Freshslice ordered to release $106,000 after Coquitlam franchise lawsuit falls apart

A legal fight over a defunct Freshslice Pizza in Coquitlam has ended with a judge ordering that more than $106,000 be released from trust, after the underlying lawsuit against the franchise operators collapsed.

In a Jan. 19 decision, B.C. Supreme Court Justice Barbara Norell ruled that RFSP Equipment & Operating Inc. – the franchisor behind Freshslice – could no longer rely on a failed Coquitlam franchise lawsuit to justify withholding sale proceeds from a separate restaurant transaction.

Norell said Freshslice’s actions effectively tried to obtain a “pre-judgment security for an alleged debt . . . without any pleaded legal basis or evidence to do so.”

The dispute traces back to a Freshslice Pizza that once operated on Pinetree Way in Coquitlam, run by Three Enterprises Ltd. In 2018, Freshslice launched a lawsuit alleging the restaurant had been abandoned in breach of its franchise agreement, rent payments had stopped, and a promissory note signed in November 2016 had gone unpaid.

Freshslice sued not only the company, but its directors – Devendra Singh, Charanjit Bhatti and Jimmy David – claiming they were personally liable as co-signers on the debt and as tenants under the lease for the Pinetree Way location.

While that Coquitlam action was still working its way through the courts, Singh and Bhatti were operating another Freshslice franchise through a different company, 1087057 BC Ltd., at a location on Marine Drive in West Vancouver. 

When Freshslice informed them in early 2021 that the Marine Drive franchise would not be renewed due to poor evaluations, they were forced to sell the restaurant.

Under the franchise agreement, however, Freshslice’s written consent was required for the sale to close. Freshslice agreed to grant that consent – but imposed a condition.

In an August 2022 email, the company told the sellers that because Singh and Bhatti were defendants in the Pinetree Way lawsuit, and because Freshslice claimed an unpaid balance of over $106,000 was owed under a promissory note, that same amount would need to be held back from the sale proceeds and placed in trust until the Coquitlam suit was concluded.

The sellers objected to the condition, arguing that the alleged debt related to a different company and a different restaurant. But facing financial pressure and the looming loss of the Marine Drive franchise, they agreed. 

The sale completed in November 2022, with the funds frozen in their lawyer’s trust account.

The legal justification for that holdback changed in August 2025, when another BC Supreme Court judge dismissed Freshslice’s claims against Singh and Bhatti personally, finding that the promissory note was owed only by Three Enterprises Ltd., not by the individuals themselves.

Only Three Enterprises – which had been dissolved in 2019 – remained a defendant in the Coquitlam lawsuit.

Despite that ruling, Freshslice refused to release the trust funds. In response, Singh and Bhatti brought a petition to court seeking an order that the money be paid out.

Freshslice argued it was still entitled to keep the funds frozen, alleging that Singh and Bhatti were effectively the alter egos of the various corporations involved, and suggesting assets had been transferred between entities to make them judgment-proof.

The company also said it intended to pursue fraudulent conveyance or preference claims once it obtained a judgment in the Coquitlam case.

Justice Norell rejected those arguments.

“There was no right under the franchise agreement for the respondent to withhold consent because Three Ltd. allegedly owed it funds,” Norell said.

The judge found that Freshslice’s original condition for holding the funds was tied specifically to the personal liability of Singh and Bhatti in the Pinetree Way lawsuit – a liability that no longer existed after the claims against them were dismissed.

The court also found there was no evidence to support piercing the corporate veil, and no legal basis to treat the Marine Drive franchise owner as responsible for alleged debts tied to the Coquitlam restaurant.

Norell was particularly critical of what she described as an attempt to obtain security for an alleged debt without first securing a judgment in the underlying Coquitlam case, which has been ongoing for more than seven years without a final ruling.

Given the absence of conflicting evidence and the clear wording of the franchise agreement, the judge declined Freshslice’s request to send the matter to trial or delay the payout any further.

The court ordered that the funds held in trust be released, and awarded costs against Freshslice.