David Simon Altshuller

The appellants, minority shareholders of an insolvent corporation, appealed a motion judge's order granting partial summary judgment dismissing their claims for damages for oppression, breach of contract, and tort.

The motion judge found no evidence that the respondents' alleged wrongful conduct caused the appellants' damages.

The Divisional Court upheld the dismissal of the damages claims, confirming that causation and compensable injury are required for an oppression claim under the Business Corporations Act.

The court made a minor amendment to the order to correct an accidental error regarding declaratory relief, but otherwise dismissed the appeal.

The appellants (franchisor and related entities) appealed a motion judge's decision that the respondents (franchisee and principals) validly rescinded a franchise agreement under section 6(2) of the Arthur Wishart Act (Franchise Disclosure), 2000.

The motion judge found the franchise disclosure document (FDD) was so inadequate as to amount to no disclosure because it failed to include the terms of the head lease and did not provide cost estimates for converting an existing restaurant to an ASWR outlet.

The Court of Appeal allowed the appeal, finding that while the FDD may have contained deficiencies, these were not so serious as to amount to a complete lack of disclosure.

The court distinguished the case from prior jurisprudence by noting the franchise agreement contained collaborative site selection and opt-out provisions that protected the franchisee's ability to make an informed decision.

The court awarded damages to the franchisor for unpaid construction invoices and the head lease deposit, less any benefits derived from operating the franchise.

The plaintiffs, a franchisee and its principals, moved for partial summary judgment seeking rescission of a franchise agreement due to alleged failures of disclosure under the Arthur Wishart Act (Franchise Disclosure), 2000.

The defendants brought a cross-motion for summary judgment to dismiss the claim.

The court found that the franchisor's disclosure document was egregiously deficient, specifically lacking a materially complete form of lease (including the head lease) and proper cost estimates for a conversion-type franchise.

The court rejected arguments that disclosure was impossible due to an undetermined location or that franchisee sophistication waived disclosure obligations.

The deficiencies amounted to a failure to provide a disclosure document, entitling the franchisee to rescission under s. 6(2) of the AWA.

The court also determined which corporate defendants were "franchisor's associates" and dismissed claims for misrepresentation and breach of good faith due to lack of focused argument.

All damages issues were referred to a Master.

Following the release of the court's reasons on appeal, the parties agreed on the costs of the application.

The Court of Appeal ordered costs of the application to the appellants in the agreed amount of $35,000, inclusive of disbursements and HST.

The George Defendants brought a motion for the judge to recuse himself due to his past association and friendship with the Plaintiffs' senior counsel.

The judge, while finding no reasonable apprehension of bias based on his past involvement with a non-profit organization, ultimately decided to recuse himself.

This decision was made out of an abundance of caution, given his personal friendship with counsel and the possibility that counsel's credibility might become an issue in the motions, despite the administrative nature of counsel's affidavit.

The matter was sent back to civil practice court for a new judge.

The appellants, former franchisees of a home medical equipment business, appealed a decision enforcing a restrictive covenant that prevented them from operating a similar business within a 30-mile radius for 18 months after the franchise agreement expired.

The franchisor's corporate parent operated a competing store in the same territory, and the franchisor admitted it had no intention of opening another franchise in that area.

The Court of Appeal allowed the appeal, holding that because the franchisor had no intention of operating in the protected territory, it had no legitimate or proprietary interest to protect there.

Consequently, the restrictive covenant was unreasonable and unenforceable.

The applicant franchisor sought to enforce a restrictive covenant against a former franchisee who continued to operate a similar home medical equipment business at the same location after the franchise agreement expired.

The respondents argued the covenant was unenforceable due to a failure to provide a disclosure document under the Arthur Wishart Act and that the covenant was an unreasonable restraint of trade.

The court found that disclosure was not required because the franchisor was not sufficiently involved in the sale of the franchise.

The court also held that the restrictive covenant was unambiguous, reasonable in its 18-month and 30-mile scope, and protected the franchisor's legitimate business interests.

The application was granted and the respondents were ordered to cease operating the competing business.

The defendants brought a motion for leave to appeal a decision denying their request to vary a Mareva order to permit them access to the proceeds from the sale of their home to pay legal fees.

The court found that the proposed appeal did not involve matters of public importance transcending the immediate interests of the parties, nor were there conflicting decisions on the issue.

The motion for leave to appeal was dismissed.

The franchisor sued the franchisees for breach of contract, and the franchisees counterclaimed for rescission of the franchise agreement under s. 6(2) of the Arthur Wishart Act, alleging the franchisor failed to disclose ongoing litigation against a competing business.

The motion judge granted partial summary judgment dismissing the rescission claim, finding the undisclosed litigation was not a stark and material deficiency.

The Court of Appeal dismissed the franchisees' appeal, holding that summary judgment was appropriate and that the litigation, which was commenced to protect franchisees, was not a material fact and its omission did not amount to a complete failure to provide a disclosure document.

The appellants appealed a partial summary judgment declaring that the franchise disclosure document they provided to the respondents was materially deficient, entitling the respondents to rescind the franchise agreement under the Arthur Wishart Act.

The Court of Appeal upheld the motion judge's decision, finding that summary judgment was appropriate and that the disclosure document's failure to include properly verified financial statements, a compliant certificate, and information about ongoing litigation amounted to a material deficiency equivalent to no disclosure at all.

The applicants, former franchisees of a Baton Rouge restaurant, brought an application seeking declarations that a non-competition clause in their franchise agreement was void and unenforceable as an unreasonable restraint of trade or for ambiguity.

They also sought a declaration that their proposed new restaurant menu did not violate the clause, and claimed damages for breach of the duty of fair dealing under the Arthur Wishart Act.

The court dismissed the application, finding the 5-year, 10-kilometre restrictive covenant to be reasonable and unambiguous given its narrow scope, which only prohibited selling products using the franchisor's recipes.

The court declined to rule on the proposed menu without evidence of the actual recipes and found no evidence of bad faith by the franchisor.

The plaintiffs sought to preserve assets allegedly traceable to funds stolen by a former controller and bookkeeper.

After disclosure and a Mareva injunction, the defendants asserted that they lacked sufficient funds to pay expenses and legal counsel.

Applying the four-part test for variation of freezing orders, the court held that the defendants failed to provide reliable financial evidence, failed to establish other assets were unavailable, and failed to show the frozen assets were from a non-proprietary source.

The motion was dismissed, with written costs submissions invited.

The appellants appealed a motion judge's decision finding they could not rely on the 'resale' exemption from disclosure under the Arthur Wishart Act.

The Court of Appeal upheld the motion judge's finding that the franchisor was not merely a passive participant in the transaction, as they had met with the prospective franchisees multiple times, considered a new franchise agreement, and required an acknowledgement that limited the franchisees' rights.

The appeal was dismissed.

The moving parties sought an order requiring the responding party, a franchisee corporation, to post security for costs in relation to a counterclaim and third party proceedings arising from a franchise dispute.

The court considered Rule 56.01 of the Rules of Civil Procedure and whether the circumstances justified ordering security for costs against the counterclaim plaintiff.

The court held that the third parties were not entitled to security for costs because none of the recognized exceptions permitting recovery of third party costs from a plaintiff applied.

However, the defendant by counterclaim established that the responding party had previously pursued substantially identical relief in earlier proceedings and had failed to satisfy outstanding costs orders exceeding $40,000.

The court exercised its discretion to order security for costs in favour of the defendant by counterclaim.

Following a successful summary judgment rescinding a franchise relationship, the moving parties sought costs on a partial indemnity basis.

The responding parties challenged portions of the claimed hours and argued that some work related to unresolved damages issues.

The court declined to conduct a detailed review of counsel’s accounts but accepted that costs relating to unresolved quantum issues should not yet be awarded.

Applying Rule 57.01 of the Rules of Civil Procedure and s. 131 of the Courts of Justice Act, the court awarded reduced costs while deferring certain fees pending determination of damages on reference.

The moving parties sought partial summary judgment declaring they were entitled to rescind a franchise agreement under the Arthur Wishart Act (Franchise Disclosure), 2000.

The franchisor argued the transaction was exempt from disclosure because the franchise was purchased from an existing franchisee rather than directly from the franchisor.

The court held the franchisor went beyond a passive approval role by meeting with the purchasers and requiring additional documents limiting statutory rights, thereby engaging the disclosure obligations.

The disclosure materials provided were materially deficient, omitting key transaction documents, lease information, litigation findings, and required franchisee information.

The court found the deficiencies amounted to no disclosure, entitling the franchisees to rescind within the two‑year statutory period and seek statutory damages.

The moving party sought to set aside a chambers order that declined to reverse the Deputy Registrar's dismissal of his appeal for delay.

The chambers judge had denied the motion on the basis that the proposed appeal lacked merit, as the pleading failed to disclose a reasonable cause of action for mental distress damages.

The Court of Appeal agreed, finding no error in the chambers judge's conclusion that the tort of intentional infliction of mental suffering cannot be grounded on an alleged omission.

The motion was dismissed with costs awarded to the responding party.

Franchisees brought a motion seeking directions regarding a prior reference decision requiring the franchisor defendants to repurchase supplies and equipment following rescission of a franchise agreement.

The defendants argued the plaintiffs were unable to return the equipment due to its deteriorated condition allegedly caused by improper removal and storage.

The court rejected this argument, holding that s. 6(6) of the Arthur Wishart Act (Franchise Disclosure), 2000 mandates repurchase of equipment regardless of condition and imposes no duty on franchisees to mitigate following rescission.

The plaintiffs were entitled to the previously ordered compensation, payable upon making the equipment available for pickup.

No costs were awarded.

The plaintiffs, franchisees of a pizza franchise, brought a motion for partial summary judgment seeking a declaration that they validly rescinded their franchise agreement due to the franchisor's failure to provide a proper disclosure document under the Arthur Wishart Act.

The court found numerous material deficiencies in the purported disclosure document, including inadequate financial statements, missing certificates, and failure to provide the document as a single bound document.

The court granted the motion, declaring the agreement validly rescinded and finding the individual defendants and a related corporation to be franchisor's associates jointly and severally liable.

The issue of damages was referred to a Master.

The appellants appealed orders arising from a franchise rescission dispute under the Arthur Wishart Act, 2000.

The respondents had obtained partial summary judgment on rescission-related claims, and a Master fixed compensation under s. 6(6).

The appellants also sought to amend their pleading to assert equitable set-off, but the appeal court upheld the interpretation that any such amendment was confined to the still-outstanding s. 7 claims and could not reopen the already-adjudicated s. 6 claims.

The court further held that the Master's factual findings attracted deference and disclosed no misapprehension, error in principle, or palpable and overriding error.

The appeals were dismissed with fixed costs to the respondents.