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

Licensee Gets Summary Judgment for...

Posted by | 25 September 2018

Author: Robert Jones, Law Works P.C. Editor: Ben Hanuka, Law Works P.C. In Fyfe v. Read More

Enforcing Performance Standards in...

Posted by | 15 September 2018

This article, written by Ben Hanuka, was originally published by The Lawyer’s Daily on September 7, 2018. Click here to view the published article. Read More

Court Dismisses Franchisee’s...

Posted by | 5 September 2018

Author: Robert Jones, Law Works P.C. Editor: Ben Hanuka, Law Works P.C. In Azmoon Trading Inc. v. Caffe Demetre Franchising Corp. Read More

View All

What’s New

Globe and Mail cites Ben Hanuk...

In a recent high-profile article on September 13, 2018, titled, “Tim Hortons parent settles with franchisee after locking him out of his restaurants,” the Globe and Mail... Read More

Anthony Pugh Joins Law Works a...

We are pleased to announce that Anthony Pugh, previously Student-at-Law at the firm, joined Law Works as an Associate effective October 1, 2018, upon his call to the Ontario... Read More

Law Works Welcomes New Student...

We are pleased to announce that Peter Radulescu has joined Law Works as a Student-at-Law for the 2018-2019 term. Peter obtained his J.D. and B.Sc. Read More

View All