1250264 Ontario Inc. v. Pet Valu Canada Inc.
2012 ONSC 4317
Superior Court of Justice, Strathy J. July 27, 2012
Civil procedure — Class proceedings — Opting out — Plaintiff bringing class action on behalf of franchisees — Organization of franchisees
attempting to kill class action by mounting campaign to intimidate class
members and provide them with misinformation about action — Actions
of organization subverting opt-out process — Opt-out notices received
after start of campaign set aside.
The plaintiff brought a proposed class action on behalf of franchisees of the
“Pet Value” chain. The action was certified as a class proceeding. The plan of
proceeding provided that communications with class members before the
expiry of the opt-out period were subject to the direction of the class proceedings judge, but did not purport to curtail the right of other franchisees or the
Canadian Franchise Council (“CFC”) to communicate concerning the class
action. The executive of the CFC was opposed to the action. A group calling
itself Concerned Pet Value Franchisees (“CPVF”), consisting mostly of the
executive of the CFC, was formed. The CPVF used a telephone blitz, calling
every franchisee to encourage them to opt out of the class action, and set up a
website. After that, there was a spike in the delivery of opt-out forms. The
plaintiff brought a motion for an order setting aside the opt-out notices on the
ground that the process had been compromised.
Held, the motion should be granted.
The opt-out process had been subverted by the actions of the CPVF. The
CFC, wearing the hat of the CPVF, mounted a campaign designed to kill the
class action. By identifying the opt-outs on its website, the CPVF attempted to
put pressure on those who had not opted out. A franchisee who did not pledge
allegiance to the CPVF and promise to opt out could reasonably conclude that
he or she would be outed as part of an identified minority who were pursuing
their own selfish interests, that they would be easily identified by the franchisor and that their participation in the class action might prejudice them in
the future. The website contained misinformation, disparaged class counsel
and did not attempt to provide any form of informational balance. The appropriate remedy was to set aside opt-out notices received after the start of the
Cases referred to
1176560 Ontario Ltd. v. Great Atlantic & Pacific Co. of Canada (2004), 70 O.R.
(3d) 182,  O.J. No. 865, 184 O.A.C. 298, 50 C.P.C. (5th) 25, 129 A.C.W.S.
(3d) 455 (Div. Ct.), affg (2002), 62 O.R. (3d) 535,  O.J. No. 4781, 
O. T.C. 963, 28 C.P.C. (5th) 135, 118 A.C.W.S. (3d) 530 (S.C.J.) [Leave to appeal
granted (2003), 64 O.R. (3d) 42,  O.J. No. 1089, 169 O.A.C. 343, 121
A.C. W.S. (3d) 655 (Div. Ct.)]; 1250264 Ontario Inc. v. Pet Valu Canada Inc., 
O.J. No. 1618, 2011 ONSC 287, 16 C.P.C. (7th) 52, 208 A.C. W.S. (3d) 25 (S.C.J.);
Bywater v. Toronto Transit Commission (1999), 43 O.R. (3d) 367,  O.J. No.
1402, 83 O. T.C. 12, 28 C.P.C. (4th) 307, 87 A.C. W.S. (3d) 878 (Gen. Div.); Currie v.
McDonald’s Restaurants of Canada Ltd. (2005), 74 O.R. (3d) 321,  O.J. No.
506, 250 D.L.R. (4th) 224, 195 O.A.C. 244, 7 C.P.C. (6th) 60, 137 A.C. W.S. (3d) 250
(C.A.); Fairview Donut Inc. v. TDL Group Corp.,  O.J. No. 4720, 172
A.C.W.S. (3d) 609 (S.C.J.); Mangan v. Inco Ltd. (1998), 38 O.R. (3d) 703,