The appellant franchisor appealed a Small Claims Court decision finding it vicariously liable for a fire that occurred at a franchisee's location and caused smoke damage to the respondent's neighbouring business.
The Divisional Court allowed the appeal, finding the trial judge erred in law by characterizing the franchisee as an employee rather than an independent contractor.
The court further held that the trial judge erred by inferring the franchisee's negligence solely from its failure to attend the trial, as there was no evidence as to the cause of the fire.
The action against the franchisor was dismissed.
