Class Action Update May 13, 2010
To all Sunoco retailers operating under a Retail Franchise Agreement:
This is an important notice regarding the lawsuit brought on behalf of Sunoco retailers operating under a Retail Franchise Agreement. Please read it carefully.
A lawsuit has been started against Suncor Energy Products Inc. and Suncor Energy Inc. (“Suncor”). The lawsuit is brought as a ‘class action’ and seeks to represent all Sunoco retailers operating under a Retail Franchise Agreement (“Sunoco retailers”). If you are or were a Sunoco retailer at any time since January 18, 2008, this notice will be important to you. The lawsuit asserts that the Sunoco retailers have the right under Ontario’s franchise law, known as the Arthur Wishart Act (Franchise Disclosure) 2000 (the “Wishart Act”), to rescind their Retailer Franchise Agreement (“RFA”) within two (2) years of signing their most recent RFA. A copy of the statement of claim can be found at www.sotosllp.com/class-actions/suncor. The statement of claim explains in detail what the right to rescind is and why it is asserted that the right is available to you.
Rights of rescission under the Wishart Act
In order to benefit from the lawsuit, it is important that you rescind the RFA. This must be done within two years of signing the RFA. This means, for example, that if you signed the RFA on September 1, 2008, you must rescind it before September 1, 2010. If you rescind your RFA within two years of signing it and the court finds that you had a valid right to rescind, the court may also determine if you are entitled to compensation, including the
refund of royalties paid to Suncor. Any amounts awarded to you would be subject to legal fees of up to 25% of the value of those amounts, if such fees are approved by the court.
If you do not rescind your RFA within two years of signing it, you may not be entitled to compensation in the class action even if it is successful.
The court has not yet ruled on whether you have the right to rescind under the Wishart Act. This will be decided in the lawsuit.
Also, the court has not yet ruled on whether the lawsuit can proceed as a class action. This will be decided in a hearing known as a certification hearing which will take place on November 15-16, 2010 in Toronto.
Suncor’s position on lawsuit
Suncor will not prevent you from sending a notice of rescission or discriminate against you if you choose to do this.
However, Suncor denies that you are entitled to rescind your RFA. Suncor will defend the lawsuit. Suncor’s position is that in order to receive payments under the Termination Agreements signed by certain retailers, those retailers must “continue to honour the Agreement until the Termination Date,” and execute a release in which the retailer and guarantor agree not to participate in any class action whatsoever against Suncor. Therefore, Suncor may choose not to make transition payments under the Termination Agreements signed by a retailer which chooses to rescind.
Lawyers for the plaintiff, Sotos LLP, dispute the legal effect of the release on the basis that it is null, void and unenforceable, as described in the statement of claim.
You may wish to seek legal advice regarding these issues. You may choose to consult your own lawyer or a lawyer at Sotos LLP who are willing to provide you with such legal advice at no additional charge to you.
Rescinding the RFA
In order to rescind, you must send a written notice of rescission to Suncor before the two year anniversary of signing the RFA. The notice must state that you wish to rescind the RFA pursuant to the Arthur Wishart Act (Franchise Disclosure), 2000. It must also state the amounts which you claim under section 6(6) of the Wishart Act as explained further in the statement of claim.
Sotos LLP will prepare and send a notice of rescission for you at no charge to you. If you wish them to do this, you should contact them and ask that they do this. If you do not ask them in writing, they will not send a rescission notice on your behalf.
If you have any questions, please direct them to David Sterns email@example.com or call Sotos LLP: (t) 416-977-0007 (f) 416-977-0717.