Executive Summary: Key Legal and Evidentiary Issues

• The central dispute arose from the termination of a franchise without sufficient notice, with the franchisee receiving only two days' notice instead of the required thirty.
• Both parties alleged that the other had breached the Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000, c. 3, though neither claim was ultimately upheld.
• Plaintiffs sought $1,500,000 in damages but were awarded only $10,000, raising the question of whether their net recovery fell below the Small Claims Court threshold.
• Defendants' counterclaims included nuisance, defamation, intentional interference with economic relations, and trespass, the vast majority of which were dismissed.
• Costs allocation was disputed, with plaintiffs seeking $222,299.45 and defendants seeking $150,000, each arguing the other bore greater responsibility for the litigation's scope.
• Divided success on both sides led the court to order each party to bear its own costs.

Facts of the case

Queen Mamma Ltd. and Ajmal Anwari (the plaintiffs) sued 2755060 Ontario Inc. (operating as Mamma's Pizza), Joginder Singh Khakh, Mamma's Marketing Inc., and 2755067 Ontario Inc. (the defendants) for wrongful termination of a franchise. The defendants countersued, pleading claims of nuisance, defamation, intentional interference with economic relations, and trespass, and seeking damages of approximately $1,400,000. Both parties also alleged that the other had breached the Arthur Wishart Act (Franchise Disclosure), 2000.

Contractual and statutory provisions at issue

At the heart of the trial was the franchise agreement governing the parties' relationship, specifically the notice requirement before termination. The court found that the franchise owner — referred to as "Ozzy" in the trial decision — was entitled to thirty days' notice before his franchise could be terminated, yet received only two days. Additionally, both sides raised obligations under the Arthur Wishart Act, Ontario's franchise disclosure statute, though the court found that neither party had breached it.

Reasoning and analysis

In the trial decision released on March 24, 2026 (2026 ONSC 1686), the court dismissed both the main claim and the counterclaim in large part. The plaintiffs proved the notice breach and were awarded $10,000, but failed to establish economic loss or any equitable remedy. The defendants succeeded only in trespass — for which nominal damages of $100 were awarded — and in recouping franchise royalties of $1,275; their remaining claims, including the $1,400,000 damages claim, were not proved.

On the costs decision (2026 ONSC 3040), the court applied Rule 57.01, under which the overriding consideration is what is reasonable and what the other party would expect to pay. The court also noted Rule 57.05(1), which permits denial of costs to a plaintiff whose recovery falls within the Small Claims Court jurisdiction. The plaintiffs argued they were the successful party and pointed to a $200,000 settlement offer, while the defendants argued the plaintiffs' net recovery of $8,625 — after offsetting amounts awarded to the defendants — placed the matter below the Small Claims threshold and warranted a costs award in the defendants' favour. The court rejected both positions, finding that the defendants' unsuccessful claims materially increased the length, complexity, and costs of the proceedings, and that neither party was more successful than the other.

Ruling and overall outcome

The court concluded that both parties achieved very modest success and that neither outperformed the other to a degree that would justify a costs award. Neither Queen Mamma Ltd. and Ajmal Anwari nor the defendant parties were awarded costs; each party was ordered to bear its own. No monetary costs award was granted to either side in the costs decision.