TORONTO • A proposed class-action lawsuit seeking $2 billion from Joe Fresh and Loblaw Cos. Ltd. over the collapse of a Bangladesh garment factory in 2013 has been rejected by an Ontario judge.

In a sometimes scathing decision issued this month, Ontario Superior Court Justice Paul Perell said the Toronto-based counsel for three garment workers who were injured in the Rana Plaza building near Dhaka failed to argue a viable cause of action in their claim.

In refusing to certify the proposed class action, the judge criticized the plaintiffs’ claim as “bloated with conclusory statements that simply allege a cause of action as if it was a material fact” in relation to Loblaw and other defendants’ potential roles in the collapse, which killed more than 1,100 and injured more than 2,500.

Plaintiff law firm Rochon Genova LLP had argued that Loblaw was “vicariously liable” for the negligence of its suppliers and sub-suppliers, Pearl Global and New Wave.

Before the building collapse, Loblaw hired Pearl Global to produce garments for Joe Fresh. Pearl Global outsourced some of the work to New Wave, which manufactured garments at Rana Plaza.

The claim of vicarious liability failed because Pearl Global and New Wave were not agents or employees of Loblaw, nor were they independent contractors of the sort that can trigger vicarious liability in the legal sense, Justice Perell wrote.

“New Wave was selling goods, not services or tasks that were part of Loblaw’s enterprise,” he said in the decision. “Loblaw did not delegate its responsibility for the safety of the employees of New Wave, because it had no such responsibility.” The “exceptional circumstances” in which an enterprise can be vicariously liable for the misdeeds of independent contractors were not evident in this case, Perell added.

“Loblaw had no control over how Pearl Global and New Wave carried on their manufacturing business or treated their employees.”

Also named in the suit were Loblaw’s parent company George Weston Ltd., wholly owned Loblaw subsidiary Joe Fresh Apparel Inc., and the U.S., France and Bangladesh branches of Bureau Veritas Consumer Products Services Inc., a company hired by Loblaw to perform inspections and audits of textile and garment factories.

Loblaw is “pleased” with the ruling, company spokesman Kevin Groh said in a statement. In June, the retailer and owner of house apparel brand Joe Fresh renewed its commitment to the global 2013 Accord on Fire and Building Safety in Bangladesh, which established stricter standards for workplace safety in Bangladesh factories, Groh added.

“Our three-year renewal will help extend the Accord’s good work, auditing and eliminating building risks in facilities where our suppliers produce our goods, and putting workers’ interests first.”

The company, which paid relief and compensation of some $5 million to Bangladeshi workers and various social agencies in the wake of the Rana Plaza disaster, now publicly lists the names of all factories it uses to produce Joe Fresh products.

Last year, a Bangladeshi court charged 38 people with murder in that country’s worst industrial disaster, and three others were charged in assisting plaza owner Sohel Rana in attempting to flee the country after the collapse.

The incident sparked international outrage and retailers and brand manufacturers faced heightened consumer pressure to expose the cracks in their supply chains, in particular the sourcing of garment work to underdeveloped nations with cheap labour and poor safety standards.

Financial Post

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