Class Dismissed: B.C. Court of Appeal Affirms Summary Judgment Decision Dismissing Proposed Class Action

On February 13, 2025, the B.C. Court of Appeal dismissed an appeal from summary judgment in Latifi v. The TDL Group Corp., confirming that a claim for conspiracy to injure will fail where the predominant purpose of an agreement was to benefit the parties to it, even if the agreement may also injure a third party. The B.C. Court of Appeal confirmed that the application judge had not erred in granting summary dismissal of the action on the basis of the defendant’s uncontroverted evidence undermining an essential element of the claim. 

The B.C. Supreme Court Decision

The Defendant, a franchisor of quick-service restaurants, previously included a “No-Solicitation Clause” in its franchise agreements prohibiting franchisees from soliciting each other’s employees absent the Defendant’s prior written consent. (The Defendant ceased enforcing and including this clause in new franchise agreements in September 2018.)

The Plaintiff, a former employee of a franchisee, commenced a proposed class action on behalf of all current and former employees of the Defendant or any franchisee. After most of the Plaintiff’s claims were struck for failing to disclose a cause of action, the Plaintiff continued to advance a claim for predominant purpose conspiracy. He alleged that the No-Solicitation Clause in the franchise agreements constituted a conspiracy and that its predominant purpose was to injure employees.

The B.C. Supreme Court concluded that it must look at the purpose of the agreement, rather than its effect when considering whether there was a predominant purpose to injure. The Defendant’s uncontradicted evidence that the predominant purpose of the No-Solicitation Clause was not to harm employees, but to benefit franchisees, in turn benefiting the Defendant’s business. (The Defendant also denied that the No-Solicitation Clause caused any harm to employees, but that question was not at issue on the application.) As a result, the B.C. Supreme Court granted the Defendant’s summary judgment application and dismissed the action.

The B.C. Court of Appeal Decision

The B.C. Court of Appeal found no errors in the application judge’s reasons, and affirmed the decision dismissing the Plaintiff’s proposed class action. It confirmed that to establish predominant purpose conspiracy, harm must be the predominant purpose of the agreement, not merely an ancillary purpose or a resulting effect. The tort will not be made out if harm results from acts pursued predominantly out of self-interest, or from an agreement with the predominant object of benefiting the parties to the agreement, even in cases of clear injury to a third party. The B.C. Court of Appeal accepted the finding that the No-Solicitation Clause had a valid business purpose and that intent to harm employees could not be inferred from the evidence.

The authors include counsel for the Defendant in the B.C. Supreme Court and the B.C. Court of Appeal.