Superior Court Certifies Food Basics Class Action

On December 9, 2002, Justice Warren Winkler of the Ontario Superior Court of Justice certified a class action on behalf of 70 Food Basics franchisees against The Great Atlantic and Pacific Tea Company of Canada Limited (A&P). The franchisees allege that A&P has withheld rebates received by A&P from its suppliers and which they claim to be entitled under their franchise agreements. They seek an accounting with respect to rebates. The action was commenced in April 2002, and the motion was argued on November 18, 19 and 20 and certified on December 9, 2002.

Justice Winkler did not accept A&P’s arguments that a class action was not the preferable procedure and that the plaintiffs were in conflict of interest with other members of the class and would not fairly and adequately represent them. The judge also granted the plaintiffs’ request for extraordinary relief against A&P. The court found that A&P had engaged in a course of conduct designed to intimidate and coerce franchisees into releasing it from the lawsuit. The judge restrained A&P from circulating a new franchise agreement or seeking a release from any franchisee during the opt-out period and also restrained A&P from communicating with the franchisees other than in the ordinary course of business.

John Sotos and David Sterns of Sotos Associates are solicitors for the class members. Thomas Heintzman, Q.C., Jonathan Lisus and Aleks Mladenovic of McCarthy Tétrault LLP acted for Sotos Associates. Larry Lowenstein, Joseph Starkman and Derek Bell of Osler, Hoskin & Harcourt LLP represented A&P.