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
BackBy: Anthony Pugh, Law Works Editor: Ben Hanuka, Law Works In 1777453 Alberta Ltd. v. Got Mold Disaster Recovery Services Inc. Read More
By: Anthony Pugh, Law Works Editor: Ben Hanuka, Law Works In 2212886 Ontario Inc. v. Obsidian Group Inc. Read More
By Ben Hanuka, Law Works This article was originally published in The Lawyer’s Daily as a two-part series on January 22 and 26, 2021. Read More
We are pleased to announce that Ben Hanuka was listed in the Lexpert Special Edition: Litigation 2020. Read More
We are pleased to announce that Ben Hanuka will be moderating a roundtable discussion at Ontario Bar Association’s upcoming annual franchise law conference on November... Read More
We are pleased to announce that Ben Hanuka will be speaking at The Continuing Legal Education Society of British Columbia's upcoming franchise program, Franchise Update 2020,... Read More