Disclosure under Arthur Wishart Act

Disclosure under the Arthur Wishart Act must be made in accordance with the Act. Substantial disclosure is not sufficient -- the Act must be complied with. See today's decision in 6792341 Canada Inc. v. Dollar It Limited, 2009 ONCA 385:

[54]          There follows the list which include items 12 and 13 quoted above.  The Act requires that the disclosure be contained in one document delivered at one time.  As this court noted in Dig This Garden at para. 18:

The requirement that disclosure occur in the form of a single document is not an empty formal requirement. The legislature clearly envisioned that the purpose of the legislation - i.e., ensuring that a decision to enter into a franchise agreement is an informed one - would best be fulfilled by giving prospective franchisees the opportunity to review a single document or documents so that all the information is before them at the same time.  It is simple common sense that people have more difficulty processing and assessing information given at different times, some of it orally, than they do information provided in a single, written document.

[55]          It is not enough to meet this requirement to simply send with the disclosure document, the franchise or other related agreements where the required information is found and reference those agreements.

[56]          The legislation requires that the information be "presented together in one part of the document".  Again, I say, the purpose is obvious.  The important financial and other key information should be located together in one part of one document to enable a reader to clearly grasp what is required and to avoid the confusion and difficulty that may arise where reference must be had to numerous other documents where the information may be located.

[57]          The object of the disclosure exercise is to enable potential franchisees to make informed decisions by having available for review in accurate, clear, and concise form all of the material information about the franchise and those involved in its operation.

[58]          To say that required information is found elsewhere in other documents does not, in my view, meet the obligation to include required information in the disclosure document.
James Morton
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