Home Instead v. 2444674, 2016 ONSC 4562

CITATION: Home Instead v. 2444674, 2016 ONSC 4562

COURT FILE NO.: CV-15-538478 and CV-15-538438 DIVISIONAL COURT FILE NO. CV-673/15

DATE: 2016-07-18

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Home Instead Inc., Plaintiff AND: 2444674 Ontario Inc., Lindsay Reid, 2458317 Ontario Inc., and Brian Weinert, Defendants

AND BETWEEN: 2444674 Ontario Inc., and 2458317 Ontario Inc., Applicants AND: Home Instead Inc., Respondent

BEFORE: Stewart J.

COUNSEL: Geoffrey B. Shaw, Derek Ronde and Carly Cohen, for the Plaintiff/Respondent Michael B. Miller and Ted A. Kalnins, for the Defendants/Applicants

HEARD: In Writing

ENDORSEMENT

[1] 2444674 Ontario Inc. and 2458317 Ontario Inc., (the “Franchisees”) seek leave to appeal from the order of Myers J. dated December 5, 2015. In that order, Myers J. refused to restrain Home Instead Inc. (“the Franchisor”) from terminating the agreements with the Franchisees and granted an injunction restraining the Franchisees from continuing to operate their businesses under franchise agreements with the Franchisor.

[2] The Franchisor takes the position that the test for leave to appeal has not been met in this case.

Test for leave to Appeal

[3] The test for granting leave to appeal under Rule 62.02(4) is well-settled. Leave should not be easily granted and the test to be met is a very strict one.

[4] There are two possible branches upon which leave may be granted. Both branches involve a two-part test and, in each case, both aspects of the two-part test must be met before leave may be granted.

[5] The Franchisees do not seek leave under Rule 62.02(4) (a).

[6] Under Rule 62.02(4) (b), the moving party must establish that there is good reason to doubt the correctness of the order in question and that the proposed appeal involves matters of such importance that leave to appeal should be granted. It is not necessary that the judge granting leave be satisfied that the decision in question was actually wrong – that aspect of the test is satisfied if the judge granting leave finds that the correctness of the order is open to very serious debate (see: Nazari v. OTIP/RAEO Insurance Co., 2003 40868 (ON SC), [2003] O.J. No. 3442 (S.C.J.); Ash v. Lloyd’s Corp. (1992), 8 O.R. (3d) 232 (Gen. Div.)). In addition, the moving party must demonstrate that any matters of importance that go beyond the interests of the immediate parties and involve questions of general or public importance relevant to the development of the law and administration of justice (see: Rankin v. McLeod, Young, Weir Ltd. (1986), 1986 2749 (ON SC), 57 O.R. (2d) 569 (H.C.J.); Greslik v. Ontario Legal Aid Plan (1988), 65 O.R. (2d) 11 (Div. Ct.)).

Analysis

[7] On December 4, 2015 Myers, J. ordered that the Franchisees must immediately cease operating their franchises.

[8] The orders from which leave to appeal is sought were based upon findings by Myers, J. that:

(a) The Franchisor had established a strong prima facie case that the Franchisees deliberately misled it and operated their franchises in common ownership despite the Franchisees’ express pre-contractual assurances to the contrary, contractual prohibitions in the franchise agreements, and the Franchisor’s written policy prohibiting ownership of multiple franchises of which the Franchisees were well aware;

(b) The Franchisor, a business that provides services to vulnerable people, would suffer irreparable harm to its goodwill, reputation and the integrity of the franchise system if the injunction were not granted, which harm could not be compensated in damages;

(c) the balance of convenience favoured the Franchisor; and

(d) the Franchisees had failed to provide any meaningful undertakings as to damages.

[9] Myers, J. noted in his reasons for decision the “serious credibility issues” the Franchisees would have to surmount at trial. He had considered the extensive evidence before him and, in particular, the contractual terms governing the relationship of the parties. He noted that the Franchisees had refused to produce any “bank records, loan documents, minute books and the like to substantiate their bald denial of joint ownership,” which left them open to devastating attack by the Franchisor and an unfavourable inference on the motion.

[10] The granting of interim injunctive relief is a discretionary order. The motion judge applied the correct test to the substantial body of evidence before him which supports the result. In my view, there is no good reason to doubt the correctness of the decisions sought to be appealed.

[11] Likewise, the decisions are of importance to no one other than the litigants. No matter of such importance going beyond the interests of the immediate parties or involving questions of general or public importance is raised.

[12] The defendants therefore have failed to satisfy the requirements for leave under Rule 62.02(4) (b).

Conclusion

[13] For these reasons, leave to appeal is denied.

Costs

[14] I have reviewed costs submissions delivered by the parties. The successful Franchisor shall have its costs of the leave to appeal motion fixed at $7500.00, payable by the Defendants/ Franchisees jointly and severally within 30 days of the date of release of this decision.

Stewart J.

Date: July 18, 2016