The appellants, a corporate franchisee and its individual shareholders, sued the respondent franchisor for wrongful seizure of assets and negligent misrepresentation.
After the franchisee defaulted on its debts, the franchisor appointed a receiver who immediately seized the company's assets and the personal assets of one of the shareholders without providing reasonable notice to pay the demanded amount.
The parties subsequently entered into a settlement agreement.
The Supreme Court of Canada held that the franchisor was required to give reasonable notice before enforcing the demand obligation, rendering the seizure a trespass and conversion.
The Court restored the trial judge's award of damages, including exemplary damages, but upheld the validity of the settlement agreement, which foreclosed the appellants from challenging their personal guarantees.
