Anthony Pugh

The Court of Appeal dismissed an appeal concerning the rescission of a franchise agreement.

The trial judge had found that the franchisees were entitled to rescind the agreement under the Arthur Wishart Act due to the franchisor's failure to provide a signed and dated disclosure certificate, and held the franchisor's sole director personally liable as a "franchisor’s associate." The appeal court affirmed that the absence of a proper certificate is a fatal flaw in disclosure, not requiring proof of an inability to make an informed investment, and upheld the finding of personal liability based on the director's representations.

This decision addresses an application for leave to appeal an arbitrator's decision and a cross-application to enforce arbitral awards.

The central issue was whether a franchisee is entitled to damages under section 7(2) of the Arthur Wishart Act (Franchise Disclosure), 2000 (AWA) for misrepresentation in a disclosure document voluntarily provided by a franchisor, but not legally required under section 5 of the AWA.

The court found that the arbitration agreement's "final, conclusive and binding" language excluded a right of appeal.

Even if leave to appeal were possible, the court was not satisfied that the importance of the matters at stake justified an appeal.

The court upheld the arbitrator's decision, finding it reasonable and correct, that section 7(2) of the AWA only applies to misrepresentations in disclosure documents *required* by section 5, not those voluntarily provided, especially for commercially sophisticated franchisees.

Consequently, the application for leave to appeal was dismissed, and the application to enforce the arbitral awards was granted.

A non-party to an application sought to transfer the proceeding and a related garnishment hearing from Kitchener to Toronto under Rule 13.1.02.

The court dismissed the motion, finding that the moving party was not a party to the application, the application had already been finally disposed of, and a garnishment hearing is a motion rather than a 'proceeding' subject to transfer under Rule 13.1.02.