Kristina Davies

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 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franchisees of a pizza franchise, brought a motion for partial summary judgment seeking a declaration that they validly rescinded their franchise agreement due to the franchisor's failure to provide a proper disclosure document under the Arthur Wishart Act.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The court granted the motion, declaring the agreement validly rescinded and finding the individual defendants and a related corporation to be franchisor's associates jointly and severally liable.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.

Former franchisees appealed an order granting the franchisor leave to amend its statement of defence to add equitable setoff in litigation under the Arthur Wishart Act (Franchise Disclosure), 2000.

The franchisees had already obtained partial summary judgment rescinding the franchise under s. 6(2) and damages under s. 6(6), with a reference determining compensation.

The court held that equitable setoff could be a tenable defence under s. 9 of the Act because statutory rights do not exclude other common law or equitable remedies unless expressly limited.

However, the defence could apply only to the remaining misrepresentation claim under s. 7 and could not reopen the finalized s. 6 rescission and compensation determinations.

The appeal was dismissed but clarified to limit the scope of the amendment.

The defendant moved to stay an Ontario action on the basis that Vermont was the more appropriate forum for a dispute arising from an allegedly unpaid US$3.5 million promissory note connected to hotel investments in Vermont and New Hampshire.

The court held that Ontario had jurisdiction simpliciter because the defendant resided in Ontario, triggering a presumptive connecting factor under the framework established in Club Resorts Ltd. v. Van Breda.

The defendant failed to rebut the presumption or demonstrate that Vermont was clearly the more appropriate forum under the doctrine of forum non conveniens.

The court emphasized that both parties resided in Ontario, the alleged default occurred in Ontario, the defendant’s assets were located in Ontario, and requiring the plaintiff to litigate in Vermont would create unfairness because he was barred from entering the United States.

The motion to stay the Ontario proceeding was dismissed.

The appellants appealed a decision declaring the respondents were entitled to rescind a second franchise agreement due to the appellants' failure to provide a disclosure document.

The Court of Appeal upheld the application judge's findings that the matter was appropriate for an application, that the second agreement was a 'franchise agreement' under the Arthur Wishart Act triggering disclosure obligations, and that the rescission claim was not statute-barred because the limitation period only began when the franchisor disputed the notice of rescission.

The appellant franchisor appealed a summary judgment declaring that the respondents validly rescinded their franchise agreement due to a lack of disclosure.

The franchisor argued it was exempt from disclosure obligations under the resale exemption of the Arthur Wishart Act, claiming it merely consented to the transfer between the former franchisee and the respondents.

The Court of Appeal dismissed the appeal, finding the franchisor was actively involved in the transaction by directing the respondents to the vendor, participating in negotiations, and requiring the execution of additional documents not specified in the original franchise agreement.

Consequently, the grant was 'effected by or through the franchisor', nullifying the exemption.