Buying Time: How a Stay Pending Appeal Saved a Franchise Business

The situation

Jae-won and Miriam had built a small but genuine commercial empire over a decade: five locations of a national coffee franchise across London, and two mixed-use buildings they owned and leased out as commercial landlords. Running a franchise portfolio alongside a landlord business meant they were used to managing risk on both sides of the table — as tenants negotiating leases with their franchisor's requirements, and as landlords dealing with their own tenants. What they had not dealt with before was a construction dispute that grew large enough to threaten both businesses at once.

In one ambitious year, they decided to renovate three of their franchise units and rebuild a commercial space in one of their own buildings at the same time, and hired a contractor, Shira, to run all four projects together under one arrangement, on the logic that a single contractor across all four sites would be simpler to manage and cheaper than four separate ones.

The work did not go smoothly. Costs climbed well past the original estimates, two of the four sites ran months behind schedule, and Jae-won and Miriam started withholding payment on invoices they believed were inflated or tied to work that had not been done properly. Shira registered a construction lien against one of the properties and sued for the unpaid balance, which by the time the claim was filed had grown to roughly $950,000 once extras and financing charges were included. Jae-won and Miriam counterclaimed for close to $400,000 in deficiency repair costs and losses from the delayed franchise openings, arguing that Shira's own scheduling failures were the real cause of the cost overruns.

The judgment that changed everything

The case went to trial about two years after the lien was filed, which is a fairly ordinary timeline for a construction dispute of this size once expert reports, examinations, and scheduling are accounted for. The trial judge largely accepted Shira's version of events, found that most of the withheld payments were owed, and awarded Shira approximately $850,000 after netting off a modest allowance for some of the deficiency claims.

Jae-won and Miriam believed the trial judge had made a significant legal error in how the contract's payment terms were interpreted, and they had solid grounds to appeal. But a judgment in Ontario is enforceable the moment it is issued, unless a court orders otherwise. Filing a notice of appeal does not, on its own, pause anything. Within days of the judgment, Shira's lawyers signalled they intended to register the judgment against both commercial properties and pursue garnishment of the franchise business accounts to collect while the appeal was still being prepared.

That was the emergency that brought Jae-won and Miriam to Treadstone Law. An $850,000 judgment does not just cost money — enforced abruptly, it can freeze operating accounts, trigger defaults under existing financing on the commercial buildings, and disrupt payroll across five franchise locations. Win the appeal a year later, and the damage from enforcement in the meantime cannot be undone.

What we did

1. Filed the notice of appeal immediately, then moved for a stay. A stay pending appeal is a separate motion, heard by a judge, asking the court to pause enforcement of the judgment while the appeal is decided. It is not automatic and is not guaranteed. Courts weigh whether the appeal raises a genuine, arguable issue, whether the appealing party will suffer harm that money alone cannot fix if enforcement proceeds, and where the overall balance of fairness lands between the two sides.
2. Built the harm evidence carefully. A general claim of financial strain rarely persuades a court to pause a judgment. We worked with Jae-won and Miriam to document exactly what enforcement would do: which accounts would be garnished, what loan covenants on the commercial buildings would be triggered by a registered judgment, and how five franchise locations and their staff would be affected within weeks, not months.
3. Offered meaningful security instead of a bare request. A court is more comfortable granting a stay when the other side isn't left exposed if the appeal fails. We proposed paying a substantial portion of the judgment into court, held pending the appeal's outcome, so Shira's ultimate right to be paid was protected either way.
4. Kept the appeal itself moving on a realistic schedule. A stay motion succeeds partly on the credibility of the appeal behind it. We ensured the appeal record and factum work were genuinely underway, not just promised, because a court granting a stay wants confidence the appeal will be pursued in good faith and not used simply to delay payment indefinitely.
5. Opened settlement discussions once the stay was in place. A stay changes the leverage on both sides. Shira no longer had the pressure of an unresolved judgment sitting unpaid and unsecured, and Jae-won and Miriam no longer faced the immediate threat of garnishment. That shift created room for a negotiated resolution that avoided the cost, delay, and uncertainty of waiting a further year or more for the appeal court's decision.

The outcome

The motion for a stay pending appeal succeeded. The judge accepted that the appeal raised a genuinely arguable question about how the payment terms should have been interpreted, and that immediate enforcement against a live franchise operation and two leveraged commercial properties would cause harm that a later payment, if the appeal succeeded, could not fully repair. As a condition of the stay, Jae-won and Miriam paid roughly $300,000 into court, with the balance of the judgment held from enforcement.

Obtaining the stay took roughly six weeks from the day the judgment was issued to the day the order was granted, a period during which Jae-won and Miriam kept all five franchise locations running without the interruption a garnishment order would have caused. That gap mattered: it gave both sides time to weigh the dispute against real business consequences instead of legal principle alone, which is often what actually opens the door to a negotiated settlement after a hard-fought trial loss.

With that breathing room, both sides negotiated rather than waiting for the appeal court's decision. Shira's litigation team recognized that a full year of further legal costs and continued uncertainty carried its own risk, even with a trial win in hand. Jae-won and Miriam recognized that overturning the judgment entirely on appeal was a real possibility but far from certain, and continuing to fight risked adding another six figures in legal costs to whatever they ultimately owed.

The parties settled at roughly $650,000, inclusive of the amount already paid into court, payable over an agreed schedule rather than in one lump sum. Shira recovered meaningfully less than the trial judgment but avoided the delay and risk of the appeal. Jae-won and Miriam paid substantially less than the $850,000 judgment and, just as importantly, avoided the immediate disruption to their franchise business and commercial financing that enforcement would have caused. Neither side left the dispute feeling they had won outright, which is a fairly accurate description of most negotiated settlements reached after a hard-fought trial loss.

The lien registered against one of the commercial properties was discharged as part of the settlement, and Jae-won and Miriam were able to refinance that building on normal terms within a few months, something that would have been far more difficult with an $850,000 judgment registered against it.

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