Background

• Parties: Franchise law dispute between Presse Café Franchise Restaurants Inc. and La Libelula.
• Legal Framework: Governed by the Arthur Wishart Act (Franchise Disclosure), 2000 and the Arbitration Act, 1991.
• Core Dispute: Franchisees alleged non-disclosure when entering the agreement; franchisors contested arbitral findings.

Key Issues and Court Rulings

1. Arbitral Findings on "Franchisor's Associate":

   • Arbitrator found that Marcel Hachem and Eastern Canadian Coffee Company Ltd. (ECCC) qualified as "franchisor's associates" under the Arthur Wishart Act due to their involvement in reviewing and approving the franchise application.
   • Court Decision: Denied leave to appeal. The challenge raised a factual issue, not a legal one, as required under Section 45(1) of the Arbitration Act.

2. Costs Award:

   • Arbitrator awarded costs to the franchisees, contradicting a clause in the franchise agreement that each party bears its own costs.
   • Court Decision: While the cost issue raised a legal question, the franchisors failed to meet the conjunctive tests under Section 45(1) of the Arbitration Act:
     • Importance to the parties.
     • Significant effect on their rights.

3. Enforcement of Arbitral Awards:

   • Franchisees sought court enforcement under Section 50 of the Arbitration Act.
   • Court Decision: Granted enforcement, as leave to appeal was denied.

Significance

• The case underscores the strict limits on appealing arbitral awards, especially where agreements restrict such appeals.
• Highlights the interplay between statutory duties (e.g., franchisor disclosure obligations) and contractual terms (e.g., cost allocation).

Outcome

• Franchisors’ appeal applications dismissed.
• Arbitral awards enforced: $200,978.45 was awarded by the arbitrator to the franchisees for arbitration costs.

Costs determination was deferred pending further submissions from both parties.