Things aren’t al­ways what they seem

The Southern Gazette - - Editorial - Rus­sell Wanger­sky Rus­sell Wanger­sky’s col­umn ap­pears in 36 SaltWire news­pa­pers and web­sites in At­lantic Canada. He can be reached at rus­sell.wanger­sky@thetele­ — Twit­ter: @wanger­sky.

This is a col­umn that’s about a court case in Nova Sco­tia, and things not be­ing what they seem.

It’s still in mid-law­suit, so there’s no nice, tidy end­ing — but there is a handy Latin catch­phrase.

It’s good old caveat emp­tor — “Buyer be­ware.” Al­though, in this case, it’s pretty hard for the buyer to know what they’re get­ting into.

The nuts and bolts of the case are that Dale Kaehler and Josee Des­jardins thought they had hired a re­gion­ally rec­og­nized com­pany, Sys­temCare Clean­ing and Restora­tion Ltd., to do a cleanup af­ter a fire. They weren’t sat­is­fied with the work, and when they went to court, they found that they weren’t deal­ing with Sys­temCare, but with a fran­chise of the com­pany. Sys­temCare ar­gued it had no re­spon­si­bil­ity to deal with the is­sue; as the com­pany put it, Kaehler and Des­jardins had sued the wrong en­tity.

It can be con­fus­ing. If a fran­chise owner and a fran­chise op­er­a­tor sign a con­tract be­tween them­selves agree­ing that the op­er­a­tor alone is re­spon­si­ble for any is­sues, that’s some­thing a cus­tomer might not know any­thing about.

In this case, the fran­chise con­tract con­tained a clause that read “The par­ties hereby ac­knowl­edge and agree that each is an in­de­pen­dent con­trac­tor … no party has any au­thor­ity to en­ter into any con­tract, as­sume any obli­ga­tions or to give any war­ranties or rep­re­sen­ta­tions on be­half of any other party.”

But the per­son buy­ing the ser­vice wouldn’t know that. As the judge pointed out, “Dur­ing his ini­tial meet­ing with Mr. Kaehler, Mr. Hub­ley wore a shirt with the Sys­temCare logo. The labour­ers who per­formed the work as well as the on-site su­per­vi­sor wore at­tire with the Sys­temCare logo. The trucks used dis­played the name ‘Sys­temCare’ and bore the Sys­temCare logo. When Mr. Kaehler vis­ited Mr. Hub­ley’s of­fice in Digby, in July 2006, the sign on the front door read ‘Sys­temCare’ and bore the Sys­temCare Logo.”

If some­one pulls up to your door wear­ing a courier com­pany uni­form, driv­ing a ve­hi­cle with the courier com­pany’s logo, and us­ing in­voices and other doc­u­ments em­bla­zoned with the com­pany’s name and colours, you could be for­given for think­ing that’s ex­actly who you’re deal­ing with.

Sys­temCare had a dif­fer­ent ar­gu­ment; the judge says the com­pany’s claim is that, “It has no di­rect in­volve­ment in fran­chises op­er­a­tions, but in­stead fo­cuses on busi­ness de­vel­op­ment of the ‘Sys­temCare’ trade­mark, per­forms qual­ity con­trol, and sup­plies equip­ment and other ma­te­ri­als to its fran­chisees. All in­di­vid­ual fran­chisees op­er­ate in­de­pen­dently and are owned in­de­pen­dently.”

It’s not the first time this sit­u­a­tion has come up — the judge in the case ref­er­enced a 2000 in­ci­dent where H&R Block ar­gued it should not be re­spon­si­ble for the er­rors of a fran­chisee, ar­gu­ing that the fran­chise agree­ment ex­cluded any re­spon­si­bil­ity.

In that case, the judge found, “The cor­po­ra­tion’s ac­tions — its ad­ver­tis­ing, its doc­u­ments, its pre­sen­ta­tion to the pub­lic — would lead any rea­son­able per­son in the plain­tiff’s po­si­tion to be­lieve that the peo­ple op­er­at­ing the Melfort of­fice were act­ing as agents of H&R Block Canada Inc. … H&R Block Canada Inc. set up its fran­chises as ‘H&R Block’. The nat­u­ral as­sump­tion would there­fore be that clients would be deal­ing with an agent of the par­ent com­pany, H&R Block Canada Inc. (and) noth­ing was done to dis­abuse them of this as­sump­tion.”

It’s arisen with other fran­chise agree­ments as well.

There’s a lot left to hap­pen in this par­tic­u­lar law­suit — in­clud­ing any find­ing about whether the work was done prop­erly or not. Even the ques­tion of whether the Sys­temCare par­ent is a party to the suit won’t be fully de­cided un­til there’s a trial.

But it’s cer­tainly food for thought.

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