Rebecca Elswyth Case

This appeal concerns a class action brought by Mr. Submarine Ltd. franchisees against Maple Leaf Foods Inc. following a 2008 listeria contamination outbreak.

The franchisees claimed damages for economic losses arising from reputational harm allegedly caused by their public association with Maple Leaf during the recall.

The motion judge found that Maple Leaf owed a duty of care to the franchisees both in relation to the supply of fit products and regarding representations about product safety.

The Court of Appeal allowed the appeal, finding that while Maple Leaf may owe a duty to supply safe products, this duty is owed to end consumers, not franchisees, and does not extend to protecting against reputational harm or pure economic losses.

The court also found that Maple Leaf's undertaking regarding product safety did not encompass protection of the franchisees' reputational interests.

The plaintiff sought leave of the court to bring its motion for certification of a class proceeding and for its appointment as representative plaintiff, pursuant to s. 2(3)(b) of the Class Proceedings Act, 1992, after the statutory 90-day period had expired.

The defendants opposed the motion, arguing prejudice due to the delay.

The court granted leave, finding that the 90-day rule is frequently not strictly observed, there was no evidence of actual prejudice to the defendants (who had preserved documents and were subject to prior investigations), and the court's consent to a timetable for the certification motion implied leave.

The court emphasized that denying leave would be unjust given the circumstances and the defendants' late challenge to the plaintiff's right to bring the motion.

The plaintiff, a Mr. Sub franchisee, sought to certify a class action against Maple Leaf Foods Inc. and Maple Leaf Consumer Foods Inc. following a listeriosis outbreak in 2008 linked to the defendants' ready-to-eat (RTE) meats, which were exclusively supplied to Mr. Sub franchisees.

The plaintiff alleged negligence, including breach of duty to provide fit products, duty to warn, and negligent misrepresentation, resulting in economic losses such as lost sales, profits, and goodwill.

The defendants challenged the existence of a cause of action, particularly regarding foreseeability, proximity, and policy considerations for economic loss claims.

The court found that the plaintiff had satisfied all five certification criteria under the Class Proceedings Act, 1992, including disclosing a viable cause of action for economic losses based on negligent supply of dangerous goods and negligent misrepresentation.

The court rejected the defendants' arguments that the claim was essentially for breach of continuous supply or that policy concerns regarding indeterminate liability should negate a duty of care, noting the close relationship between the parties and the public danger posed by the contaminated product.

The motion to certify the class action was granted.