On January 26, 2017, CFA voiced its concerns regarding the scope of required disclosure of "material facts" in the Ontario Superior Court's decision in Raibex v. ASWR Franchising Corp. through its application for intervener status at the Court of Appeal for Ontario.  CFA represents the interests of the franchise industry and does not  seek to become involved in private disputes between franchisors and franchisees. However, the Ontario Superior Court's interpretation of "material fact" in Raibex raises serious concerns for the industry as a whole, as it may be interpreted as dramatically expanding disclosure obligations such that disclosure may be premature if all material facts are not known and disclosed prior to contracting. This is contrary to longstanding site selection and leasing practices of many franchisors and franchisees, and creates uncertainty as to when disclosure may be given and franchise agreements can be signed. Delaying disclosure in this manner is potentially problematic to both franchisors and franchisees, and would have far-reaching consequences for franchising across Canada.

It is difficult to obtain intervener status in Canadian courts and CFA was not granted the right to intervene in the appeal itself. However, CFA's decision to seek intervener status was influenced by the fact that neither the franchisor nor the franchisee had argued that the Ontario Superior Court's decision in Raibex was contrary to the Regulations under the Arthur Wishart Act; at the hearing, both the franchisee's and the franchisor's counsel agreed to address the points CFA intended to raise as intervener. CFA is therefore hopeful that its views will be represented at the appeal as a result of our efforts to seek intervener status.

Although this was not the preferred outcome, CFA successfully put its arguments before the Court of Appeal.  Associate Chief Justice Hoy recognized CFA's expertise and credibility and the "high quality" of its written argument, and took the unusual step of including a thorough summary of CFA's arguments in her decision.

CFA thanks Osler, Hoskin & Harcourt LLP for their work on this intervener status application. For more information please contact Lorraine McLachlan, President and Chief Executive Officer at lmclachlan@cfa.ca or 1-800-665-4232 ext. 222.