The Ontario Superior Court of Justice recently granted partial
summary judgment in favour of a franchisor in 2176693 Ontario
Ltd. et al. v. The Cora Franchise Group Inc. et
al.,1 a long-running action commenced by a
This decision confirms the suitability of motions for partial
summary judgment in the franchise context where the franchisor is
faced with a "kitchen sink" claim containing unfounded
allegations amenable to being decided without the time and expense
of a trial. The court cautioned would-be plaintiffs to draft narrow
and focused claims, as "surplusage" will only interfere
with the efficient prosecution of a case.
Cassels Brock acted for the franchisor on the motion.
The plaintiff franchisee commenced an action in 2011 raising a
myriad of allegations and numerous causes of action, including
misrepresentation, breach of contract and various claims under the
Arthur Wishart Act (Franchise Disclosure), 2002, SO 2000,
c 3, in a 53 page, 128 paragraph, amended claim, even after a
successful preliminary motion to strike brought by the
Faced with what amounted to a "kitchen sink" claim,
purporting to raise issue with many aspects of the franchise
relationship, including disclosure, construction, pre- and
post-opening training and support (including marketing support),
the franchisor brought a motion for partial summary judgment to
narrow the issues for discovery and trial. As recognized by the
motion judge, at its heart the action essentially involves a claim
of financial misrepresentation, with the excess interfering with
the efficient prosecution of the case.
The Court ultimately found in favour of the franchisor and
dismissed 14 causes of action (some of which were unopposed by the
franchisee) on the basis that they were statute-barred under the
Limitations Act, 2002, SO 2002, c. 24 and/or without any
basis in law or fact.
Of particular interest to franchisors, the Court confirmed that
there is no common law tort dealing with the form and content of a
franchise disclosure document that exists separate and apart from
the statutory obligations imposed by the Wishart Act.
Moreover, franchisees will be held to the strict two year
limitation period under the Limitations Act, which runs
from the time they knew or reasonably ought to have known a claim
arose, in this case, from when they received invoices for opening
and construction costs. The Court rejected the franchisee's
argument that the distractions caused by opening the franchise
delayed discoverability of the claim, also noting that an expert
opinion was not required to determine if a cause of action arising
from such costs existed.
Of more general interest, the Court also confirmed the
importance of a court-sanctioned schedule for a motion, noting that
requests for discovery must be made before the hearing of a summary
judgment motion. Plaintiffs cannot defeat a summary judgment motion
by merely asserting at the hearing that discovery (or other
evidence) is required. As is well-established, parties responding
to a summary judgment motion must "lead trump" or risk
Finally, the Court recognized that the franchisee's
overreaching claims in this case were the cause of its legal
misfortunes, advising that "if parties want an efficient and
affordable remedy and process, they should consider focusing on the
strength of the causes and shedding the junk that gets in the way
and gives the other side ammunition."
Key Take-Away Principles
As always, plaintiffs should carefully consider the scope of a
potential action and resist the temptation to include claims that
have no legal or factual basis. In the franchise context, this
decision confirms that partial summary judgment may serve as a
useful tool in a franchisor's tool belt where a franchisee (or
any potential plaintiff) commences an unwieldy "kitchen
sink" action and there are discrete issues that are amenable
to being decided without a full trial. The potential tactical and
cost saving benefits of such a motion are significant. An early
finding on certain claims may bring the parties closer to a
resolution and/or significantly narrow the issues for documentary
disclosure and discoveries and, ultimately, for trial.
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