The applicant beer distributor sought an interlocutory injunction preventing the respondent brewer from terminating a long-standing licence agreement granting exclusive Canadian distribution rights for certain beer brands.
The respondent issued a termination notice based on the applicant’s failure to meet contractual volume targets after an amendment to the licence agreement terminated automatically when industry regulatory changes did not occur.
The court held that serious issues existed regarding the continued effect of a contractual waiver of termination rights and whether the respondent was required to engage in good faith negotiations before exercising termination rights.
The court also found that the applicant would suffer irreparable harm through disruption of its product portfolio, damage to customer relationships, and potential harm to brand equity.
Balancing the parties’ respective harms and favouring preservation of the status quo pending trial, the court granted the interlocutory injunction.
