COURT OF APPEAL FOR ONTARIO

2013 ONCA 626

DATE: 20131016

DOCKET: C56822 and C56833

MacPherson, Watt and Pepall JJ.A.

BETWEEN

2189205 Ontario Inc., Parminder Mutti and Navjot Kaur Chandi

Plaintiffs (Respondents)

and

Springdale Pizza Depot Ltd., Ranjit Singh Mahil, Dilaware Singh Khakh, 2147390 Ontario Inc. and Kulwinder Singh

Defendants (Appellants)

David S. Altshuller, for the appellants, Springdale Pizza Depot Ltd., and Dilaware Singh Khakh

Kristina A. Davies, for the appellant, Ranjit Singh Mahil

Allan D. J. Dick and Shane Murphy, for the respondents

Heard: October 7, 2013

On appeal from the order of Justice Edward M. Morgan of the Superior Court of Justice, dated February 26, 2013 and from the order of Justice Sidney Lederman of the Superior Court of Justice, dated March 1, 2013.

ENDORSEMENT

[1] The proceedings in this case arise out of the valid rescission of a franchise agreement. The appellants are the owners of the franchise chain. The respondents operated a franchise for a few months, then rescinded the agreement because the appellants had failed to provide proper disclosure under the Arthur Wishart Act, 2000, S.O. 2000, c. 3.

[2] The respondent franchisees obtained partial summary judgment against the appellants. On a reference, the Master determined the amount of compensation to be paid by the appellants to the respondents under s. 6(6) of the Wishart Act.

[3] On a separate motion before the Master under rule 26.01, the appellants sought leave to amend their statement of defence and cross-claim to add a defence of equitable set-off. The Master permitted them to do so.

[4] Both aspects of the Master’s decision were appealed. Lederman J. dismissed the appellant’s motion to oppose confirmation of the Master’s Report on the Reference. Morgan J. allowed the respondents’ appeal and limited the equitable set-off amendment to the respondents’ claim under s. 7 of the Wishart Act.

[5] The appellants contend that Morgan J. erred in concluding that the Master intended the set-off amendment order to apply only to the claims advanced by the respondents under s. 7 of the Wishart Act. We disagree.

[6] The motion to amend was heard about two years after the respondents had been granted partial summary judgment on the s. 6 claim and several months after the Master had made his report on the reference. If set-off were to be raised in connection with the s. 6 claims, it should have been raised when the claims were adjudicated. We see no error in Morgan J.’s conclusion that the Master intended to limit the application of the set-off amendment to the then outstanding s. 7 claims of the respondent.

[7] The appellants contend that the Master and Lederman J. erred in principle and misapprehended the evidence in reaching their conclusions about the respondents’ s. 6 claims. Again, we disagree.

[8] The Master was the primary finder of fact. Provided his findings of fact were reasonable and rooted in the available evidence, the reviewing judge, as Lederman J. recognized, was bound to accord those findings deference. The Master and reviewing judge were well aware of the deficiencies alleged in the respondents’ proof. The findings made are grounded in the evidence, untainted by any misapprehensions, errors in principle, or palpable and overriding errors.

[9] We are also of the view that the Master and Lederman J. were correct in their interpretation and application of the subsections of s. 6 of the Wishart Act.

[10] The appeals are dismissed. The respondents are entitled to their costs of these appeals which we fix, with the agreement of counsel, at $8,000.00, inclusive of disbursements and all applicable taxes.

“J.C. MacPherson J.A.”

“David Watt J.A.”

“S.E. Pepall J.A.”