Lloyd Hoffer

Following their successful motion for an interlocutory injunction restraining the defendant from terminating their franchise business, the plaintiffs sought partial indemnity costs of $115,500.

The defendant argued costs should be reserved to the trial judge or reduced by half.

The court rejected reserving costs, noting the action was at an early stage.

Noting the importance of the issues and the defendant's failure to provide its own costs outline for comparison, the court fixed costs payable to the plaintiffs at $95,000 inclusive of disbursements and HST.

The plaintiffs, a franchisee and its principal, moved for an interlocutory injunction to prevent the defendant franchisor from terminating their franchise agreement pending trial.

The franchisor had issued a notice of termination alleging numerous breaches of health and safety standards following intensive inspections.

The plaintiffs argued the franchisor breached its duty of good faith and fair dealing under the Arthur Wishart Act and common law by enforcing standards with unreasonable severity to appropriate the profitable business.

Applying the RJR-MacDonald test, the court found a serious issue to be tried, irreparable harm in the potential destruction of the business, and the balance of convenience favouring the plaintiffs.

The interlocutory injunction was granted.