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www.lexpert.ca/usguide-litigation/ | LEXPERT • December 2017 | 11 a link between Goldhar's management model and his Canadian business," Justice Simmons wrote. "Although the main subject of the article may be the management of an Israeli soccer team, the article makes Goldhar's management model — and its Canadian origins — an integral part of that subject." Justice Pepall, however, reasoned that jurisdiction should attach where Goldhar's reputation had likely suffered most. She also concluded that the analysis of the motions judge, Superior Court Justice Mario Faieta, was faulty. Particularly objection- able was his reliance on Goldhar's undertaking to pay for the travel and accommodation of Haaretz's witnesses from Israel. As Justice Pepall saw it, plaintiffs should not "be permitted to buy passage to a forum" due to "his or her financial he." In March, the Supreme Court of Canada granted leave to appeal in the case. In its materials, Haaretz enunciated three issues of national and international importance: whether the publication of defamatory statements on the internet can give rise to a presumption of jurisdiction in the context of a multi- jurisdiction case; what is the appropriate level of scrutiny for the forum non conveniens part of the test for assuming jurisdiction; and whether, in internet defamation cases, the law of the place of "most substantial harm" rather than the law of the place where the tort was committed should apply. Schabas expects considerable interest from potential interve- nors. "I believe this case highlights issues that the high court in its previous decisions le open for another day," he says. — J.M. 2. Chavdarova v. e Staffing Exchange US companies that want to avoid becoming accidental franchis- ees when entering into commercial arrangements in Canada would be wise to read Chavdarova v. e Staffing Exchange, 2016 ONCA 874. In the 2016 case, the Ontario Superior Court of Justice ruled that, if the relationship between the parties meets the conditions set out in the definition of the word "franchise" in the Arthur Wishart Act, which governs franchise disclosure in Canada, then the relationship between the parties is one of franchisor and franchisee "no matter what terminology the parties have used to describe the relationship." at's potentially a big problem, because while most people think of franchises as fast-food chains, the definition is broad enough to pull in many commercial arrangements — licensing agreements, distribution agreements, agency agreements — and define them as franchise relationships. e Staffing Exchange, or TSE for short, is an employ- ment agency. But it says that, unlike most regular employment agencies, its clients are not organizations looking for employees; they're licensees. According to the company, the clients enter into a brokerage license agreement with the company, which entitles them to share a database called the Multiple Career Listing Service, which e Staffing Exchange compares to the Multiple Listing Service in real estate. Lyudmila Chavdarova signed two agreements with them, one a Certification and Training Agreement, which she received in September 2011, and the other a Brokerage License Agreement, which she received about two weeks later. She paid TSE $29,500 (all dollars Canadian) plus tax for a four-day training course under the certification agreement, which stipulated that anyone taking it would receive 85 per cent of their revenue from place- ments and contracts negotiated while he or she was a TSE Career Broker. e agreement specifically spelled out this was not a franchisor-franchisee relationship. Under the license agreement, TSE collected all billable amounts invoiced and gave 85 per cent to the licensee. It also set minimum annual billable standards. In July 2012, TSE sent Chavdarova a "notice of default" that listed, among other things, that she had total billings of $586.84 over the past six months that was "not in line to cover the minimum billings of $80K per year." In February 2013, TSE's lawyers gave her notice of termination of the agreement. Chavdarova, who represented herself in court, eventually wrote back notifying TSE that she was rescinding the "franchise agreement" between them, and claiming that she would exercise her statutory right of action for financial damages. She said that the relationship was that of franchisor and franchisee no matter "what the relationship might be called for other purposes." e court agreed, and held it was a franchise relationship partly because of the payment she made to TSE to become a broker. "While the defendant has attempted to dress up the payment as one for training only, there is little doubt that it is, in fact, a fee that must be paid in order to enter into the relationship," wrote Justice Douglas Gray. He noted Chavdarova's business also had to be operated in accordance with uniform equipment, systems, methods, procedures and designs, and under TSE's proprietary marks, saying: "It is also clear, in my view, that the defendant exercises significant control over the so-called licensee's method of operation." at included providing billing and invoicing services, collection services, office and accounting support. When she signed the license agreement, he wrote, she was required to CROSS-BORDER SIGNIFICANCE Michael Robb Siskinds LLP "The takeaway for me [in Chavdarova] is, it doesn't matter what you call your arrangement, the court's going to look at the substance of it and make a determination [as to whether it's a franchise agreement]. … You have to be really thoughtful about the substance of the agreement or the arrangement."

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