Shane P. Murphy

In a certified franchise class action alleging price maintenance and breaches of franchise law, the representative plaintiffs sought court approval of a proposed settlement under the Class Proceedings Act, 1992.

The settlement provided $275,000 to reimburse class counsel disbursements and required class members to release all claims relating to the purchase, sale, distribution, promotion, or marketing of supplies.

The court held that although the settlement outcome was otherwise reasonable given the weak prospects of success and litigation risks, the release clause was overbroad because it could bar future claims unrelated to the existing alleged misconduct.

The judge found that approving such a release would unfairly deprive class members of potential future claims.

The court therefore refused to approve the settlement.

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.

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.

Following a partial summary judgment decision granting rescission under s. 6 of the Arthur Wishart Act (Franchise Disclosure), 2000, the court addressed costs of the motion.

Although the moving party achieved partial success, the court declined to award costs immediately.

The court noted uncertainty regarding the quantum of damages to be determined on a reference and the potential impact of competing Rule 49 settlement offers.

Given ongoing issues including quantification of damages, unresolved liability of another defendant, a counterclaim, and a third‑party claim, the court held it would be inappropriate to determine costs at this stage.

The issue of liability, scale, and quantum of costs for the motion was therefore reserved to the trial judge ultimately disposing of the matter.

Former franchisees rescinded their franchise agreements under the Arthur Wishart Act after failing to receive a disclosure document.

Following a reference determining the franchisor’s payment obligations under s. 6(6) of the Act, the franchisor defendants moved to oppose confirmation of the Master’s report, challenging awards for inventory, supplies and equipment, the refusal to offset profits earned during operation, and the costs award.

The court applied the deferential standard governing review of a master’s report and held that no error in principle or misapprehension of evidence had been demonstrated.

The court confirmed that payments under s. 6(6)(a)-(c) are independent statutory entitlements and cannot be offset by profits under s. 6(6)(d).

The Master’s findings and costs award were upheld.

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.

Following a reference determining compensation owed under s. 6(6) of the Arthur Wishart Act (Franchise Disclosure), 2000 after rescission of a franchise agreement, the court considered the appropriate costs award.

The successful franchisee plaintiffs sought substantial indemnity costs after obtaining an order requiring the defendants to pay $290,830.72 plus interest.

The defendants argued no costs should be awarded because the amount had effectively been conceded.

The court held that the plaintiffs were the successful party and entitled to costs, but rejected substantial indemnity costs absent reprehensible conduct or success under Rule 49.

Partial indemnity costs were fixed at $25,000 inclusive of disbursements and taxes.

Following a declaration that the plaintiffs validly rescinded their franchise agreement, a reference hearing was held to determine compensation under s. 6(6) of the Arthur Wishart Act.

The court awarded compensation for refunded money, inventory, and equipment, but denied compensation for operating losses because the plaintiffs failed to properly record cash transactions and could not substantiate their claimed expenses.

Total compensation of $290,830.72 was ordered.