DATE: 20010124

DOCKET: C31021

COURT OF APPEAL FOR ONTARIO

RE: 965833 ONTARIO LIMITED AND THOMASZ DZWONEK (Plaintiff/Respondent) v. TERRY TSIANOS, PRIME TIME DONUTS INC. AND MAREK S. MALICKI (Defendant/Appellant)

BEFORE: FINLAYSON, ABELLA and FELDMAN JJ.A.

COUNSEL: Ronald P. Bohm For the appellant

Rubin Dexter For the respondent

HEARD: JANUARY 18, 2001

RELEASED ORALLY: JANUARY 18, 2001

On appeal from the judgment of Colin L. Campbell J. dated September 22, 1998.

E N D O R S E M E N T

[1] This action involved an agreement of purchase of a franchise donought shop. It proceeded both on the basis of alleged pre-contractual misrepresentation and fraud by the vendor, and on the basis of breach of contract.

[2] The trial judge ultimately dismissed the purchaser’s claim for pre-contractual misrepresentation and fraud, but granted recision of the agreement on the basis of a discrepancy in the agreement of purchase as to the minimum rent, amounting to a misrepresentation by the vendor.

[3] It turned out that the landlord increased the square footage upon which the minimum or base rent per square foot was calculated, by in excess of 200 square feet. This occurred after the purchaser had entered the premises but before the closing of the agreement.

[4] The trial judge found that the purchaser relied on the minimum rent provision set out in the agreement to conclude that his gross rent would initially not exceed $6,000, which for the purchaser was an important condition for the viability of the transaction.

[5] This was a conclusion which the trial judge was entitled to reach on the evidence. Although the agreement to lease between the vendor and the landlord contains a clause which allows the landlord to charge the same per square foot rent as “additional rent” for the common areas as for the 1713 square feet of the demised premises, the evidence was conflicting as to whether the agreement to lease was attached to the agreement of purchase between the parties.

[6] The trial judge determined that this was a case where the remedy of recision should apply. The appellant has failed to satisfy us that there was such an error in his reasons that would justify an intervention.

[7] The appeal is therefore dismissed with costs.

"G.D. Finlayson J.A."

"R. S. Abella J.A."

"K. Feldman J.A."