Adrienne Boudreau

Three franchisees (Versatile, Everest, and Premium Host) sought to rescind their franchise agreements with Paramount Fine Foods under the Arthur Wishart Act, alleging the franchisor failed to provide compliant disclosure documents.

The court found that Paramount was not exempt from its disclosure obligations.

However, Versatile and Everest failed to prove on a balance of probabilities that the disclosure documents they received were fatally flawed, so their rescission claims were dismissed.

Premium Host successfully established that Paramount failed to disclose material financial information in a single document, rendering its disclosure fatally flawed.

Premium Host's rescission was deemed valid, and it was awarded statutory compensation against the franchisor and its associates, including Paramount Leasing and the Manager of Franchising.

The applicants were successful in an application to disqualify an arbitrator and sought partial indemnity costs of $21,411.22.

The respondents argued the amount was too high and proposed $8,761.96, noting the brief hearing.

The court found the applicants' proposed amount was within the norm for a short but legally significant application.

The court exercised its discretion to award the applicants costs in the rounded amount of $21,400, inclusive of fees, disbursements, and HST.

The applicants sought the appointment of a new arbitrator for a second arbitration concerning franchise agreements, while the respondents sought to re-appoint the arbitrator from the first arbitration.

The applicants objected on the basis of a reasonable apprehension of bias, as the arbitrator had made adverse credibility findings against them in the first proceeding.

The respondents argued the original arbitrator was best positioned to determine if the new claims were res judicata.

The court declined to appoint the original arbitrator, finding that relying on his private notes from the first arbitration would violate deliberative secrecy and that the interpretation of his prior award must be done objectively by a new decision-maker.

The court appointed a retired judge as the new arbitrator.

Following the dismissal of the plaintiff's motion for injunctive relief, the successful defendants sought costs on a substantial indemnity basis.

The plaintiff argued that the defendants' costs were excessive and that their conduct warranted a denial of costs.

The court found that while the plaintiff's motion was ill-conceived, its conduct was not reprehensible enough to justify elevated costs.

Applying the factors under Rule 57.01, the court awarded the defendants partial indemnity costs in the amount of $50,995.12.

Following a successful appeal setting aside a Master's order that amended pleadings and added a defendant, the successful appellants sought costs.

The court found the amounts sought excessive because the appellants were unsuccessful on several grounds of appeal and the costs of the underlying motion were fixed at $5,000.

The court awarded the TRG defendants $13,000 and the added defendant $12,000, inclusive of the underlying motion costs.

The defendants appealed a Master's order that granted the plaintiffs leave to amend their statement of claim to add new defendants and new claims regarding supplier contributions to an advertising fund, and ordered related documentary production.

The Superior Court of Justice allowed the appeal in part.

The court found that adding a new corporate defendant on the eve of trial constituted an abuse of process given the extensive delays in the nine-year-old franchise dispute.

The court also held that the Master erred in allowing the amendments regarding supplier contributions, as they constituted a new cause of action that was statute-barred and not legally tenable under the clear terms of the franchise agreements.

The Master's orders adding the new party and allowing the supplier contribution amendments were set aside.

The defendants brought a motion for security for costs against three corporate plaintiffs (former franchisees) in three related actions.

The plaintiffs argued they were impecunious and that an order would be unjust due to the defendants' delay, the existence of counterclaims, and the nature of franchise litigation.

The court found that the plaintiffs were not impecunious because their shareholders had the ability to fund the litigation.

Applying a holistic approach, the court determined it was just to order security for costs, but reduced the quantum to reflect the defendants' delay and the overlapping counterclaims.

The franchisee applied to rescind a franchise agreement under s. 6(2) of the Arthur Wishart Act, alleging material deficiencies in the franchisor's disclosure document.

The court found that the franchisor failed to disclose complete financial statements, the absence of a head lease, a negotiated agreement to lease, and the fact that the location was the franchise's first non-mall setting.

These omissions effectively deprived the franchisee of the opportunity to make an informed investment decision, amounting to a failure to provide a disclosure document.

The application was allowed, the rescission was declared valid, and the franchisor and its associate were ordered to pay $306,581 in statutory compensation, with the franchisee's loss of income claim referred to a master.

The applicant, Green Relief Inc., sought approval of a transaction for the sale of its assets to 2650064 Ontario Inc. in the course of a CCAA proceeding.

The transaction included a condition precedent releasing claims against current directors, legal counsel, the Monitor, and its counsel.

Certain founding shareholders opposed the release, arguing the court lacked jurisdiction to grant it prior to a plan of arrangement and that they wished to pursue claims for loss of chance.

The court approved the transaction and the release, finding the sale process was reasonable and the release was rationally connected to the restructuring, benefiting creditors by preventing the depletion of the estate through indemnity claims.

The court temporarily lifted the stay of proceedings to allow claims covered by tail insurance to be filed.

The plaintiff landlord brought a motion for early documentary discovery before the close of pleadings, seeking the identities of the tenant's employees who resided at the leased property when a fire occurred, as well as the production of the tenant's insurance policies.

The court granted the request for the employees' names and contact information, applying the principle of proportionality under Rule 1.04 to allow the plaintiff to properly name the John Doe defendants and avoid future delays.

However, the court dismissed the request for early production of the insurance policies, finding it premature prior to the delivery of an affidavit of documents.

The plaintiff successfully moved for certification of a national class action and sought costs of $69,088.48 on a partial indemnity basis.

The defendant argued the costs should be reduced to $35,000 in fees because it had achieved some success in reducing the class size and shaping the common issues.

The court rejected the defendant's argument, holding that distributive costs awards are generally to be avoided and the defendant's measure of success did not warrant diminishing a fair costs claim.

The court awarded the plaintiff the full amount claimed.

The plaintiff brought a motion to certify a national class action against Lenovo (Canada) Inc. and Superfish Inc. regarding the pre-installation of Visual Discovery software on certain laptop computers.

The plaintiff alleged the software contained a security defect and unlawfully transmitted private information.

The court found that the claims for breach of the implied condition of merchantability, intrusion upon seclusion, and breach of provincial privacy laws satisfied the cause of action criterion.

The court modified the proposed class definition to exclude indirect purchasers and certain computer models, and refined the common issues.

The action was certified as a class proceeding.

In a proposed class action, the plaintiff moved under Rule 49 to enforce an alleged settlement with one of the defendants, Superfish Inc., prior to certification.

Counsel for Superfish requested an adjournment to obtain instructions.

The court granted the adjournment, noting that a Rule 49 motion to enforce a settlement in a proposed class action cannot proceed pre-certification.

The motion was adjourned to allow the plaintiff to properly constitute the motion by bringing it alongside a motion for certification.

The representative plaintiff brought a class action on behalf of private issuers who operate ServiceOntario outlets, alleging that Ontario breached its duty of good faith and acted unreasonably in exercising its unilateral discretion to set their compensation.

The plaintiff argued that the compensation was inadequate and failed to keep pace with expenses.

The court dismissed the action, finding no evidence of dishonesty or bad faith by Ontario.

The court held that the duty of good faith applies to the performance of the contract, not to ensuring a commercially reasonable outcome, and that Ontario's compensation decisions were not commercially unreasonable in any event.

The alternative claim for unjust enrichment was also dismissed as the contract constituted a juristic reason for the enrichment.

The plaintiffs brought a motion arising from a dispute over the conduct of examinations for discovery, specifically whether the plaintiff could attend the defendant’s discovery and the order in which discoveries should occur.

The action alleged misrepresentation and fraud relating to investments connected to speaking engagement events and an alleged IPO opportunity.

The court considered the principles governing exclusion of a party from attending an opposing party’s examination for discovery, including the requirement of “proper cause” and the risk of tailoring evidence where credibility is central.

Given evidence suggesting credibility would be a critical issue and concerns regarding potential tailoring of testimony, the court concluded that the interests of justice justified limiting attendance until one party had completed examination.

The plaintiff’s request to strike the defence and related relief was rejected, and directions were provided for how the discoveries should proceed.