When several franchisees have similar grievances against their common franchisor, but the facts underlying their claims may differ from one to the next, do they each necessarily have to bring a separate action, or can they join together in a common action?
This was the question asked by the Honourable Justice Suzanne Gagné of the Quebec Superior Court in her June 16 decision in Monger et als. v. Groupe Qualinet inc.(which you can read by click here).
In this case, 32 franchisees and former franchisees of Groupe Qualinet inc., specializing in dry cleaning and disaster recovery, instituted a joint action against their franchisor to claim damages for misrepresentation, fraudulent misrepresentation and various breaches of express and implied obligations.
Faced with this joint action, the franchisor filed a motion to split the joint action into separate individual actions for each franchisee.
In support of its motion, Groupe Qualinet inc. argued that Qualinet's dry-cleaning and disaster-cleaning franchises were two completely different systems, that franchise agreements were specific to each system, that representations to prospective franchisees necessarily varied from one to the other and, finally, that each plaintiff's case was distinct and would require separate proof.
In opposition to their franchisor's request, the franchisees pointed out that the Code of Civil Procedure allows several plaintiffs to join their actions when there is sufficient connection between the claims, that they were dealing with the same franchisor, who was accused of the same breaches, and that, for them, severing their actions would be tantamount to a denial of justice, since they individually did not have the financial capacity to complete their case.
According to the Honourable Justice Gagné, article 143 of the Code of Civil Procedure, which allows several plaintiffs to join their claims in a common action, " must be given a broad and liberal interpretation, based on the circumstances of each case ".
In this context, she therefore made the following highly instructive comments regarding the circumstances in which several franchisees may join their actions against their common franchisor:
"16] It is well established that the purpose of joining claims is, among other things, to speed up proceedings and avoid the multiplicity of actions and the risk of contradictory judgments.
[17] As Madam Justice Marie-Anne Paquette pointed out in Rayan Pharma inc. v. Piciacchia :
[35] To be joined, the actions need not raise identical questions of law. They must be related. The facts must be similar enough not to require the parties to present totally separate evidence.
[18] We find this connection here.
[19] In particular, the breaches alleged against the defendants are the same. The persons at Qualinet who allegedly made the false representations are also the same.
[20] On its website, Qualinet presents itself as a single franchise network:
(..) In recent years, a large network of over 80 franchisees has enabled the Qualinet Qualinet brand brand to reach all regions of the province, offering convergent services. (.) there's a Qualinet team ready to answer your call.
[Boldface added.]
[21] In short, the claims have the same legal basis and a common factual framework. They raise the same points of law. The Court sees no obstacle to combining them in a single claim.
[22] With respect to the defendants' right to a full and complete defence, there is nothing to prevent them from filing separate defences with respect to each of the franchise systems.
[23] Finally, joinder of claims enables plaintiffs to exercise their right to sue effectively.
[24] In this regard, it is worth quoting the second paragraph of the preliminary provision of the C.C.P.:
The Code aims to enable, in the public interest, the prevention and settlement of disputes and litigation, using procedures that are appropriate, efficient, fair and participatory. It also aims to ensure the accessibility, quality and speed of civil justice, the fair, simple, proportionate and economical application of the procedure and the exercise of the rights of the parties in a spirit of cooperation and balance, as well as respect for the people who contribute to justice.
[25] In addition, the Court agrees with Justice De Grandpré in Axa Assurances inc. v. Crane Canada Co:
[11] It would be unreasonable to split the appeals, because it would necessarily result in an unnecessary multiplication of hearing days and costs for the parties; indeed, it is unlikely that the same judge would hear the 24 separate cases.
[12] Moreover, the costs to the judicial system would be disproportionate to the relative importance of these private recourses. Sound management of court time requires an awareness that time granted to one litigant is time taken away from another. Resources must be managed with the whole and the general interest in mind.
[26] The circumstances therefore lend themselves to joining the claims. To conclude otherwise would lead to a multiplication of proceedings, increased costs for all concerned, and the risk of contradictory judgments. This would in no way serve the ends of justice, and would run counter to the principle of proportionality."
For these reasons, the Superior Court rejected the franchisor's motion to divide the franchisees' joint action into separate individual actions.
Jean H. Gagnon, Ad.E.
Lawyer | Mediator | Arbitrator
