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By: Anthony Pugh, Law Works 

Editor: Ben Hanuka, Law Works 

In Angus Inc. v. Beretta Farms Brands Ltd., an April 24, 2020, decision of the Ontario Superior Court of Justice, the court refused to strike most parts of the plaintiff’s claim against one of the defendants, the franchisor of Harveys, which was based on economic torts. 

Key facts 

The plaintiff, the franchisor of the Hero Burger franchise chain, had a contract with the Berretta Farms defendants for the supply of natural beef.  The contract prohibited Berretta Farms from dealing with any other quick-service restaurant in Ontario.  Its initial term was to the end December 2020. 

In July 2019, Berretta gave notice that it intended to terminate the agreement within 90 days.  However, the contract had no such termination provision.  After Hero Burger disputed this termination, Berretta purported to raise prices by 38%, which also was not permissible under the contract. 

Hero Burger sought $7.5 million from Harveys for inducing breach of contract, interference in economic relations, “misrepresentation in the marketplace”, as well as $500,000 in punitive damages. 

The court refused to strike the pleading, except for the misrepresentation in the marketplace claim 

The court held that Hero Burger pled all the essential facts necessary for the legal claims of inducing breach of contract and interference in economic relations.  While some allegations where implicit in the pleading, the court applied a generous reading of the pleading.  

Harveys argued that Hero Burger’s pleading was based on speculation.  The court rejected this argument.  At this stage, the plaintiff is only required to plead the required facts and it is not required to prove those facts.  

About the “misrepresentation in the marketplace claim”, the court held that this was not a cause of action.  It assumed that Hero Burger intended to plead injurious falsehood, but Hero Burger did not plead the essential legal elements.  It therefore struck this claim but granted to Hero Burger leave to amend the claim.

Anthony Pugh Associate

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Ben Hanuka
JD, LLM, CS (Civ Lit), FCIArb, of the Ontario and BC Bars

Highlights:

  • JD, LLM (Osgoode '96, '15), C.S. in Civ Lit (LSO), Fellow of CIArb, member of the Bars of Ontario ('98) and BC ('17)
  • Principal of Law Works PC (Ontario)/LC (British Columbia)
  • Acted as counsel in many leading franchise court decisions in Ontario over the past twenty-five years, including appellate decisions.
  • Provided expert opinions in and outside Ontario
  • Presented at and chaired numerous franchise and civil litigation CPD programs for over 20 years
  • Chair of OBA Professional Development (2005-2006) - overseeing all PD programs
  • Chair of Civil Litigation Section, OBA (2004-2005)

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Mendoza v. Active Tire & Auto Inc., 2017 ONCA 471

1159607 Ontario v. Country Style Food Services, 2012 ONSC 881 (SCJ)

1518628 Ontario Inc. v. Tutor Time Learning Centres LLC (2006), 150 A.C.W.S. (3d) 93 (SCJ, Commercial List)

Bekah v. Three for One Pizza (2003), 67 O.R. (3d) 305, [2003] O.J. No. 4002 (SCJ)