Adrienne L. Boudreau

The plaintiff, Kalbow Restorations Inc., sought an urgent interlocutory injunction against its franchisor, Goodbye Graffiti Inc., and related parties, alleging improper termination of their franchise agreement.

The court dismissed the motion, finding that Kalbow had committed incurable material defaults under the agreement by using unauthorized chemicals and suppliers, and had not demonstrated a strong prima facie case or a serious issue to be tried.

The court also found no irreparable harm and that the balance of convenience favoured the defendants.

Costs were awarded to the defendants on a partial indemnity basis.

This is a costs endorsement following a grouped set of appeals and cross-appeals where all parties were entirely unsuccessful.

The court declined to award costs, rejecting the franchisor parties' argument to parse success across various elements of the appeals and cross-appeals.

The court found it inappropriate to do so, concluding that since no party achieved any degree of success, no costs should be awarded.

The Court of Appeal for Ontario heard appeals and a cross-appeal concerning a franchise dispute under the Arthur Wishart Act.

Franchisees Versatile Holdings Inc. and Everest Group Inc. appealed the dismissal of their rescission actions, arguing errors in the burden of proof for disclosure deficiencies and the determination of franchisor's associates.

The franchisor, Paramount Franchise Group Inc., cross-appealed the trial judge's finding that Premium Host Inc. was entitled to statutory compensation, challenging disclosure exemptions, the effect of contract termination on rescission rights, material omission of financial statements, and the finding that Holly Graham and Paramount Leasing were franchisor's associates.

The Court dismissed all appeals and the cross-appeal, affirming the trial judge's findings on the burden of proof for rescission, the non-applicability of disclosure exemptions, the right to rescind despite prior termination for breach, the materiality of the financial omission, and the determination of franchisor's associates.

The defendants brought a motion for security for costs against the plaintiff, a former franchisee, citing the plaintiff's insufficient assets.

The plaintiff conceded its lack of assets but argued against the order, claiming impecuniosity and a meritorious case.

The court found the plaintiff failed to prove impecuniosity due to insufficient disclosure of shareholder assets and lack of inquiry into borrowing.

While acknowledging the defendants' delay in bringing the motion, the court ordered the plaintiff to post security for costs on a partial indemnity scale, significantly reducing the amount sought to reflect the delay and future litigation steps.

The plaintiff, Tripsetter Inc., brought a motion seeking leave to add Tweed Inc. and Jurgen Schreiber as defendants, alleging they are "franchisor's associates" under the Arthur Wishart Act (Franchise Disclosure), 2000.

The proposed defendants objected, arguing the claim was out of time due to a lack of notice of rescission and that the proposed pleading failed to establish the necessary control for a franchisor's associate.

The court found that the Act does not require notice of rescission to be given to an alleged franchisor's associate for a claim for damages to proceed.

It also determined that the limitation period argument was not clear-cut and could be argued at trial, as the plaintiff's knowledge of Tweed's full involvement only came to light during discovery.

The court found the proposed pleading, including the "de facto franchisor" concept, to be sufficient for the purpose of a pleadings amendment motion, noting that amendments are to be read generously.

This is a costs decision following a judgment in a complex multi-party litigation involving franchise disputes.

The court determined the quantum and scale of costs for various successful and unsuccessful claims and counterclaims.

Premium Host Inc. was awarded partial indemnity costs against Paramount Franchise Group Inc. and related entities.

Versatile Holdings Inc. and Everest Group Inc., whose claims were dismissed, were ordered to pay partial indemnity costs to the Paramount group.

The court declined to award elevated costs, reduced the defendants' claimed costs due to duplication and litigation conduct, and clarified the liability of individual guarantors for corporate litigation costs, holding them jointly and severally liable only for costs related to counterclaims where they were proper parties.

The plaintiff, Tripsetter Inc., brought a motion seeking a further and better affidavit of documents from the defendants, 2161907 Alberta Ltd., Canopy Growth Corporation, and Justin Farbstein, and answers to undertakings and a refusal.

The core dispute concerned whether the parties' relationship was a franchise or a license, impacting disclosure obligations under the Arthur Wishart Act.

The court ordered the production of a Franchise Disclosure Document and a Financial Projections Document, finding them relevant to the nature of the relationship and the defendants' disclosure exemption arguments.

However, the plaintiff's general request for a further affidavit of documents and its requests regarding the undertakings and refusal were dismissed.

Costs were awarded to the plaintiff.

The defendants brought a motion to compel the plaintiff's representative to reattend discovery and answer numerous refused questions across four categories.

The plaintiff opposed the motion, arguing the questions were irrelevant or privileged.

The court largely upheld the plaintiff's refusals, finding most questions irrelevant to the core issues of the case, such as the nature of the business relationship (franchise vs. license) or the plaintiff's subjective understanding of legal requirements.

Only one minor question regarding inventory was ordered to be answered.

The appellants, several Turtle Jack's restaurant franchisees, appealed a motion judge's order that set aside an Associate Judge's decision to add a new defendant (11554891 Canada Inc.) and allow amendments to their statement of claim regarding supplier contributions to an advertising fund.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that adding the new party and allowing the amendments would constitute an abuse of process due to inordinate delay, the dubious nature of the claims, and the fact that the amendments introduced new, statute-barred claims.

The court also upheld the costs award against the appellants.

The plaintiff, Lightbox Enterprises Ltd., moved for interlocutory injunctive orders against the defendant, 2708227 Ontario Inc., concerning their business relationship involving retail cannabis stores.

Lightbox alleged breach of license and service agreements and misuse of confidential information and trademarks ("Dutch Love", "Hobo Cannabis"). 2708227 Ontario Inc. counter-claimed, asserting the relationship was a franchise governed by the Arthur Wishart Act and that Lightbox failed to provide disclosure, entitling 2708227 Ontario Inc. to rescind the agreements.

The court dismissed Lightbox's motion for injunctive relief, finding no contractual basis for the primary relief sought, insufficient evidence to establish a strong prima facie case for breach of confidence, no irreparable harm, and that the balance of convenience favored the defendant.

The defendants (Franchisor Group) brought a motion for a collective security for costs order against three corporate plaintiffs (Franchisees) involved in related but unconsolidated actions, seeking a global payment of $597,427.32.

The court dismissed the motion, finding no legal basis under Rule 56.01 for a collective security for costs order against plaintiffs in separate actions.

The court also declined to grant alternative relief (separate security orders) under the "basket clause" of the notice of motion, citing procedural unfairness due to lack of proper notice and the arbitrary nature of quantifying security without a detailed breakdown of costs per action.

This decision addresses two motions brought by the Defendants to compel answers to refusals arising from examinations for discovery and cross-examinations on affidavits filed for a security for costs motion.

The court provided guidance on the scope of cross-examination on affidavits, particularly concerning the financial disclosure obligations of shareholders of corporate plaintiffs claiming impecuniosity.

The Master made specific rulings on numerous disputed refusals, balancing relevance and proportionality, and ordered the Shareholders to provide additional information and documents, while adjourning the discovery refusals motion.

The applicants, Ronald and Maureen Kentner, moved for summary judgment to enforce a vendor take-back mortgage against the respondent, Marina Stefanovic, who had defaulted on payments.

Stefanovic opposed the motion, alleging that the Kentners' real estate agent had engaged in a scheme to artificially inflate the property's purchase price and that the Kentners were complicit.

Stefanovic also argued that partial summary judgment was inappropriate given her counterclaim against the Kentners and others.

The court granted partial summary judgment, finding the mortgage valid and enforceable, and that the Kentners did not participate in the alleged scheme.

The court determined that the mortgage claim was a discrete issue, suitable for bifurcation from the counterclaim, which would continue.

The Royal Bank of Canada (RBC) moved for summary judgment against Everest Group Inc. and its guarantors (Yousaf Kahn, Zarmina S. Khan, and Shadid Saleem Khawaja) for outstanding business loans.

Everest Group, a franchisee, ceased operations after attempting to rescind its franchise agreement, which RBC deemed an event of default under the loan and security agreements.

The defendants argued that the cessation was due to exercising statutory rescission rights under the Arthur Wishart (Franchise Disclosure), 2000 Act, and should not constitute a default, and sought adjournment pending a third-party claim against the franchisor.

The court granted summary judgment, finding clear events of default based on the loan agreements' terms, including cessation of business and failure to make payments.

The court rejected the defendants' interpretation of the contracts and their argument for forbearance, stating that RBC was objectively reasonable in enforcing its rights.

The plaintiff bank brought a motion for summary judgment against a corporate franchisee and its personal guarantors for defaulting on a business loan.

The franchisee had surrendered its restaurant to the franchisor and sought to rescind the franchise agreement.

Relying on the reasons in a companion case involving the same franchisor and one of the same guarantors, the court granted summary judgment for the outstanding loan amounts and awarded full indemnity costs.

The appellants challenged the trial judge's decision on a franchise dispute under the Arthur Wishart Act (Franchise Disclosure), 2000.

The appellants argued that the trial judge erred in preventing cross-examination regarding the respondent's financing arrangements with Toronto Dominion Bank and in permitting counsel to reference the bank's judgment against the respondent.

The Court of Appeal upheld the trial judge's decision, finding that the source of funds paid by the franchisee to the franchisor is irrelevant to the statutory entitlement to refund under the Act.

The court affirmed that Ontario's legislated payback scheme requires the franchisor to refund all money received from the franchisee, regardless of how those funds were obtained.

The defendant Lenovo brought a motion under Rule 21.01(1)(b) to strike the plaintiff's class action claim in its entirety, arguing that none of the advanced causes of action could succeed.

The plaintiff had initially advanced five causes of action: breach of contract, implied condition of merchantability, intrusion upon seclusion, breach of provincial privacy laws, and negligence (the negligence claim was withdrawn).

The court granted the motion in part, striking the breach of contract claim, but dismissed the motion regarding the claims for implied condition of merchantability, intrusion upon seclusion, and breach of provincial privacy laws, finding them arguable and not plain and obvious to fail.

No costs were awarded due to divided success.

The plaintiffs, a franchisee and its principal, brought an action for rescission of a franchise agreement under the Arthur Wishart (Franchise Disclosure) Act, 2002, alleging material deficiencies in the franchisor's disclosure document.

The court found three critical deficiencies: the absence of the most recent financial statements, the failure of the franchisor's associate to sign the certificate of truth and accuracy, and the omission of the head lease.

Each deficiency, and certainly all three combined, constituted defective disclosure so material as to amount to "no disclosure at all," thereby triggering the two-year rescission period under s. 6(2) of the Act.

The court rejected the franchisor's arguments that the deficiencies were cured, that disclosure to an agent was sufficient, or that an acknowledgement in the franchise agreement barred the action, citing the Act's consumer protection purpose and "no waiver" provision.

The defendants' counterclaim was dismissed.

The court awarded the plaintiffs rescission damages totaling $287,289.63, including franchise fees, royalties, rent deposit, leasehold improvements, and equipment.

Following the dismissal of the plaintiff's class action, the court addressed costs.

Her Majesty the Queen in Right of Ontario (HMQ) sought costs on a partial indemnity basis totaling $779,405.70.

The plaintiff argued for no costs or a significant reduction, citing novel points of law and public interest under s. 31 of the Class Proceedings Act, 1992.

The court found that the complex legal issues initially raised were not ultimately pursued, rendering s. 31 inapplicable.

However, the court disallowed HMQ's costs for an unsuccessful summary judgment motion, granting the plaintiff a credit of $216,550.

Ultimately, HMQ was awarded costs fixed at $470,810 for fees and $92,045.70 for disbursements, for a total of $562,855.70.

The plaintiff brought a motion for summary judgment to recognize and enforce a $99,925 Maryland judgment obtained against the defendant in 2004.

The defendant opposed the motion, arguing the action was time-barred under the Limitations Act.

The court dismissed the motion, finding that the issue of discoverability—specifically when the plaintiff knew or ought to have known the defendant resided in Ontario—raised genuine issues of material fact and credibility that required a trial.