This proposed class action is brought on behalf of all those who, on August 17, 2008, were franchisees operating in Canada of the restaurant chain of which Mr. Submarine Limited (“Mr. Sub”) was the franchisor. Mr. Sub franchisees were required to purchase certain Ready-To-Eat meats (“RTE Meats”) manufactured by Maple Leaf Foods Inc. and Maple Leaf Consumer Foods Inc. (jointly “Maple Leaf”). In August 2008, some of the RTE Meats were recalled due to possible contamination with the bacteria Listeria monocytogenes. It was reported in the news that Maple Leaf supplied RTE Meats to Mr. Sub.
The allegations are that Maple Leaf owed a duty of care to the franchisees in relation to the production, processing, sale and distribution of the RTE Meats and that it breached its duty of care. The action seeks damages including damages for economic loss of past and future sales and profits. Lerners LLP is co-counsel with Nicholson Smith & Partners LLP.
The plaintiff’s motion for leave to proceed with certification was heard on April 26, 2016 and was immediately followed by the plaintiff’s motion for certification. The motion for certification was heard on April 26 and 27, 2016. The defendants’ motion for summary judgment was also heard on April 27, 2016. By reasons dated October 31, 2016 the plaintiff’s motion for leave to proceed with certification was granted and this action was certified as a class action. By reasons dated November 18, 2016 the defendants’ motion for summary judgment was dismissed and summary judgment was granted in favour of the Class with respect to two common issues regarding the duty of care. The defendants are appealing these orders and seek summary judgment in their favour on the basis that no duty of care was owed and that the claim for economic loss is untenable.
The appeal was heard on October 31, 2017.
The Court of Appeal released its decision on the issues under appeal on April 30, 2018 allowing the Maple Leaf defendants’ appeal regarding whether they owed a duty of care to the Mr. Sub Franchisees. The Court of Appeal reasons for decision conclude that the Maple Leaf defendants did not owe a duty of care to the Mr. Sub Franchisees to protect the franchisees from the economic losses and reputational harm that followed the 2008 Recall. The Court of Appeal also concluded that the scope of the Maple Leaf defendants’ representations or undertakings that the product was fit for human consumption did not extend to provide liability for the reputational damage and economic losses suffered by the Mr. Sub franchisees.
Given the Court’s conclusions on those two questions, the Court of Appeal did not address whether the franchisees’ pure economic loss claims were recoverable. The Court of Appeal’s decision expressly does not effect the Mr. Sub Franchisees’ ability to recover damages for clean-up costs and other costs related to disposal, destruction and replacement of RTE meats.
Class counsel has brought an application for leave to appeal this decision to the Supreme Court of Canada. Written submissions on an application for leave to appeal have been exchanged, and the application now rests with the Supreme Court to consider and determine whether Class counsel will be permitted to bring an appeal of the Court of Appeal’s decision to the Supreme Court on behalf of the Mr. Sub franchisees. In a Judgment released on February 7, 2019, the Supreme Court of Canada granted leave to appeal. Further details on the hearing date will be posted as they become available.
The class is defined as: All persons, whether natural or corporate, who, on August 17, 2008 were franchisees of the restaurant franchise operating in Canada of which Mr. Submarine Limited was the franchisor.
If you think that you are a potential class member, please provide your contact information to Scott Smith at Nicholson Smith & Partners LLP.
If you have already provided your contact information and have since moved, please ensure that your contact information is kept up to date.