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Franchisor ordered to pay $100,000 settlement after wrongfully claiming former franchisee copied generic store design.
The applicants, former franchisees, brought an application to enforce a settlement agreement requiring the respondent franchisor to pay $100,000.
The respondents withheld payment, arguing the applicants breached the agreement by continuing to use the franchise's store design and branding.
The court found that the applicants' use of generic open-concept shelving and flooring did not infringe on the franchisor's protected branding.
The court held that the respondents breached the settlement agreement and the duty of fair dealing under the Arthur Wishart Act by withholding the funds.
The application was granted and the respondents' counter-application was dismissed.
Contempt sentences varied to time served and vacated after appellants purged contempt and respondents consented.
The appellants appealed their sentences of four months and two months imprisonment for civil contempt, which arose from their refusal to comply with a Second Anton Piller order.
The appellants introduced fresh evidence demonstrating that they had purged their contempt to the extent possible and expressed remorse.
As the respondents did not oppose the appeal, the Court of Appeal allowed the appeal, varying the first appellant's sentence to time served and vacating the second appellant's sentence.
