



COURT OF APPEAL FOR ONTARIO

CITATION: Cora Franchise Group Inc. v. Watters, 2017 ONCA 286

DATE: 20170406

DOCKET: C62520

Feldman, Sharpe and Roberts JJ.A.

BETWEEN

The Cora Franchise Group Inc.

Plaintiff (Defendant
    by Counterclaim)

(Respondent)

and

William Watters

Defendant (Plaintiff
    by Counterclaim)

(Appellant)

AND BETWEEN

2176693 Ontario Ltd.
    and William Watters

Plaintiffs by
    Counterclaim

(Appellants)

and

The Cora Franchise Group
    Inc.

Defendant by Counterclaim

(Respondent)

D. Andrew Thomson, for the appellant

Derek Ronde, for the respondent

Heard and released orally: March 31, 2017

On appeal from the order of Justice A.J. OMarra of the Superior
    Court of Justice, dated July 5, 2016.

ENDORSEMENT

[1]

The appellant, principal owner of 2176693 Ontario Ltd., a franchisee of the
    respondent, appeals a summary judgment against him as guarantor of the
    franchisees indebtedness.

[2]

The appellant does not dispute the franchisees indebtedness or his
    obligation as guarantor. However, he asserted by way of set-off and sought to
    assert by way of counterclaim a claim for damages arising from the loss of the
    potential sale of the franchise which failed to close when the franchisee
    refused to provide the franchisor with a release as required by the franchise
    agreement.

[3]

The motion judge found that there was no basis for the appellant to
    assert a set-off and that the franchisees claim for damages flowing from the
    loss of the sale was statute barred.

[4]

We see no error on the part of the motion judge.

[5]

The franchise agreement explicitly precludes set-off and, in any event,
    the right to damages asserted is that of the franchisee not the appellant.
    Moreover, the motion judge did not err including that any claim for damages was
    barred by the limitation period.

[6]

The franchisee commenced the successful application on October 2013 against
    the franchisor for a declaration that the provision in the franchise agreement
    requiring the release was invalid.

[7]

The motion judge correctly rejected the submission that the appellant
    only acquired the information necessary to commence a claim after the application
    and appeal judgments in that proceeding. The damages claim could have been
    brought at the same time as the declaratory proceeding and there is no merit to
    the submission that the limitation period did not start to run until after the
    Court of Appeals judgment.

[8]

The respondent cross-appeals the amount awarded by the motion judge.

[9]

We agree that the motion judge erred by awarding the amount reflected by
    the May 25, 2016 balance rather than the full extent of the debt as of the date
    of the judgment as claimed by the respondent.

[10]

Accordingly, the appeal is dismissed. The cross-appeal is allowed and a
    reference is directed to determine the amount owing as of the date of the
    judgment. Costs to the respondent fixed at $12,677.53, inclusive of
    disbursements and taxes.

K. Feldman J.A.

Robert J. Sharpe
    J.A.

L.B. Roberts
    J.A.


