Retire-At-Home Limited Partnership v. 0900558 B.C. Ltd., 2020 ONSC 3674

COURT FILE NO.: CV-20-638210 DATE: 20200611

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: RETIRE-AT-HOME LIMITED PARTNERSHIP, Plaintiff

AND:

0900558 B.C. LTD., 8677468 CANADA INC., 1522456 ALBERTA INC., 2280471 ONTARIO INC., 2218590 ONTARIO INC., 8370311 CANADA INC., 2247450 ONTARIO INC., 2250106 ONTARIO INC., ST. NINO CANADA INC., 8200467 CANADA INC. and 8200483 CANADA INC., Defendants

BEFORE: Sanfilippo J.

COUNSEL: Andrew McCoomb, for the Plaintiff Peter W.G. Carey and Chrisophe J. Shammas, for the Defendant 8200483 Canada Inc. Allan D.J. Dick and Daniel Hamson, for the Defendants 0900558 B.C. Ltd., 8677468 Canada Inc., 1522456 Alberta Inc., 2280471 Ontario Inc., 2218590 Ontario Inc., 8370311 Canada Inc., 2247450 Ontario Inc., 2250106 Ontario Inc., St. Nino Canada Inc. and 8200467 Canada Inc.

HEARD: June 10, 2020

ENDORSEMENT

Overview

[1] On June 2, 2020, the Plaintiff, Retire-At-Home Limited Partnership, requested the immediate scheduling of a motion for injunctive relief (the “Injunction Motion”) and cross-motions brought by the Defendants for security for costs (the “Security for Costs Motions”), on the basis of urgency. The Defendants did not support the request, denying that these Motions were urgent.

[2] On June 2, 2020, Myers J. referred the Plaintiff’s request to a case conference, that was scheduled for June 10, 2020 before me, for determination of whether the Motions ought to be scheduled for immediate hearing on the basis of urgency. After receiving and hearing submissions from all parties, I found that the Motions do not satisfy the requirements for immediate scheduling as provided by the Consolidated Notice to the Profession, Litigants, Accused Persons, Public and the Media, Regarding the Expanded Operations of the Ontario Superior Court of Justice, dated May 13, 2020 and effective May 19, 2020 (the “May 2020 Notice”). I also found that the Motions are not ready for argument, in any event, and will implement a timetable that will ready these Motions for hearing after July 31, 2020, applying dates convenient to the parties and their counsel.

A. The Issue of Urgency

[3] On March 15, 2020, the Court suspended its regular operations by reason of the health emergency caused by the COVID-19 pandemic, as communicated in the Notice to Profession, the Public and the Media Regarding Civil and Family Proceedings, suspending regular court operations effective March 17, 2020 (the “March 2020 Notice”). The March 2020 Notice limited the hearing of civil matters to certain enumerated categories applicable to Public Health and Safety and COVID-19, and to urgent and time-sensitive motions and applications in civil matters, where immediate and significant financial repercussions may result if there is no judicial hearing.

[4] The May 2020 Notice supersedes the previous provincial Notices issued between March 15, 2020 to May 5, 2020 relating to the COVID-19 crisis (except the Notice regarding the Suspension of Small Claims Court Operations), and thereby supersedes the March 2020 Notice. The May 2020 Notice lists, in section D.1, categories of civil matters that are deemed urgent and therefore may be brought effective May 19, 2020. These are matters related to Public Health and Safety and COVID-19 (section D.1.a), or Family and Child Protection Matters (section D.1.b.). The Plaintiff does not submit that the Motions come within these categories, but rather submitted that the Motions fall within section D.1.c.i., which allows for the immediate scheduling of the following:

Urgent and time sensitive motions and applications in civil and commercial list matters, where immediate and significant financial repercussions may result if there is no judicial hearing.

[5] I pause to observe that with the May 2020 Notice, the Toronto Region issued a Notice to the Profession setting out the “Toronto Expansion Protocol for Court Hearings During the COVID-19 Pandemic”. This Toronto Region Notice provides that in addition to urgent matters, the Toronto Region will hear, amongst other things, opposed short motions and applications to a judge or master after review by a judge in writing before being scheduled.[^1] The Plaintiff does not submit that the Motions fall within this category of motions currently permitted to be scheduled.

[6] The Plaintiff submitted in its request that the Injunction Motion is urgent because it “addresses the potential failure of a business in the immediate future” and because it “concerns a line of business, at-home health care for seniors, that has implications for healthcare in the face of COVID-19”. These grounds were expanded upon at the case conference.

[7] The Plaintiff is a franchisor for franchises that provide home-care services to elderly and special needs clients. The parties submitted that the Plaintiff had franchise arrangements with fourteen franchisees. The current action involves claims by the Plaintiff franchisor against eleven of its franchisees who no longer pay royalties. The parties disagree regarding whether the Plaintiff has terminated these Defendant Franchisees or whether they have repudiated their franchise agreements, but all agree that they have no continuing relationship with the Plaintiff.

[8] In its Statement of Claim, the Plaintiff seeks monetary damages arising from the alleged breach of the franchise agreements. The Plaintiff also seeks a declaration that the Defendant Franchisees are in breach of their obligations under their franchise agreements and an “interim and interlocutory injunction requiring the Defendants to comply with the obligations under their respective Franchise Agreements until final disposition of the underlying action”: para. 1. The relief sought by the Plaintiff in its Injunction Motion would effectively determine the core issue in this action which is whether the Defendant Franchisees are liable to the Plaintiff in monetary damages under their franchise agreements.

[9] The material filed showed that the dispute between the Plaintiff and the Defendant Franchisees can be traced to September 2019. On September 25, 2019, the Plaintiff’s then-counsel delivered a letter to the Defendant 8200483 Canada Inc. (“8200483 Inc.”) threatening to terminate the franchise agreement and proposing settlement terms. The Plaintiff stated through counsel that it was prepared to pursue the Defendant Franchisee for “injunctive relief on an urgent basis to compel compliance with the foregoing, damages for lost royalties, and other relief.” The Plaintiff purported to terminate the franchise agreement with 8200483 Inc. by letter dated September 27, 2019.

[10] There was no dispute that the injunctive relief that the Plaintiff now seeks to schedule immediately on an urgent basis was first threatened by the Plaintiff in September 2019. It was said then to be urgent but was not brought until several months later.

[11] The Plaintiff’s principal submission was that the ongoing royalty fee dispute is causing it legal expense, financial detriment, and uncertain economic viability. This does not, in my view, satisfy the requirement of urgency necessary to implement immediate scheduling in accordance with the May 2020 Notice. This royalty fee dispute does not involve the return of confidential franchise information, trade secrets, or client lists, as is sometimes seen in such cases, that will expand the issues between the parties, perhaps irreparably, if not addressed immediately. Rather, the parties’ dispute is limited to royalty payments, the same today as it was in September 2019 and the same as it will be until adjudicated.

[12] This is not like those cases found to be urgent and requiring immediate scheduling. These cases include the necessity to address a pending real estate closing affected by the COVID-19 pandemic;[^2] or to restrain trades people from entering a building to renovate a condominium unit during times in which adjacent senior condominium owners were sheltering in place;[^3] or to address a forfeiture of a commercial tenancy terminated during the period in which Ontario issued a declaration of emergency;[^4] or to consider issues arising from living and working conditions at a long-term care facility.[^5]

[13] The Plaintiff’s submission that the Injunction Motion must be heard to ensure long-term health for seniors during the COVID-19 pandemic was denied by the Defendant Franchisees who submitted that they, and not the Plaintiff, tend to the day-to-day needs of the seniors in their care. The Plaintiff stated that if the Plaintiff is no longer financially able to carry on business as a franchisor, and if this has an impact on the three remaining franchisees (not the 11 Defendant Franchisees with whom they have had no relationship since September 2019), and if the remaining franchisees thereby must limit or restrict their services, then the needs of the seniors in their care would be affected. Any such potential harm is speculative. The Defendant Franchisees submitted that the seniors in their care would be in a worse position in this pandemic if the Motions were ordered to proceed as the current priority and undivided focus of the Defendant Franchisees should be the care of their clients. I find that the Plaintiff has not shown any likelihood of interruption in the care of seniors during the COVID-19 pandemic resulting from the Injunction Motion not being scheduled immediately.

[14] And last, the parties agree that the Injunction Motion is not ready to be argued, in any event, making the issue of immediate scheduling premature.

[15] On these grounds, I decline to schedule immediately the Motions for hearing.

B. Timetable

[16] With the concurrence of the parties on timing, I direct that the parties advance the Motions for hearing in accordance with the following Timetable:

(a) The parties shall conduct any examinations of non-parties with evidence material to these pending Motions, including Mr. Norland, under Rule 39.03, by June 26, 2020.

(b) The parties shall conduct any cross-examinations of affidavit evidence filed on these Motions by June 30, 2020.

(c) The examinations and cross-examinations may be conducted virtually, using available videoconference facilities to be arranged by the parties.

(d) The moving parties under each Motion shall deliver their moving party factums by July 17, 2020.

(e) The responding parties under each Motion shall deliver their responding party factums by July 31, 2020.

(f) Any party may seek the scheduling of the Motions for hearing once the Court makes available dates for the adjudication of non-urgent, long, opposed motions.

[17] The requirement of preparation, issuance and entry of a formal order is hereby dispensed with, in accordance with Rule 77.07(6).

Sanfilippo J.

Date: June 11, 2020

[^1]: The Toronto Region Notice also provides that the Court will hear, effective May 19, 2020, Pre-Trial Conferences; consent and unopposed motions and applications made in writing; chambers appointments and case conferences. [^2]: Sibyl Investment Holding Inc. v. Vlachich, 2020 ONSC 2191; Ali v. Tariq, 2020 ONSC 1695. [^3]: York Condominium Corporation No. 419 v. Black, 2020 ONSC 2066. [^4]: Campbell v. 1493951 Ontario Inc., 2020 ONSC 2942. [^5]: Ontario Nurses Association v. Eatonville/Henley Place, 2020 ONSC 2467.