05/19/2020
Taylor v Blenz The Canadian Coffee Company Ltd., 2019 BCSC 906 – Amended Pleadings Against Franchisor Did Not Constitute a New Cause of Action
https://www.goldmanhine.com/2020/05/19/taylor-v-blenz-the-canadian-coffee-company-ltd-2019-bcsc-906-amended-pleadings-against-franchisor-did-not-constitute-a-new-cause-of-action/
https://www.canlii.org/en/bc/bcsc/doc/2019/2019bcsc906/2019bcsc906.html
The plaintiffs in this case were franchisees of Blenz franchise coffee shops. They sued their franchisor (Blenz the Canadian Coffee Company Ltd.), a related sublessor of the plaintiffs’ commercial premises (Blenz Coffee Ltd.), and a real estate agent with whom the plaintiffs dealt while trying to sell their businesses.
After becoming franchisees, each of the three plaintiffs tried to sell their businesses and claimed that the defendants’ conduct caused them financial harm. The plaintiffs alleged that the defendants did not extend the head lease for a second five-year term, as allowed. They also alleged that the defendants imposed unreasonable requirements on the prospective purchasers, unreasonably delaying the process.
Initially, the plaintiffs pled misrepresentation, alleging that before signing the franchise agreement, they had been led to believe they were entering into long-term business relationships in which the franchisor would support their growth (para. 16, 17). The plaintiffs then sought leave to amend their pleading to re-frame their claims as breaches of the duty to disclose, “but for” which franchisee-franchisor relationships would not have been formed (para 44). The defendants opposed the amendments as raising new causes of action outside the applicable limitation period. (para. 38).
Justice Warren of the British Columbia Supreme Court reaffirmed that the general approach to applications to amend pleadings is generous and non-technical. He added that granting leave to amend pleadings is highly discretionary, and considers whether it is just and convenient to allow the amendments (para. 32, 33). Justice Warren also clarified that where the proposed amendments do not raise a new case of action, there will be no issue as to the potential expiry of a limitation period.
Justice Warren ultimately held that that the opposed amendments in this case did not raise a new cause of action and instead constituted merely a recasting of the legal characterization of the wrong alleged (para. 44). In dealing with one plaintiff’s amended claim as against her former realtor, Justice Warren found the amendment to constitute increased particularity in the claim, as opposed to a new cause of action altogether.
The generous approach to permitting applications to amend, favored the franchisees and their proposed amendments in this case.
Article prepared by Jonathan Mesiano-Crookston, partner, and Pamela Metani, student-at-law.
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