Executive Summary: Key Legal and Evidentiary Issues

• Defendant evaded service through misleading addresses and by refusing to instruct counsel to accept service.

• Plaintiffs filed two identical claims due to prolonged and failed attempts at proper service.

• Court validated service under Rule 18.09(a) as the defendant clearly had notice of the claims.

• Defendant’s principal, Mr. Sparrow, had knowledge of the actions and communicated with plaintiff's counsel while obstructing service.

• Motion for validation was necessitated by the defendant’s conduct, not procedural oversight by the plaintiffs.

• Solicitor-client costs of $10,000 awarded due to the rare and exceptional nature of the defendant’s conduct.

Franchise agreement and the first claim

Ryan Vibert, a plaintiff and principal of 726982 NB Ltd., entered into a franchise agreement with Go Oil Canada Inc. in October 2021. Following the plaintiffs’ rescission of the franchise agreement, the defendant failed to provide the full reimbursement and compensation required by the Franchise Act. As a result, on or about March 28, 2023, the plaintiffs filed a Notice of Action with Statement of Claim ("Claim #1").

Multiple attempts to serve the defendant followed. On June 19, 2023, the plaintiffs sent the claim package via pre-paid registered mail to John Sparrow, the defendant's CEO, at 446 Brooklyn Street, Unit B, Winnipeg, Manitoba—an address listed in franchise documents. This package was returned by Canada Post as “unclaimed” on or about July 17, 2023.

Service attempts and continued evasion

Service attempts included hiring a process server, who tried various addresses, including 100 Innovation Drive and 807 Kanata Street, but none were successful. Mr. Sparrow later communicated with plaintiff counsel Chris Pelkey, promising to provide an address for service. On September 29, 2023, he identified 167 Lombard Avenue, Suite 500 as his address. However, this was found to be an office space used by various companies, with no one aware of Mr. Sparrow or Go Oil.

By December 1, 2023, the plaintiffs were informed that Sotos LLP had been retained by the defendant. After initial contact, Sotos LLP withdrew, and on July 19, 2024, Cassels Brock & Blackwell LLP advised they had been retained. Attempts continued to serve Claim #2, which was filed on June 21, 2024, as a protective measure. Ultimately, on November 20, 2024, counsel for the defendant explicitly refused to accept service and refused to provide an alternative address.

Court’s findings on service

The motion to validate service was filed on December 10, 2024. The hearing was scheduled for January 20, 2025. Although Mr. Sparrow received the Notice of Motion by email and responded, neither he nor anyone on behalf of the defendant appeared at the hearing.

Chief Justice Tracey K. DeWare concluded that the criteria of Rule 18.09(a) of the New Brunswick Rules of Court were met: the document did come to the notice of the person to be served. The defendant had knowledge of the legal proceedings, had retained counsel, and had actively misled the plaintiffs regarding addresses for service.

Costs awarded on solicitor-client basis

The court expressed concern over the defendant’s behavior, citing that Mr. Sparrow’s actions—retaining lawyers while refusing to authorize them to accept service, and providing false addresses—justified rare and exceptional relief. Citing authority including Olasz Scanning v. J & S Mechanical and Doucet v. Spielo Manufacturing Inc., the court emphasized that this conduct abused the judicial process.

As a result, the court ordered costs on a solicitor-client basis in the amount of $10,000.00, emphasizing that the motion was only necessary due to the defendant’s egregious conduct.

Conclusion

The Court validated the plaintiffs’ service of their claims under Rule 18.09(a), determining that the defendant, through Mr. Sparrow, had sufficient notice and deliberately obstructed the process. Given the rare and obstructive nature of the defendant's conduct, the Court awarded solicitor-client costs of $10,000.00, marking its disapproval and ensuring that the plaintiffs were not financially penalized for pursuing their rights under the law.