Leading Canadian
FRANCHISE & BUSINESS LAW FIRM

Active Green & Ross (Mendoza)

Full Case Name: Mendoza v Active Tire & Auto Inc., 2017 ONCA 471

This is a leading franchise decision of the Court of Appeal for Ontario. It was the subject matter of commentary by many lawyers in the Ontario Franchise Law Bar and is an important court decision in the development of franchise disclosure law.

The Court of Appeal for Ontario reversed the decision of the motion judge and granted summary judgment for rescission in favour of the franchisee purchaser, Mendoza, based on the disclosure deficiencies in AGR’s disclosure document. It held that the disclosure obligations are not conditional on the knowledge or conduct of a franchisee, and that the disclosure deficiencies in this case were significant. As a result, it held that AGR had not provided a disclosure document within the meaning of the Arthur Wishart Act (Franchise Disclosure), 2000.

In some ways, the Court of Appeal in this decision applied the existing law to the facts. There is a wide body of jurisprudence in Ontario, both at the trial and appellate level, holding that improperly completed franchisor’s certificates and non-compliant financial statements are alone fatal, amounting to “no disclosure at all” and allowing rescission. However, this case is also the first Court of Appeal decision expressly holding that the test for a franchisor’s compliance with its disclosure obligations under the Act is objective; that the focus must be on the nature of the deficiency and its impact on the disclosure requirements on a reasonable (not subjective) standard.

To read our firm’s article about this decision on our Franchise Law Blog click here: Court of Appeal for Ontario Provides Important Clarification About Franchise Rescission Test

Back

Franchise Law Blog

Ontario Court Enforces Costs Award...

Posted by | 25 November 2018

Author: Robert Jones, Law Works P.C. Editor: Ben Hanuka, Law Works P.C. In Pet Valu Canada Inc. v. Read More

Court Dismisses Injunction Applications...

Posted by | 20 November 2018

Author: Robert Jones, Law Works P.C. Editor: Ben Hanuka, Law Works P.C. In 526901 B.C. Ltd. v. Dairy Queen Canada Inc. Read More

Quebec Court Certifies Franchise Class...

Posted by | 15 November 2018

Author: Robert Jones, Law Works P.C. Editor: Ben Hanuka, Law Works P.C. In Sopropharm c. Jean-Coutu Group (PJC) Inc. Read More

View All

What’s New

Ben Hanuka Authors Franchise A...

We are pleased to announce that the Canadian Arbitration and Mediation Journal will publish in its upcoming issue a paper authored by Ben Hanuka about franchise arbitrations. Read More

Ben Hanuka Co-Presented about ...

We are pleased to announce that Ben Hanuka co-presented about 2018 case developments at the recent Annual Franchise Law Conference of the Ontario Bar Association, which was... Read More

Ben Hanuka Cited in Ongoing Ti...

We are pleased to announce that the Globe and Mail cited Ben Hanuka’s opinion in another high-profile article about the ongoing Tim Horton’s class actions. Read More

View All