Law Times

Law Times • January 14, 2013 Page 7 COMMENT Harper's troubles mount as First Nations head to court P rime Minister Stephen Harper is in over his head as troubles brew with Canada's First Nations peoples. It all revolves around the courts and Harper's determination to ride roughshod over constitutional obligations to consult with First Nations before changing laws that affect them and their treaty rights. The nation was shocked last week when the Federal Court ruled that all of Canada's Métis and off-reserve Indians, as well as the Inuit, have the same rights and standing in the Constitution as treaty Indians. The numbers are somewhat fuzzy until the government issues final figures from the last census, but we're talking about 600,000 off-reserve Indians, anywhere from 50,000 to 400,000 Métis, and maybe 40,000 Inuit. The numbers are overwhelming, the projected government costs staggering, and the paperwork monumental. But that's just the start. There's more to come from the courts and the smart lawyers aboriginals have hired to go after Harper. Trying to bully hunger-striking aboriginal leaders into submission or using trained, pro-Harper letter writers to fill the editorial pages and bloggers to run Internet smear jobs won't work anymore. Leaders of two better-off Alberta reserves arrived in Ottawa last week to take Harper to Federal Court again on another issue. They want the Federal Court to do what opposition politicians in Parliament tried but failed to do: force the Lake First Nation, said the Conservative government to trying to stop reopen two omnibus bill laws The Hill groups aren't In fact, the band development. adopted last year that rode owns an oil and gas company. roughshod over environmenStopping exploitation of tal and First Nations' treaty the resources isn't in the comconcerns. munity's commercial interest. The Indians from the MikiUntil the government changed sew Cree First Nation and the the law, residents felt they had Frog Lake First Nation came strong environmental regulawith lawyer Robert Janes of Janes Freedman Kyle Law Corp. Richard Cleroux tions in place. Stanley spoke eloquently Steve Courtoreille of the about "Mother Earth" and Mikisew Cree First Nation told a news conference in Ottawa the idea isn't how humans are only "stewards" of what to overturn any laws but rather to force she has given us. "The federal government the Harper government to live up to its is trying to take away our ability to play constitutional responsibility to consult that role," he said. Janes insisted "there is no way we are First Nations communities on issues that affect them. That, of course, is what Harp- attacking the right of Parliament to pass laws" but only "the way the government er should have done in the first place. According to Courtoreille, "the gov- went about passing legislation without ernment had a duty to consult us on the consulting First Nations as required under changes to the Fisheries Act, the Canadian Treaty 6 and Treaty 8." Treaty 6 covers 18 First Nations in AlEnvironmental Assessment Act, and the berta, Saskatchewan, and Manitoba; TreaNavigable Waters Act. It did not." He added: "Our goal is to ask the court ty 8 covers 44 First Nations in Alberta. The lawyer says all aboriginals want is to confirm that what the government did is not legal. And we want the court to or- for the Harper government to come back der the government to set up consulting "with an open mind," address their concerns, and restore the environmental prowith us." In 2001, the Mikisew won a land- tections that used to be in place. It will be up to the Federal Court to mark decision when the court ordered the government to consult with it before make the call. Indications are that Harper's conflict building a road through Wood Buffalo National Park. The Mikisew won again with aboriginals will get worse before it gets better, especially with the extent of on consultation in 2005. "How many times must we go to court commercial and resource development to ask the government to respect its own Harper is planning on First Nations lands. This could be Oka, Que., all over again if laws?" Courtoreille asked. George Stanley, who spoke for the Frog things get nasty out of court. For instance, Chinese mining giant MMG Ltd. is moving in on Nunavut with five mines, 350 kilometres of roads, dozens of bridges, and housing for as many as 1,000 newcomers. The project also involves drainage of a northern lake and fuel depots all over the place. The cabinet structure reflects the federal government's attitude towards protecting aboriginal rights. The federal Indian Affairs minister is also responsible for northern development. Talk about a conflict of interest. In British Columbia, another First Nation is preparing its own court case in connection with Harper's plan to run a huge oil pipeline to the coast to sell off raw bitumen to Chinese companies overseas. Who needs to consult the Indians over oil spills? In the Saguenay-lower north shore region of Quebec, there's a vibrant Métis community. They now have full status in light of last week's Federal Court decision. They'll be going to court to prove they've been around as Métis with full constitutional rights ignored by the government for 400 years. Historians, not just lawyers, will be required. This is only the beginning. Some people thought immigration and communications law would be the major specialties of the future for graduating law students. Guess again. Lawyers might want to write to Harper to ask if he needs another good First Nations specialist. LT Richard Cleroux is a freelance reporter and columnist on Parliament Hill. His e-mail address is richardcleroux@rogers. com. Franchisors ignore Ontario's Wishart Act at their peril BY STEVEN GOLDMAN For Law Times T Failure to deliver a disclosure document in compliance with the act or providing misleading, inadequate or late disclosure can have serious financial implications for the franchisor or its associate. Under certain circumstances, this includes the right of the franchisee to rescind the franchise and related agreements without penalty. The franchisee can exercise this right up to either 60 days or two years after entering into the franchise agreement, depending on whether there was simply inadequate disclosure or a failure to disclose in its entirety. If the franchisee properly exercises its rescission right, within 60 days the franchisor must refund the money paid by the franchisee; purchase the franchisee's remaining inventory, supplies, and equipment; and compensate the franchisee for losses in acquiring, setting up, and operating the franchise. As a result, the franchisor and its associates could be liable for hundreds of thousands, if not millions, of dollars even in situations where it received only a fraction of that sum. This is often a shock to franchisors who never understood their liability for failing to comply with the disclosure requirements under the act. Also, under s. 7 of the act, if the franchisee suffers any loss as a result of misrepresentation in the disclosure materials or the statement of material change, it may have a right of action for damages against the franchisor and its associate, agent, broker, and every person who signed the disclosure documents at issue. Seeking professional legal advice, then, is key in this little-understood area of law. LT u SPEAKER'S CORNER he Canadian Franchise Association says there are more than 78,000 franchise locations in Canada operating under 1,200 franchise systems and employing more than one million people. However, the failure, including by lawyers, to understand franchisors' obligations under the Ontario Arthur Wishart Act results in lots of legal claims against them and their counsel. The act attempts to protect Ontario franchisees before they invest in a franchise, clarifies a duty of good faith and fair dealing on both franchisees and franchisors during their contractual relationship, and imposes a myriad of legal obligations on franchisors. The act applies to any franchise business operated in whole or in part in Ontario and defines franchise very broadly. Businesses that may not have thought themselves franchises could be at risk of unknowingly being subject to the act. In fact, some business relationships such as dealerships, licences under licence agreements, and distributorships may be caught under the definition of franchise in the act. A lawyer familiar with the act should make a careful assessment to determine whether the business is a franchise under the legislation in any business relationship where the business of the franchisee, licensee, dealer or distributor operates in whole or in part in Ontario and involves the licensing of a trademark or business format. Section 5 of the act requires a franchisor to provide a prospective franchisee with an accurate, clear, and concise disclosure document at least 14 days before the prospective franchisee either signs an agreement or makes a payment or before any renewals or extension of the franchise agreement, whichever comes first. The disclosure requirements set out in s. 5 and the regulations are extensive and quite technical and frequently run hundreds of pages in length. The content of the disclosure document must set out the following: • Allmaterialfactsasprescribedintheregulations. • Allproposedfranchiseagreementsandagreements related to the franchise. • Financialstatementsasprescribed. • Statementsasprescribedforthepurposesofassisting the prospective franchisee in making informed investment decisions. • Allotherinformationandcopiesofdocumentsas per the act and regulations. Besides providing disclosure at least 14 days prior, the franchisor must also disclose a statement of material change as soon as possible after the change occurs and before signing an agreement or making a payment. The disclosure document must be one document at one time, delivered personally, by registered mail or prescribed method to the prospective franchisee. The act recognizes that not all investors require such extensive and detailed disclosure. As a result, there are exemptions from the requirement to deliver a disclosure document. Some examples include: • Sophisticatedinvestor:applicableiftheprospective franchisee invests at least $5 million over one year. • Fractional franchise: applicable if the anticipated sales of the franchised goods or services do not exceed 20 per cent in relation to the total sales of the business. • Small franchises: applicable if the total annual investment is less than $5,000, if the franchise agreement is for one year or less and does not involve the payment of a non-refundable franchise fee or if the multilevel marketing or direct-selling provisions of the Competition Act govern the franchisor. www.lawtimesnews.com Steven Goldman of Goldman Hine LLP is a litigation lawyer who also acts as a mediator and arbitrator in franchise and other commercial disputes. He has also planned and implemented commercial reorganizations and is former president and chief executive officer of Speedy Auto Service and Minute Muffler in Canada.

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