA, 2129873 ONTARIO INC. o/a PIZZA NOVA STORE #93, MORGAN TELECOMMUNICATIONS INC. o/a PIZZA NOVA, 2476243 ONTARIO INC. o/a PIZZA NOVA, 5012571 ONTARIO INC. o/a PIZZA NOVA STORE #106, 2175165 ONTARIO INC. o/a PIZZA NOVA, 2051247 ONTARIO INC. o/a PIZZA NOVA, 2293391 ONTARIO LTD. o/a PIZZA NOVA, 2459372 ONTARIO INC. o/a PIZZA NOVA, 1899974 ONTARIO INC. o/a PIZZA NOVA #340, 1480354 ONTARIO LIMITED o/a PIZZA NOVA, 1713364 ONTARIO LIMITED o/a PIZZA NOVA, 1994810 ONTARIO INC. o/a PIZZA NOVA, MAHA LAXMI INC. o/a PIZZA NOVA, 2578858 AASHVI INC. o/a PIZZA NOVA 2424783 ONTARIO INC. o/a PIZZA NOVA, 2362296 ONTARIO INC. o/a PIZZA NOVA, 2057307 ONTARIO INC. o/a PIZZA NOVA, 1025410 ONTARIO LIMITED o/a PIZZA NOVA, 2246291 ONTARIO LTD. o/a PIZZA NOVA, 1364909 ONTARIO LTD., o/a PIZZA NOVA, 2584158 ONTARIO INC. o/a PIZZA NOVA #389, 2705034 ONTARIO INC. o/a PIZZA NOVA AFGHAN, 2455927 ONTARIO INC., o/a PIZZA NOVA #82, 1309474 ONTARIO LIMITED o/a PIZZA NOVA, 2215847 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 20 Harwood Avenue, Ajax, 2087584 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 1 Rossland Road West, Ajax, 1578500 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA, 14845 Yonge Street, Aurora, 2311199 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 129 Pedersen Drive, Aurora, 2652947 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 285 Dunlop Street West, Barrie, 2564958 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 94 College Street West, Belleville, 9900454 Canada Inc. JOHN DOE CORP. O/A PIZZA NOVA 256 Queen Street South, Bolton, 2266303 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 2377 Hwy #2, Bowmanville, JOHN DOE CORP. O/A PIZZA NOVA 478 Holland Street West (Hwy #88), Bradford, 2121239 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 400 Steeles Avenue East, Brampton, 1791468 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 14 Lisa Street, Brampton, 2687273 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 10045 Hurontario St., Brampton, 2151871 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 3975 Cottrelle Blvd., Brampton, 1780768 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 2260 Bovaird Drive East, Brampton, 2369666 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 10 Earlsbridge Blvd., Brampton, 1647986 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 5969 Baldwin Street, South, Brooklin, 2290272 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 728 Burloak Drive, Burlington, 1939184 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 593 Brant Street, Burlington, 1670924 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 1450 Headon Road, Burlington, 2575416 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 3120 Rutherford Road, Concord, 1731548 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 369 Mountainview Road South, Georgetown, 2508201 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 5 Clair Road West, Guelph, 1899974 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 1016 King Street West, Hamilton, 2151821 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 1405 Upper James St., Unit A3, Hamilton, 2704841 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 99A Main Street East, Huntsville, 002615023 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 1484 Innisfil Beach Road, Unit D, Innisfil, 2475951 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA A2 A2 - 3 - 1700 King Road, King City, 5004269 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 24 Kent Street West, Lindsay, 6092438 Canada Inc. JOHN DOE CORP. O/A PIZZA NOVA 1194 Highbury Avenue North, Unit 2, London, 2620925 Ontario Inc JOHN DOE CORP. O/A PIZZA NOVA 850 Wellington Road, London, N & N Pizza Sales Inc JOHN DOE CORP. O/A PIZZA NOVA 3417 Derry Road East, Mississauga, 1415438 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 2535 Major Mackenzie Drive West, Maple, 1845209 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 70 Copper Creek Drive, Markham, 2099950 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 6050 Highway #7, Markham, JOHN DOE CORP. O/A PIZZA NOVA 10 Bur Oak Avenue, Unit 4, Markham, JOHN DOE CORP. O/A PIZZA NOVA 9830 Markham Road, Unit R-5, Markham, 2520406 Ontario Inc JOHN DOE CORP. O/A PIZZA NOVA 815 King Street, Midland, 2411013 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 890 Main Street East, Milton, 1842241 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 3100 Dixie Road, Mississauga, JOHN DOE CORP. O/A PIZZA NOVA 660 Eglinton Avenue West, Mississauga, JOHN DOE CORP. O/A PIZZA NOVA 4099 Erin Mills Parkway, Mississauga, 1372323 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 7235 Bellshire Gate, Mississauga, 1515172 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 6040 Glen Erin Drive, Mississauga, 2339965 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 6970 Lisgar Drive, Mississauga, 1453409 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 1744 Lakeshore Road West, Mississauga, 11065424 Canada Inc JOHN DOE CORP. O/A PIZZA NOVA 1211 Hurontario Street, Unit 104A, Mississauga, 2456017 Ontario Ltd JOHN DOE CORP. O/A PIZZA NOVA 2400 Dundas Street West, Unit 4, Mississauga, 002613085 Ontario Ltd JOHN DOE CORP. O/A PIZZA NOVA 425 Burnhamthorpe Road West, Mississauga, 1757769 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 18025 Yonge Street, Newmarket, 1761861 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 2501 Third Line, Oakville, 1733320 Ontario Ltd JOHN DOE CORP. O/A PIZZA NOVA 1133 Monastery Drive, 2339161 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 620 Ford Drive, Oakville, STRUGA PRO INC. JOHN DOE CORP. O/A PIZZA NOVA 293 Coldwater Road West, Orillia, 1679692 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 1288 Ritson Road North, Oshawa, 2520406 Ontario Inc JOHN DOE CORP. O/A PIZZA NOVA 175 Main Street, Penetanguishene, 1920491 Ontario Inc JOHN DOE CORP. O/A PIZZA NOVA 908 Lansdowne Street West, Peterborough, 2263740 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 1360 Kingston Road, Pickering, 2455927 Ontario Inc JOHN DOE CORP. O/A PIZZA NOVA 300 Kingston Road, Pickering, 1782527 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 18 Levendale Road, Richmond Hill, 1415438 Ontario Limited JOHN DOE CORP. O/A PIZZA NOVA 12260 Yonge Street, Richmond Hill, 574903 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 9275 Bayview Avenue, Unit 2, Richmond Hill, 2104806 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 5892 Main Street, Stouffville, 1547972 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 9200 Bathurst Street, Thornhill, 1126200 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 8 Green Lane, Thornhill, 2226444 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 193 Harbord Street, Toronto, 7179243 Canada Limited JOHN DOE CORP. O/A PIZZA NOVA 526 Church Street, Toronto, JOHN DOE CORP. O/A PIZZA NOVA 1054 Centre Street West, Vaughan, 2347199 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 207 Dundas Street West, Whitby, 1632760 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 3975 Garden Street, Whitby, 11522388 Canada Inc. JOHN DOE CORP. O/A PIZZA NOVA 1400 Ottawa Street South, Kitchener, 1557846 Ontario Inc. JOHN DOE CORP. O/A PIZZA NOVA 9750 Weston Road, Unit 14, Woodbridge, 1599783 Ontario Ltd. JOHN DOE CORP. O/A PIZZA NOVA 3063 Muskoka Road, 169, Bala, JOHN DOE CORP. O/A PIZZA NOVA Rogers Centre
Franchisee Defendants are Appellants in File No. 050/25 (except 1670924 Ontario Inc.) and Respondents in File No. 100/25
Jody Brown, Joshua Mandryk and Melanie Anderson, for Juan Jose Lira Cervantes
Christopher I. R. Morrison, Joel Cormier, Hudson Chalmers, Kathleen Lefebre and Margaret Klassen, for the Franchisee Defendants (except 1670924 Ontario Inc.)
Paul Tushinski and Eric Adams, for the Franchisor Pizza Nova Take Out Ltd.
HEARD at Toronto: February 3, 2026
AMENDED REASONS FOR DECISION
Matheson J.
[1] There are two appeals before this Court, each challenging certain orders made in the decision of Glustein J. dated December 17, 2024 (the Decision) to certify some but not all of the claims in this class action. In the underlying claim, the Plaintiff is a delivery driver and alleges that the delivery drivers for the 141 Pizza Nova Franchisees are each employees, rather than independent contractors, and they should have received certain entitlements under the Employment Standards Act, 2000, S.O. 2000, c. 41 (the ESA). Several causes of action have been certified.
[2] For the most part, the Decision is not being challenged. The Franchisor Pizza Nova Take Out Ltd. is not appealing the Decision, which certifies the class action as against it. The appeal issues relate to the scope of the certification against the Franchisees. The Plaintiff is also appealing the Decision in part.
[3] In the Plaintiff’s appeal, the Plaintiff submits that the motion judge erred as follows:
(i) in holding that the Franchisees are not “common employers” under the ESA; and,
(ii) in holding that some of the claims could only be asserted against the four Franchisees that the Plaintiff did deliveries for based upon the Hughes/Ragoonanan[^1] principles.
[4] In their appeal, the Franchisees submit that the motion judge erred as follows:
(i) in certifying a conspiracy claim that each Franchisee conspired with all of the 140 other Franchisees;
(ii) in deciding that the issue of whether or not each driver was an employee rather than an independent contractor could be a common issue; and,
(iii) in certifying a negligence claim in parallel to the breach of contract claim.
[5] Given the two appeals, the parties on the appeals will be referred to as the Plaintiff, the Franchisor and the Franchisees, rather than by their appellate roles. The term Franchisees shall refer to all but the one Franchisee that has not participated in these legal proceedings.
[6] For the reasons set out below, I would grant the appeal with respect to the above conspiracy issue and otherwise dismiss the appeals.
Brief Background
[7] Pizza Nova began as one, family run, restaurant in Toronto. It is now a large franchisor that has authorized about 140 franchisees (the Franchisees) to operate throughout Ontario. It remains the case that many of the Franchisees are small businesses, as was the first restaurant. The Franchisees contract with their own delivery drivers and, with minor exceptions, have done so on the basis that the drivers are independent contractors.
[8] The Plaintiff worked as a pizza delivery driver for four Pizza Nova locations in Toronto (the Cervantes Franchisees). He was paid as an independent contractor and did not receive statutory employment benefits such as a minimum wage, vacation and other pay that he may have qualified for under the ESA. Further, the Cervantes Franchisees did not make EI or CPP contributions on his behalf.
[9] The Plaintiff commenced a proposed class action against the Pizza Nova Franchisor and the 141 Franchisees, asserting claims based on whether he and each of the other delivery drivers for each of the Franchisees were employees rather than independent contractors. The Plaintiff claimed breach of the ESA, breach of contract and the duty of good faith, negligence, conspiracy and unjust enrichment.
[10] The Plaintiff further alleged that all of the defendants were “common employers” under the ESA and were therefore each liable to pay all the employment benefits for all the drivers regardless of which Franchisee the drivers did deliveries for. Based on those allegations, any one Franchisee could be called upon to pay all the benefits for all of the approximately 1800 or more drivers. The Plaintiff claimed $150 million in general damages and $5 million in punitive, aggravated and exemplary damages, as well as other remedies.
The Decision
[11] The designated class proceedings judge (the motion judge) heard the certification motion and certified the following claims: breach of the ESA, breach of contract and the duty to act in good faith, conspiracy, unjust enrichment and, in the alternative to the other claims, negligence.
[12] The certified claims, other than for conspiracy, were limited to claims against the Franchisor and the four Cervantes Franchisees that the Plaintiff had made deliveries for. However, the Plaintiff sought and was given leave to propose more Plaintiffs and expand the certification. The Plaintiff has not yet taken advantage of this opportunity.
[13] The Decision includes a detailed review of the amended statement of claim and relevant evidence, including the documents that show the relationship between the Franchisor and its Franchisees, such as a mandatory Operations Manual, the pizza delivery system, a template driver contract, and the two different forms of franchise agreements used over the relevant time.
[14] On the issues relevant to these two appeals, the motion judge concluded as follows.
[15] Common Employer: The Plaintiff asserted that each Franchisee is a common employer of every delivery driver. The motion judge disagreed.
[16] This claim is not based on the particular arrangements at this franchise. It would apply to all franchises. On the motion, the Plaintiff acknowledged the novelty of the submission that all franchisees of a franchise are common employers of any employee who works for any franchisee. The motion judge noted and had regard for the role of novel claims.
[17] The claim is based on s. 4 of the ESA. The motion judge considered s. 4(1) of the ESA, which had two definitions for a “common employer” over the relevant time. Both definitions included the words that a common employer relationship arose “if associated or related activities or businesses are or were carried on by or through an employer and one or more other persons”.
[18] The motion judge further considered the case law and found that there was no pleading capable of supporting a claim that any Franchisee engaged in any “associated or related activities or businesses” with any of the other Franchisees. Instead, each Franchisee had a business relationship with the Franchisor, which was shown by agreements, common systems and advertising strategies, branding and other practices, including the requirement to have drivers classified as independent contractors.
[19] The motion judge found that imposing liability on each Franchisee as a common employer for every delivery driver is inconsistent with the policy underlying the ESA provision, which protects an employee who is subject to the interrelationship between two potential employers (here, it would be the 141 Franchisees as the potential employers).
[20] The motion judge noted that the Plaintiff’s position would have an impact on franchise law. The Plaintiff was asking for a finding of “common employer” based solely on criteria that are inherent to the type of corporate structure, without consideration of the activities of the Franchisees in the alleged employment relationship. The motion judge gave the example of the Franchisee in Keswick being found a common employer of the drivers for the Franchisee in Bolton even though there was no connection between those businesses other than both being Franchisees of the same franchise.
[21] Hughes/Ragoonanan: The Defendants objected to certification of all of the claims against all of the Franchisees because the Plaintiff had only done deliveries for four of them (the Cervantes Franchisees). They relied on the Hughes/Ragoonanan principle that there must be a representative plaintiff who personally has a cause of action against each Defendant.
[22] The motion judge set out the Hughes/Ragoonanan principles as they were summarized in Vecchio Longo Consulting Services Inc. v. Aphria Inc., 2021 ONSC 5405, 157 O.R. (3d) 92, at paras. 128-130, concluding that those principles applied to this case.
[23] The motion judge found that the Hughes/Ragoonanan principles meant that the claims (other than for conspiracy) could be certified against only the Franchisor and the Cervantes Franchisees. The Plaintiff requested leave to propose more drivers as plaintiffs, expanding the Franchisees certified for the non-conspiracy claims. The motion judge granted that request.
[24] Conspiracy: The Plaintiff claimed that all of the defendants conspired together and with each other. The motion judge found that the conspiracy claim disclosed a cause of action against all of the Franchisees and the Franchisor.
[25] The motion judge considered the allegations in the amended statement of claim. The overt acts that were pleaded and cited by the motion judge related to the Franchisor’s requirements of its Franchisees. There were no acts pleaded as between the Franchisees.
[26] The motion judge found that the required elements of conspiracy were sufficiently pleaded, alleging that the Defendants acted in combination or with common design to breach the ESA, CPP, EI and WSIA. The motion judge certified the claimed conspiracy between all of the Defendants as if they all conspired together, and with one another, and any one Franchisee would be exposed for the allegedly unlawful employment classification of the class members that did work for the other Franchisees.
[27] Employment misclassification: The certified common issues include the issue of whether class members are employees or independent contractors of the Franchisees. The motion judge disagreed with the Defendants’ position that the fact-specific nature of the employment status inquiry and other submissions meant that classification could not be a common issue.
[28] The motion judge reviewed the applicable law, beginning with 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, [2001] 2 S.C.R. 983, and its non-exhaustive list of factors to be considered. The motion judge recognized the fact-specific nature of the inquiry and considered the OLRB cases (also submitted to this Court) in which pizza delivery drivers have been found to be employees or independent contractors, depending on the facts.
[29] The motion judge applied authority that a court cannot reject commonality on this issue simply because there are some factors among class members that may be slightly different. The motion judge held that the court must review all of the relevant factors to determine if there is wide variability or a lack of core commonality in the nature or extent of control exercised by the company over the proposed class members, citing Omarali v. Just Energy, 2016 ONSC 4094, 2016 C.L.L.C. 210-054 and Navartnarajah v. FSB Group Ltd., 2021 ONSC 5418.
[30] The motion judge reviewed both the factors that could be determined in common and those where some differences were shown. The motion judge concluded that there was some basis in fact that core factors relating to employment status of the delivery drivers could be determined in common, listing those factors. The motion judge found that the differences existed at the margins of the working relationship, not at its core.
[31] Negligence: The Plaintiff’s causes of action included not only a breach of contract claim but also a claim of negligence in the alternative. Both were certified.
[32] The motion judge noted that both sides relied on 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35, [2020] 3 S.C.R. 504, in which the Supreme Court dismissed a class action claim brought by the franchisees of Mr. Sub regarding contaminated meat products.
[33] The motion judge discussed the decision in the above case, concluding that when parties have the opportunity to regulate their affairs by contract, that opportunity militates strongly against the recognition of a duty of care. However, the motion judge also noted that claims in negligence had frequently been certified alongside a breach of contract claim for misclassification.
[34] The motion judge concluded that it was not beyond doubt that an employment relationship precludes a relationship of proximity that is sufficient to ground a duty of care in the circumstances of this case. It was therefore not plain and obvious that the Plaintiff’s claim would fail.
Issues and Standard of Review
[35] The issues are whether the motion judge erred as follows:
(i) in concluding that the Franchisees are not “common employers” under the ESA;
(ii) in certifying the non-conspiracy claims against only the four Franchisees that the Plaintiff did deliveries for (the Hughes/Ragoonanan issue);
(iii) in certifying the conspiracy claim;
(iv) in deciding that the issue of the status of each driver as an employee or an independent contractor should be a common issue; and,
(v) in certifying the negligence claim.
[36] The standard of review is as set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 8, 10 and 37: correctness for questions of law; palpable and overriding error for questions of fact; and, palpable and overriding error for questions of mixed fact and law except that extricable questions of law are reviewed for correctness. Further, a decision by a certification judge is entitled to substantial deference, including the determination of the common issues: Pearson v. Inco Ltd., et al. (2006), 2006 913 (ON CA), 78 O.R. (3d) 641 (C.A.), at para. 43.
Common Employer
[37] The Plaintiff submits that the motion judge erred in law in finding that he did not plead a tenable claim that the Franchisees are “common employers” of the delivery drivers under the ESA. This claim is not based on the particular arrangements at this franchise. It would apply to all franchises. Further to the Plaintiff’s submissions, every franchisee would always be liable for the ESA obligations of every other franchisee.
[38] The Plaintiff begins with the words of the ESA, which were cited and discussed by the motion judge without error, and argues for a broad interpretation, which the motion judge also acknowledged.
[39] I conclude that the motion judge did not err in the common employer analysis.
[40] Under s. 4(1) of the ESA, a common employer relationship arises “if associated or related activities or businesses are or were carried on by or through an employer and one or more other persons” as defined in s. 1(1). Prior to January 1, 2018, the s. 4 definition also required that “the intent or effect of [the associated or related activities or businesses] is or has been to directly or indirectly defeat the intent and purpose of [the ESA]”. The motion judge considered relevant case law providing that this change broadened the scope of the definition.
[41] The Plaintiff had not initially pled that the Franchisees were common employers, instead pleading that the Franchisor was a common employer with each Franchisee. However, the issue was raised on the certification motion and the motion judge addressed it.
[42] The Plaintiff does not point to an error of law in the legal principles as set out in the Decision. The Plaintiff sets out various criteria that may be considered in determining whether activities or businesses are associated or related, as did the motion judge, and agrees that the inquiry is context-specific and fact-dependent.
[43] The motion judge considered the case law that included various factors or criteria that assisted in determining whether the “associated or related” test was met, such as common ownership, common control, the use of the same premises or other assets, and the movement of employees between the business entities.
[44] The motion judge based his decision on the alleged facts before him. He found that each Franchisee had a business relationship with the Franchisor, not with the other Franchisees. He found that the only possible association or relationship between the Franchisees was that they each decided to enter into a business relationship with the Franchisor. The relationship with the Franchisor did not create a common employer relationship as between the Franchisees. Leaving aside the possibility that one Franchisee might own multiple franchises, the motion judge found that the individual Franchisees operated their own independent businesses and had independent relationships with the Franchisor, not with each other.
[45] The Plaintiff submits that by finding that the Franchisor was a common employer, it follows that so too was each Franchisee. I disagree. The role of a franchisor under its agreement with a franchisee may result in a finding that it is managing the franchisee, but not that one franchisee has a role managing another franchisee.
[46] The Plaintiff relies on a common customer base, yet, subject to geographic differences, these Franchisees are competitors. The Plaintiff relies on other aspects of a franchise arrangement, such as sharing a common trade name or logo. This would be contrary to the legal principles put forward, including by the Plaintiff, that no single factor is determinative: Adamson v. Murray Axmith & Associates Ltd., 2005 5481 (Ont. Sup. Ct.), at para. 23.
[47] The Plaintiff has not shown an error on this ground.
Hughes/Ragoonanan issue
[48] The motion judge certified the non-conspiracy claims against only the four Franchisees that the Plaintiff had done deliveries for, relying on the Hughes/Ragoonanan principles. The Plaintiff submits that the motion judge erred in interpreting those principles because they only require that there be a representative plaintiff with a cause of action against each defendant. The Plaintiff submits that since the motion judge found a cause of action in conspiracy between all of the Defendants, that cause of action was sufficient to certify all the claims against all the Defendants. I need not address this issue given the decision on the conspiracy ground of appeal, which follows.
Conspiracy
[49] The Franchisees submit that the motion judge erred in law in certifying the Plaintiff’s claim that all of the defendants conspired together and with each other. The Franchisees submit that the alleged conspiracy amongst all the Defendants cannot be certified because it is entirely based on the Franchisor’s arrangements.
[50] The alleged conspiracy was described by the motion judge as follows: “In effect, the [Plaintiff] alleges that the defendants sought to implement a universal, franchise-wide practice, directed towards the Class, to deprive the Class of their [statutory employment benefits].” However, this description of the pleading by the motions judge, which places the defendants on an equal footing, is inconsistent with other pleadings in the amended statement of claim that the Franchisor, not the Franchisees, retained extensive control over the terms and conditions of the agreements with the drivers. Further, the motion judge relied on the overt acts that were pleaded in support of the alleged conspiracy, which were entirely about the Franchisor’s agreements with each Franchisee.
[51] It was apparent in the submissions in this Court that the broad conspiracy claim is significant to the Plaintiff as a way to satisfy the principles in Hughes/Ragoonanan and certify against all the Franchisees rather than just those that the Plaintiff did deliveries for. However, the avoidance of Hughes/Ragoonanan is not the issue. The issue is whether the motion judge erred in his decision to certify the conspiracy claim as pleaded in the amended statement of claim. The Plaintiff claimed that all of the Defendants conspired together and with each other.
[52] The Plaintiff further submits that aspects of the conspiracy test should not be challenged now because the motion judge said that they were not challenged on the motion. This is disputed. Further, reading the Decision as a whole, it is apparent that there were no formal admissions in this regard. The motion judge comprehensively addressed each element of the conspiracy test.
[53] The Franchisees raise several issues with the conspiracy decision. I need not deal with all of them to address this issue.
[54] There is no question of the threshold test for a claim under s. 5(1) (a) of the Class Proceedings Act, 1992, S.O. 1992, c. 6. It is the “plain and obvious” test as set out in the Decision at para. 52.
[55] Further, the motion judge made no error in setting out the five-part test for the tort of a conspiracy to commit an unlawful act, as follows: (i) that the co-conspirators act in combination by agreement or with a common design; (ii) that their conduct is unlawful; (iii) that their conduct is directed towards the plaintiff; (iv) that the co-conspirators should know that, in the circumstances, injury to the plaintiff is likely to result; and, (v) that their conduct causes injury to the plaintiff: Decision, at para. 127.
[56] The Franchisees distinguish this case from other authorities because an independent contractor relationship is not presumptively unlawful, unlike, for example, price fixing. That is so. However, based upon the facts as pleaded here, it is alleged to be unlawful. That is sufficient.
[57] Moving to the first requirement for a conspiracy to commit an unlawful act, the Plaintiff must plead that the Defendants acted in combination by agreement or with a common design. Although a formal agreement is not required, the core element of a conspiracy is agreement. To plead a civil conspiracy, a statement of claim must state the agreement to conspire to commit the unlawful act: Ontario Consumers Home Services v. Enercare Inc., 2014 ONSC 4154, at para. 24; Berry v. Pulley, 2012 ONSC 1790, at para. 374.
[58] The amended statement of claim does not allege any agreement to control, or attempt to control, the relationship of one Franchisee’s drivers by any other Franchisee, or an agreement to collectively mischaracterize their drivers as independent contractors. There are no allegations beyond the individual relationships between the Franchisor and each Franchisee.
[59] The Plaintiff submits that it is enough that each Franchisee entered into a franchise agreement with the Franchisor and pursuant to that agreement hired its drivers as independent contractors when they allegedly should have been treated as employees. The Plaintiff submits that conduct is enough to plead a conspiracy to commit an unlawful act. Under this approach, every franchise relationship would meet the requirement that the franchisor and the franchisees acted in combination, together and with each other. While I do not say that direct communications between the Franchisees is required, the use of standard form agreements is not enough.
[60] The motion judge relied on those standard form contractual arrangements. He noted the relevant pleadings in the amended statement of claim, and the documents incorporated by reference, including the agreements between the Franchisor and each Franchisee that required, among other things, that each Franchisee agreed to follow the Manual including its requirement that drivers be hired as independent contractors.
[61] However, the motion judge erred in failing to consider the amended statement of claim as a whole. It also alleged that the Franchisor controlled the terms of the standard delivery driver contract and required that the Franchisees use only that contract. The claim alleges that the Franchisor, not the Franchisees, retained extensive control over the terms and conditions of the agreements with the drivers.
[62] At best, the claim, read as a whole, shows that the Franchisees each acquiesced to the Franchisor’s requirements regarding drivers. Acquiescence is insufficient for a conspiracy: Berry, at para. 375, citing McKinlay Transport Ltd. v. Motor Transport Industrial Relations Bureau of Ontario, 1996 CarswellOnt 413. Further, conduct can be evidence of an agreement but there is no tort of engaging in acts that further someone else’s conspiracy: Pontillo v. Zinger et al., 2010 ONSC 5537, at para. 15.
[63] This case is unlike Crosslink v. BASF Canada, 2014 ONSC 4529 (Div. Ct.), cited by the motion judge. In Crosslink, leave to appeal was sought in part because allegedly there were insufficient particulars for the conspiracy claim in the statement of claim. Yet in Crosslink, unlike this claim, there were pleadings setting out direct communications. It was expressly alleged that the senior executives and employees of each of the defendants had telephone conversations and meetings with each other and agreed to allocate the volumes of sales and markets amongst themselves in breach of the Competition Act: Crosslink, at para. 75. That pleading was sufficient, but, in this case, there are no such allegations as between the Franchisees in the Cervantes amended statement of claim.
[64] The motion judge also relied on Quizno's Canada Restaurant Corporation v. 2038724 Ontario Ltd., 2010 ONCA 466, 100 O.R. (3d) 721, the certification of an unlawful conspiracy case for alleged price fixing under the Competition Act, R.S.C. 1985, c. C-34. In that case, the franchisees were suing the franchisor and its food and supply distributor companies. It is not a case of an alleged conspiracy by franchisees with one another or with the franchisor. And the primary issue was damages. I therefore do not find it helpful on this issue.
[65] Essentially, the Plaintiff’s position is that this business structure will result in an unlawful conspiracy between the franchisor and all the franchisees if any aspect of the franchisor’s contractual arrangements, required to become a franchisee, turns out to be unlawful and the other requirements for the tort are met. In turn, all of the franchisees could be liable to all class members for an unlawful conspiracy, not just to the class members they dealt with. This gives rise to other issues under the test, such as the requirement that the Defendants know that their conduct is likely to cause injury to not just the Plaintiff (for the four Franchisees that contracted with him), or to that Franchisee’s own drivers, but to all of the drivers for all 141 Franchisees.
[66] This case does not turn on a lack of particularity. It is plain and obvious that the Plaintiff is relying on the relationship as determined by the Franchisor in its requirements about drivers, which it is pled that the Franchisor controlled, not on any other conduct to conspire including the Franchisees. The motion judge erred in certifying the claimed conspiracy between all of the Defendants as if they all agreed to commit an unlawful act with one another.
[67] I would therefore grant the appeal on this ground.
Employment classification
[68] The Franchisees submit that the motion judge erred in certifying the question of employment status as a common issue. They submit that the established jurisprudence shows that the question of whether a person is an employee or an independent contractor is a fact-driven analysis and in this case the factors vary substantially across the different businesses.
[69] There is no issue that some employment classification issues have been certified as common issues, and others not. The Franchisees rely on those that were not certified. But the Franchisees have not identified a legal error in the motion judge’s articulation of the applicable legal principles.
[70] The Franchisees do suggest that the Decision conflicts with Davis v. Amazon Canada Fulfillment Services, ULC, 2023 ONSC 3665. However, that case was decided on its own factual matrix, with the motion judge also observing that the certification of misclassification depends on the specific facts of each case.
[71] The Franchisees are essentially asking this Court to re-weigh the evidence regarding the common factors and those that diverge and reach a different conclusion. They have provided this Court with an extensive chart of the factual differences that they submit we should (re)consider. The Franchisees would have to show palpable and overriding error and have not done so. Further, of all the issues on this appeal, this issue engages the expertise of the motion judge the most.
[72] As noted in Navartnarajah, at para. 20, relied on by the motion judge, if there are certain features of the relationship with the drivers that distinguish them from other members of the class, they can be identified in the judgment at the common issues trial.
Negligence claim
[73] The Franchisees submit that the motion judge erred in law in certifying a negligence claim for pure economic loss in addition to the breach of contract claim in this case. The Franchisees submit that the motion judge relied on earlier authorities that did not consider the issue of claims for pure economic loss.
[74] The Franchisees did not emphasize this issue in oral submissions, noting that it does not substantially change the certified class action. However, the issue was not abandoned.
[75] It is apparent that the authorities relied on by the motion judge do not expressly address the argument based upon pure economic loss, specifically, Bozsik v Livingston International Inc., 2016 ONSC 7168, 38 C.C.E.L. (4th) 43; Omarali v. Just Energy; Fulawka v. Bank of Nova Scotia, 2012 ONCA 443, 111 O.R. (3d) 346; Berg et al. v. Canadian Hockey League et al., 2019 ONSC 2106 (Div. Ct.).
[76] However, the motion judge also addressed the later cases that the Franchisees rely on, specifically Davis and Heller v. Uber Technologies Inc., 2021 ONSC 5518, 73 C.C.E.L. (4th) 45. The motion judge acknowledged that certification of the negligence claim was denied in those cases.
[77] Further, the motion judge considered the Supreme Court decision in Maple Leaf Foods on the subject of pure economic loss. The motion judge found that on that analysis, it is arguable that “‘the reasonable availability of adequate contractual protection within a commercial relationship’ does not apply to the employment relationship on the facts as pleaded in the present case. A delivery driver searching for low paid shift work may not have the same ability to regulate their affairs in a contract such that a negligence claim would be precluded.”
[78] The motion judge expressly made “no finding that a negligence claim would succeed at trial.”
[79] I am not persuaded that the motion judge made an appealable error in leaving open the possibility of a negligence claim.
Decision
[80] The Plaintiff’s appeal is dismissed. The Franchisees’ appeal is granted in part, in relation to conspiracy. The parties shall submit a draft order that specifies the amendment to the certification order required to give effect to this Court’s order on conspiracy, within two weeks from today. If the parties cannot agree, they shall submit draft orders with brief comments.
[81] On the Plaintiff’s appeal, the Plaintiff shall pay costs to the Franchisees fixed at $5,000 for the leave motion and $15,000 for the appeal, all inclusive. On the Franchisees’ appeal, the Plaintiff shall pay them $5,000 for the leave motion and $7,500 for the appeal, all inclusive.
___________________________ Matheson J.
I agree
Schreck J.
I agree
Brownstone J.
Date: March 24, 2026
Cervantes v. Pizza Nova Take Out Ltd., 2026 ONSC 713
DIVISIONAL COURT FILE NO.: 008/25 and 050/25 DATE: 20260324
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Matheson, Schreck and Brownstone JJ.
BETWEEN:
JUAN JOSE LIRA CERVANTES
Plaintiff/Appellant in File No. 008/25
Respondent in File No. 100/25
– and –
PIZZA NOVA TAKE OUT LTD., PIZZA NOVA RESTAURANTS LTD., 9003088 CANADA CORP. o/a PIZZA NOVA, 8538352 CANADA INC. et al.
Franchisee Defendants are Appellants in File No. 050/25 (except 1670924 Ontario Inc.) and Respondents in File No. 100/25
AMENDED REASONS FOR DECISION
Matheson J.
Date: March 24, 2026
[^1]: Hughes v. Sunbeam Corp. (Canada) Ltd. (2002), 2002 45051 (ON CA), 61 O.R. (3d) 433 (C.A.); Ragoonanan Estate v. Imperial Tobacco Canada Ltd. (2000), 2000 22719 (ON SC), 51 O.R. (3d) 603 (C.A.), regarding whether there needs to be a representative plaintiff with a claim against each defendant.