Derek Ronde

The plaintiff franchisor brought a motion for an interim injunction to enforce restrictive covenants contained in a terminated franchise agreement.

The agreement prohibited the franchisee and its principal from operating a competing pet supply business within a specified geographic radius and from soliciting employees following termination.

Evidence showed that a competing store was opened nearby through a newly incorporated company associated with the franchisee’s spouse and that the former franchisee remained involved in its operations.

The court found a prima facie breach of the non‑competition, non‑solicitation, and post‑termination obligations, concluding that the new corporation was used to conceal the franchisee’s continued participation.

The court held that where a clear breach of a negative covenant in a franchise agreement is established, proof of irreparable harm and balance of convenience is not required, though the evidence would have satisfied those elements in any event.

The defendants brought a motion to strike portions of the plaintiffs’ Statement of Claim in a franchise dispute.

In an earlier endorsement, the court struck certain portions while permitting others to proceed.

This addendum clarified additional paragraphs that the parties had agreed should be struck prior to the motion argument but which were not listed in the original endorsement.

The struck portions related to unsupported claims against individual defendants, including negligence, breach of contract, statutory duties under franchise legislation, and claims for injunctive relief and lost opportunity damages.

The court confirmed that the listed portions of the Statement of Claim were struck in accordance with the parties’ agreement.

The defendants brought a motion to strike portions of the plaintiffs' amended statement of claim in a franchise dispute.

The plaintiffs, franchisees of a Cora restaurant, alleged misrepresentation, breach of contract, and breach of the Arthur Wishart Act after the franchisor opened another location nearby.

The court struck the breach of contract and negligence claims without leave to amend, finding they contradicted the express terms of the franchise agreement which granted no exclusive territory.

The misrepresentation claims were struck with leave to amend for lack of particularity.

The claims under the Arthur Wishart Act and for injunctive relief were allowed to proceed.

Following the certification of a class action on behalf of franchisees against a franchisor, a group of franchisees opposed to the action waged a campaign encouraging others to opt out.

The motion judge invalidated the opt-out notices received after the campaign began, finding the campaign coercive and misleading.

The Court of Appeal allowed the appeal, holding that the motion judge erred in drawing an inference of intimidation without direct evidence and in holding the opposing franchisees to a standard of objectivity.

The communications amounted to acceptable intra-class debate, and the opt-out notices were reinstated.

The appellants appealed an order dealing with unpaid costs and security for costs.

The respondents raised a preliminary objection that the order was interlocutory and required leave to appeal to the Divisional Court.

The Court of Appeal agreed, finding that orders regarding unpaid costs and security for costs are interlocutory.

The appeal was quashed for lack of jurisdiction.

In a certified franchise class action concerning alleged failure to share supplier rebates, the representative plaintiff sought to set aside opt-out notices after a franchisee group launched a campaign encouraging class members to opt out.

The campaign included a coordinated telephone blitz and a public website listing franchisees who opted out while disseminating misleading information about the litigation and class counsel.

The court found that the communications exerted pressure on franchisees and undermined the fairness and integrity of the opt-out process.

Concluding that the process had been subverted by misinformation and intimidation, the court exercised its supervisory authority under the Class Proceedings Act to invalidate opt-out notices submitted after the campaign began.

The appellants appealed an order dismissing their claim for statutory rescission of a franchise agreement.

The Court of Appeal agreed with the motion judge that the notice of rescission was provided more than two years after the franchise agreement was entered into, pursuant to s. 6(2).

The appeal was dismissed, as it was plain and obvious the claim could not succeed.

The defendants brought a motion to strike the plaintiffs’ motion seeking production of documents from non-parties and to quash a summons requiring a non-party to attend for examination.

The action had already been set down for trial after the plaintiffs served a trial record.

The court held that under Rule 48.04(1) of the Rules of Civil Procedure, a party who has set an action down for trial cannot initiate further discovery or related motions without leave of the court, absent exceptional circumstances.

The plaintiffs failed to seek leave and did not establish any substantial or unexpected change in circumstances justifying further discovery.

The summons to the non-party was also non‑compliant with Rule 34.03 because it required attendance in a different region from the witness’s residence.

The moving party sought substantial indemnity costs after succeeding on a motion, arguing the opposing party had been warned that their statutory rescission claim lacked merit.

The responding party argued substantial indemnity was inappropriate because the issues concerning the statutory rescission remedy under s. 6(2) of the Arthur Wishart Act (Franchise Disclosure), 2000 were novel and of public importance, and because leave to amend pleadings had been granted.

The court held that substantial indemnity costs are reserved for rare and exceptional cases involving reprehensible litigation conduct and found the responding party’s conduct did not meet that threshold.

Given the novelty and public importance of the issues, the court awarded costs on a partial indemnity basis.

Costs of $12,000 were ordered payable by the responding parties.