



COURT OF APPEAL FOR ONTARIO

CITATION: Zwaniga v. Johnvince Foods Distribution
    L.P., 2013 ONCA 271

DATE: 20130426

DOCKET: C56119

Laskin, Cronk and Hoy JJ.A.

BETWEEN

David Zwaniga and Jennifer Zwaniga

Plaintiffs (Appellants)

and

Johnvince Foods
    Distribution L.P.
and Revolution
    Food Technologies Inc.

Defendants (
Respondent
)

Alan A. Farrer, for the appellants

Jill M. Knudsen, for the respondent, Johnvince Foods
    Distribution L.P.

Sonu Dhanju-Dhillon, for Revolution Food Technologies
    Inc.

Heard: April 24, 2013

On appeal from the judgment of Justice Paul Perell of the
    Superior Court of Justice, dated September 19, 2012.

By the Court:

[1]

The appellants, David and Jennifer Zwaniga, appeal the September 19,
    2012 summary judgment of Perell J., dismissing their claims against the
    respondent, Johnvince Foods Distribution L.P.

[2]

The appellants argue that:

(1) the respondents motion was not properly the subject of a
    Rule 20 motion;

(2) the motion judge erred in concluding that the respondent
    was not a franchisors associate within the meaning of s. 1(1) of the
Arthur
    Wishart Act
, S.O. 2000, c. 3 (the AWA); and

(3) the motion judge failed to consider the legal impact of the
    representations made by the respondent in conjunction with Revolution Food
    Technologies Inc.s marketing of machines intended to vend products supplied by
    the respondent.

[3]

Briefly, the background is as follows.

[4]

The respondent distributes Planters® peanuts in Canada. Revolution Food
    Technologies Inc., an unrelated third party, approached the respondent with the
    idea of a vending machine program.  Revolution wished to sell vending machines
    to individual distributors who would become members of a buying group that
    would buy through Revolution the products dispensed by the vending machines.

[5]

The respondent and Revolution entered into a supply agreement, which
    provided that the respondent would supply Planters® products and granted
    Revolution a non-exclusive licence to display Planters® trademarks and logos. 
    The respondent could terminate the supply agreement for cause or upon notice.

[6]

Revolution was responsible for developing and running the distribution
    program and made all the day-to-day and long term decisions with respect to the
    distributors. The respondent did not lead, regulate, direct, oversee or govern
    Revolution or its distributorship program.

[7]

Revolution represented to prospective vending machine owners/
    distributors that they were free to stock their machines with any products they
    wished, and were not restricted to Planters® products.

[8]

The program was not a success.

[9]

The appellants commenced a proposed class action against both the respondent
    and Revolution claiming that class members were induced to purchase vending
    machines by material misrepresentations.  Before the proposed class proceeding
    had been certified, the respondent brought a motion for summary judgment under
    Rule 20, seeking to have the action dismissed against it.  The motion judge
    granted summary judgment dismissing the action against the respondent.

[10]

With
    respect to the first argument raised by the appellants, the motion judge
    correctly applied this courts decision in
Combined Air Mechanical Services
    v. Flesch
, 2011 ONCA 764 in determining that it was an appropriate case
    for summary judgment. We see no basis for disturbing the motion judges
    conclusion that he could achieve a full appreciation of the evidence and the issues
    and there were no genuine issues requiring a trial. As the motion judge noted,
    the record was largely documentary and there were few, if any, contested
    factual issues.

[11]

As
    to the appellants second argument, we note that, only for the purposes of the
    summary judgment motion, it was conceded that the distribution program was a
    franchise.  This placed the appellants case at its highest, and permitted the
    motion judge to narrow his analysis with respect to the AWA to a single
    dispositive issue, namely whether or not the respondent was a franchisors
    associate within the meaning of that term in the AWA.

[12]

We
    agree with the motion judge, for the reasons he provided, that the respondent
    did not, directly or indirectly, control Revolution for the purposes of the definition
    of franchisors associate in the AWA and, therefore, was not a franchisors
    associate. The provisions in the supply agreement that the appellants point to
    on appeal as indicative of
de facto
control  for example, the
    requirement that Revolution meet annual targets and the provision that
    Revolutions marketing materials were subject to approval by the respondent
    with respect to the use of the Planters trademark  are, in our view,
    provisions reasonably included to protect the licensed trademarks and ensure
    that they were not licensed to enterprises that did not generate a meaningful
    return.  They do not establish direct or indirect control of Revolution by the
    respondent.

[13]

There
    is no merit in the appellants third ground of appeal. Before the motion judge,
    the appellants unsuccessfully argued that the respondent was liable for
    misrepresentations made by Revolution because it was Revolutions partner or a
    franchisors associate.

[14]

On
    the record before the motion judge, the only independent statements by the
    respondent to the appellants were those in a Letter of Introduction from the
    respondent that Revolution included in the marketing materials that Revolution
    provided to the appellants. In that letter, the respondent invited prospective distributors
    to seriously consider the opportunity to acquire a vending machine. The
    appellants concede that they abandoned their pleaded claims of independent
    fraudulent and negligent misrepresentations against the respondent.

[15]

The
    appellants cannot argue their abandoned claims on this appeal. Indeed, in the
    course of oral submissions, counsel for the appellants acknowledged as much and
    made clear that, in raising this third argument, the appellants only wished to
    assert their position that a judicial determination binding on other purchasers
    of vending machines as to whether the respondent is liable for independent
    fraudulent or negligent misrepresentations in relation to the marketing of
    Revolutions vending machines had not been made.

[16]

In
    the result, this appeal is dismissed.

[17]

The
    respondent is entitled to its costs of the appeal on a partial indemnity scale
    fixed at $8,250, inclusive of disbursements and applicable taxes.

Released: Apr 26, 2013                                                   John
    Laskin J.A.

E.A.
    Cronk J.A.

Alexandra
    Hoy J.A.


