6862829 Canada Limited v. Dollar It Limited, 2010 ONCA 34

CITATION: 6862829 Canada Limited v. Dollar It Limited, 2010 ONCA 34

DATE: 20100121

DOCKET: C49806

COURT OF APPEAL FOR ONTARIO

Goudge, Cronk and Gillese JJ.A.

BETWEEN:

6862829 Canada Limited and Michael Landriault

Applicants Respondents in Cross-Application (Appellants by Cross-Appeal)

and

Dollar It Limited, Shiene Merali (a.k.a. Shane Merali) and Shikar Properties Inc.

Respondents Applicants by Cross-Application (Respondents by Cross-Appeal)

Julie Audet, for the appellants

Chris Rootham, for the respondents

Heard: December 18, 2009

On appeal from the judgment of Justice Maria T. Linhares de Sousa of the Superior Court of Justice, dated November 27, 2008.

By the Court:

[1] The appellants by cross-appeal (the “appellants”) seek to set aside the order of Linhares de Sousa J. that the respondent by cross-appeal Merali is not a “franchisor’s associate” within the meaning of s. 1(1) of the Arthur Wishart Act (Franchise Disclosure) 2000, S.O. 2000, c. 3 (the “Act”). They seek a declaration that Merali is a franchisor’s associate and a declaration that he is jointly and severally liable with the other respondents by cross appeal for the payments found owing by them pursuant to s. 6(6) of the Act.

[2] In our view, the appeal must be allowed. The appellants are entitled to both declarations.

[3] The application judge issued her reasons on November 27, 2008. She clearly and unequivocally found that both the franchisor (the respondent by cross-appeal Dollar It Limited) and the landlord (the respondent by cross-appeal Shikar Properties Inc.) are controlled by Merali. There was ample, indeed overwhelming, evidence before her to support this factual finding. There was no evidence otherwise.

[4] However, the application judge did not include in her reasons an express conclusion that Merali is a franchisor’s associate, although the appellants had sought such a declaration in their application. Following the issuance of those reasons, the appellants renewed their request for this declaration when attending before the application judge to settle the order. The application judge did not grant the request. Rather, the order as issued declared that the respondent Merali was not a franchisor’s associate.

[5] In our view, it is clear that the finding that Merali controls the franchisor renders him a franchisor’s associate for the purpose of the Act: see the definition of “franchisor’s associate” in s. 1(1) of the Act and 1490664 Ontario Ltd. v. Dig This Garden Retailers Ltd. (2005), 2005 CanLII 25181 (ON CA), 256 D.L.R. (4th) 451 (Ont. C.A.). The declaration to the contrary is therefore in error and must be set aside. The declaration that Merali is a franchisor’s associate should issue.

[6] Although in settling the order the application judge declined to alter her November 27 reasons, the same paragraph of the order that declares that Merali is not a franchisor’s associate goes on to state that the respondent was merely acting as a representative of the franchisor and the landlord. We would be reluctant to find that the application judge intended this as a finding of fact, since orders are not a forum for fact finding. However, if it is to be considered a finding of fact, it is one that is clearly unreasonable on this record and cannot stand.

[7] Since Merali is indeed a franchisor’s associate, he, along with the other two respondents by cross-appeal, is bound by s. 6(6) of the Act to make the payments to the appellants called for by that subsection. As Dig This Garden Retailers Ltd. makes clear, failure to make those payments constitutes damages that can be claimed pursuant to ss. 4(5), 7 and 8 of the Act from those who owe them, on a joint and several basis. While the appellants’ application does not explicitly recite these sections, the record clearly demonstrates that the payments required by s. 6(6) have not been made, and that a declaration that the respondents by cross-appeal are jointly and severally liable to make them is sought. Such a declaration should issue.

[8] The appeal is allowed. Costs to the appellants are fixed in the total amount of $4000, inclusive of GST and disbursements.

RELEASED: January 21, 2010 (“S.T.G.”)

“S.T. Goudge J.A.”

“E.A. Cronk J.A.”

“E.E. Gillese J.A.”