Superior Court Approves Settlement of Franchise Class Action Against A&P

On December 9, 2002, Justice Warren Winkler of the Superior Court of Justice certified an action commenced by Food Basics franchisees against the Great Atlantic & Pacific Tea Company of Canada Ltd. (A&P). The law suit alleged that A&P withheld rebates from its franchisees contrary to its franchise agreement. Justice Winkler also granted an injunction against A&P to restrain misconduct intended to defeat the certification process. On May 11, 2004, the Ontario Court of Appeal denied A&P leave to appeal from the Divisional Court’s March 8, 2004 reasons upholding the certification order.

A trial date of October 12, 2004 was set. On October 4, 2004, Regional Senior Justice Winkler approved a settlement of the action pursuant to which A&P paid compensation and acquired the franchises of the plaintiffs for the sum of $41.5 million.

The franchisees were represented by John Sotos and David Sterns of Sotos Associates LLP. Thomas G. Heintzman, Q.C. and Jonathan Lisus of McCarthy Tétrault LLP acted as counsel to Sotos Associates. A&P was represented by Larry Lowenstein and Mark Gelowitz of Osler, Hoskin & Harcourt LLP and Derek Bell of Bennett Jones LLP.