David Jules Gray

Following the dismissal of a plaintiff’s motion for partial summary judgment in a franchise dispute, the court addressed the appropriate scale and quantum of costs.

The defendants sought substantial indemnity costs relying on two offers to settle, but the court found that neither offer triggered enhanced cost consequences because their conditions were not met.

The court held that the appropriate scale was partial indemnity throughout.

Considering the factors under Rule 57.01(1) and the Court of Appeal guidance in Boucher, the court fixed costs at $22,000 all-inclusive payable by the unsuccessful moving parties.

Franchisees sought rescission of a franchise agreement nearly two years after execution on the basis that the franchisor delivered the disclosure document by email rather than by personal delivery or registered mail as required by s. 5(2) of the Arthur Wishart Act (Franchise Disclosure).

The moving party argued that any breach of the Act relating to disclosure entitled a franchisee to the two‑year rescission remedy under s. 6(2).

The court rejected this interpretation, holding that the two‑year rescission right applies only where there is a complete failure to provide a disclosure document or where the disclosure is materially deficient.

Because a complete disclosure document had been delivered—albeit by email with the franchisee’s consent—the alleged breach related only to the method of delivery.

The court held that such a breach does not justify rescission under s. 6(2) and instead limits the franchisee to a damages remedy under s. 7(1).