



COURT OF APPEAL FOR ONTARIO

CITATION: 2147191 Ontario Inc. v. Springdale Pizza Depot
    Ltd., 2015 ONCA 116

DATE: 20150219

DOCKET: C59022

Doherty, Gillese and Lauwers JJ.A.

BETWEEN

2147191 Ontario Inc. and
    Jaswinder Grewal

Plaintiffs (Respondents)

and

Springdale Pizza Depot Ltd., Ranjit Singh Mahil
    and Dilawar Singh Khakh

Defendants (Appellants)

David Altshuller, for the appellants

Shane P. Murphy, for the respondents

Heard and released orally: February 6, 2015

On appeal from the order of Justice Frederick L. Myers of
    the Superior Court of Justice, dated June 6, 2014.

ENDORSEMENT

[1]

Counsel for the appellants advances one argument in his oral
    submissions. He submits that the motion judge erred in holding that the
    appellants could not avail themselves of the resale exemption from disclosure
    provided in s. 5(7)(a)(iv) and s. 5(8) of the
Arthur Wishart Act
.

[2]

On counsels submission, the evidence shows that the appellants met with
    the respondents for the purpose of determining whether the respondents would be
    suitable franchisees. He submits that the motion judge erred in holding that
    the mere fact of the meetings was enough to make the appellants more than a
    passive participant in the process and to therefore trigger the disclosure
    requirements.

[3]

This argument was made on the motion. The motion judge addressed it in
    some detail at paras. 5 through 19. He referred to the controlling case law. He
    limited himself to the unchallenged facts. Those facts revealed the following:

·

The appellants were involved in three meetings with the
    respondents in respect of the respondents acquisition of the franchise;

·

The discussions included the possibility that the respondents
    would acquire the franchise through a new franchise agreement. It was
    eventually determined that the transaction would proceed by way of assignment
    from the previous franchisee;

·

The appellants required the respondents to execute an
    acknowledgement. Among other things that document provided certain additional
    protection to the appellants.

[4]

Based on these unchallenged facts the motion judge concluded at para.
    17:

when a franchisor leads the parties to believe that it is
    starting down the path of requiring a new franchise agreement, meets the
    prospective franchisees multiple times, and requires extra consideration that
    limits the exercise of the prospective franchisees rights, I do not think it
    can be said to have been merely passive.

[5]

The motion judges finding was justified on the unchallenged facts
    before him. The finding is also consistent with the spirit of the case law from
    this court concerning the interpretation of the
Arthur Wishart Act
and
    recognizes both the overall purpose of the Act and the need to narrowly
    construe the disclosure exceptions in the Act.

[6]

The appeal is dismissed. On agreement, costs to the respondents in the
    amount of $5000, inclusive of disbursements and relevant taxes.

Doherty J.A.

E.E. Gillese J.A.

P. Lauwers J.A.


