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- Former Burnaby franchise of Garcha Bros butcher shop found guilty of civil contempt of court
Former Burnaby franchise of Garcha Bros butcher shop found guilty of civil contempt of court
A former franchise of the Garcha Bros Meat Shop was found guilty of civil contempt of court after continuing to operate, despite a court order against it.
SJP Enterprises and Garcha Bros entered into a franchise agreement in March 2017 for a location at 7615 Sixth Street in Burnaby, but Garcha Bros cancelled the agreement in September 2020.
Part of their agreement was that, in the event of a termination, SJP and its operators—Parwinder Kaur and Kuldip Singh—were banned from operating a competing business at the franchised location, or within 10km of the location.
In October 2020, SJP assigned its lease on the property to NumCo, a company that was incorporated just a few days prior, according to a Nov. 17 BC Supreme Court decision.
But NumCo, incorporated in October 2020, was deemed by the BC Supreme Court justice who granted the injunction to be “an alter ego or sham of SJP.”
Like Garcha Bros but not
That month, NumCo began operating at the location as Great Choice Meat and Poultry, with Kuldip Singh and Arshpreet Singh as manager and employee respectively, according to the court.
A couple of weeks later, Garcha Bros filed a notice of civil claim against SJP and Parwinder Kaur, seeking an injunction barring the continued operation of Great Choice. NumCo, Kuldip Singh, Kulwinder Kaur Sandhu, and Arshpreet Singh were all added as defendants later.
And on March 19, 2021, a BC Supreme Court justice signed an injunction order prohibiting the defendants from operating an Indian-style butcher shop within a 10km radius of the franchise location.
That injunction order was appealed, and the BC Court of Appeal granted a stay on March 26, 2021 on the injunction until the appeal could be heard and decided. On Jan. 31, 2022, the Appeals Court dismissed the appeal, and the injunction order was put back in place.
On Feb. 8, lawyers for Garcha Bros wrote to the SJP cohort saying they “possessed evidence that they were contravening the injunction order by offering home delivery and permitting customers to pick up orders at the back door of the franchised location,” BC Supreme Court Justice Lauren Blake wrote in the Nov. 7 decision.
“There was no evidence of a response from the defendants to this email.”
Blake said there was similarly no evidence of a response from the defendants to an April 20 letter from Garcha Bros’ lawyers, and the butcher shop filed a civil contempt application on May 2.
A summary trial, which involves only written evidence, such as affidavits, expert reports, and written arguments, over the original lawsuit was scheduled for September before being adjourned to early this month and ultimately adjourned indefinitely.
Defendants claim they ceased after injunction
NumCo reportedly sold Great Choice to a numbered company for $220,000, under a purchase agreement that allowed the continued use of the Great Choice name, something Garcha Bros said was barred in the injunction.
In early September, Blake wrote, the respondents’ lawyers notified Garcha Bros’ lawyers that they were withdrawing as counsel for all defendants in the contempt proceedings, “citing ‘ethical reasons’ as the reason for their withdrawal.”
The defendants filed their response to the contempt application on Sept. 26, the day before the hearing on the matter. But they applied no new affidavits to respond to those submitted by Garcha Bros, Blake wrote.
Instead, they chose to rely on affidavits by Sandhu and Kuldip Singh that were made in December 2020 and March 2022 respectively.
In their response, they said NumCo only operated while the injunction order was stayed.
“It ceased operating its business after receiving the Court of Appeal reasons. The respondents believed that they were not in contempt of the court order,” the defendants wrote in their response argument.
But Garcha Bros provided evidence that at least three people attended the location and bought meat through the back door.
And in cross-examination, Kuldip Singh “admitted that Great Choice continued operating in February 2022,” Blake said.
Blake found that Sandhu, Arshpreet Singh, and Kuldip Singh all worked at or advised the operation of the Great Choice butcher at the formerly franchised Garcha Bros location, despite a court order against doing so, finding each guilty of civil contempt.
Fines totalling $25,000
Garcha Bros sought a fine of $27,000 for Kuldip Singh, $9,000 for Sandhu, and $7,000 for Arshpreet Singh based on their salaries with NumCo as of November 2020, being worth about six months’ gross wages for each. They also suggested a fine of $20,000 for NumCo.
“Garcha argues that from the outset the respondents, and in particular Kuldip, have flouted the rule of law by engaging in a pattern of willfully and intentionally avoiding their legal obligations,” Blake wrote.
“The respondents have, in my opinion, engaged in contemptuous conduct on an ongoing and intentional basis. Notwithstanding their unsuccessful appeal of the injunction order, they have continued to flout its terms in a pattern of wilful behaviour.”
But Blake rejected the fines suggested by Garcha Bros, instead opting for fines of $5,000 for Kuldip Singh, Sandhu, and Arshpreet Singh and $10,000 for NumCo.
Fines for contempt can be payable to the province or to a charitable organization, and Garcha Bros suggested the fines be paid to Khalsa Aid, a Sikh charity which does humanitarian work in the wake of disasters and in warzones.
But Blake noted that typically if a payment is made to a charity in a contempt case, it is because that charity has been harmed by the contempt, which Khalsa Aid was not.
As such, Blake ordered the payment be made to the province.