Owners of a B.C. travel agency franchise faced an increasingly bizarre set of complications with their business that finally led them to believe they were the target of an elaborate conspiracy.

They took the franchise company to court, but were unsuccessful in their plight when they could offer no proof for their claims.

In 1999, Ziad and Andrea Anani bought a Uniglobe Travel (Western Canada) Inc. franchise for Sechelt, B.C. The first of many things to go awry was that the Ananis were initially refused bank financing. Uniglobe offered a different type of franchise deal, which was essentially the same but cheaper. The Ananis agreed, and received manuals and training from Uniglobe.

Next, toll-free calls that should have come to the Ananis business were rerouted to another B.C. office, and e-mails were not getting through because of a common e-mail virus. According to court documents, the Ananis began to believe they had been “cut out of communication with Uniglobe by a code of silence.”

But it was in dealings with actual people that the Ananis had the most difficulty. First, Ziad Anani suspected his bank loans officer of acting unethically, and called it to the bank’s attention.

Next, the Ananis found two Uniglobe representatives unacceptable, claiming one was “forming a dangerous attraction” to their young employee, and replacing the second who twice threatened to revoke the Ananis’ franchise.

The company’s first employee was accused by Anani of planning a takeover plot for their business. A string of employees followed; some quit, others were fired.

The court documents show that in 2001, when the franchise was “losing money to a serious extent,” the Ananis sent letters to the Uniglobe Franchise Owners’ Association and to some 80 other Uniglobe franchises, comparing Uniglobe’s then-president Laurie Radloff to Osama bin Laden.

A month later, Uniglobe shut the Ananis’ franchise down, two years into a 10-year contract.

The Ananis took Uniglobe to the B.C. Supreme Court, looking for damages for a loss of opportunity to make profits.

In spite of Uniglobe’s former president and star witness being killed in a freak accident before the trial, Justice E. Rice found in Uniglobe’s favour.

He found no corroboration of the Ananis’ claims of threats or sabotage, and, in fact, pointed to many documents that demonstrate Uniglobe’s attempt to help, not hinder, the Ananis’ attempt at business.

Ultimately, the judge found that the franchise was failing and likely would have closed anyway if Uniglobe hadn’t shut it down, so Uniglobe is not responsible for lost profit opportunities. However, because Uniglobe closed the franchise without the appropriate 30 days notice, it isn’t entitled to unpaid royalties as its counter-claim demanded.

Outmanoeuvred

A B.C. man who found himself in legal trouble after allegedly using company funds to buy a house for his daughter attempted a John Grisham-like court manoeuvre against his accusers, but got his hands slapped for it instead, court documents indicate.

From 1992 to 1995, Henry Chan was a director of G.P. Holdings Ltd., a subsidiary of British Virgin Islands-based Dynamic Pacific Ltd., set up for the purpose of investing in B.C. real estate.

After his term as a director, court documents say Chan called himself a “shareholders’ representative” for GPH, and as such, maintained contact with the company’s legal firm.

According to court documents, Chan deposited cheques for around $560,000 from a GPH property into a Canadian Imperial Bank of Commerce account he created in GPH’s name.

The next day, he moved $305,000 of it to a trust fund held by a local legal firm, Moir & Moir. A few days later, the legal firm, on Chan’s request, transferred $304,000 to the Royal Bank.

The account of Mabel Chan, Henry Chan’s daughter, shows a deposit for that exact amount the same day. A month later, Mabel took ownership of a house in Steveston, the court papers show.

GPH took Henry, his daughter and CIBC to court, alleging some of GPH’s money was used to buy Mabel’s house.

Henry Chan testified that he did take the money, but did so with verbal approval of the owner of Dynamic Pacific (which the owner, Raymond Ng, denied.)

Chan would not, however, admit that any of the money was used for the house purchase.

Part way through Chan’s trial, Mabel was issued a subpoena. Henry Chan agreed to settle out of court, returning the proceeds from the house sale ($100,000) to GPH, as long as Mabel was kept out of any court proceedings.

Madame Justice M. A. Humphries of the B.C. Supreme Court received notification that a settlement was reached, and that she was to authorize two documents: First, that charges against Mabel Chan would be dismissed, and second, that the $100,000 be released from trust to GPH.

The judge did so, but court documents show she was surprised by Henry Chan’s next move.

Chan filed a suit for the $100,000 to be granted back to his family, claiming that once the first order (dismissing charges against Mabel) was signed, Chan had no authority to sign the second and release the funds on his daughter’s behalf.

Alas, Chan discovered that such legal tactics usually work best in novels, and Justice Humphries was not to be outwitted.

“Mr. Chan may have felt he was cleverly hanging (the counsel for GPH)and GPH out to dry, but he made the court a party to such dealings, and this will not be countenanced,” she wrote.

Not only did Chan lose his case, but has to pay GPH additional costs for his efforts.

(Cases taken from B.C. Supreme Court records. Nicole Strandlund can be reached at nicole@businessedge.ca)