COURT OF APPEAL FOR ONTARIO
RE:
DUSAN RMUS carrying on business as D‑R PACKAGING (Plaintiff/Respondent) – and RAY RADOJEVIC and MEDI‑ROYALE PLASTEX INC. (Defendant/Appellant)
BEFORE:
MCMURTRY C.J.O., GILLESE and BLAIR JJ.A.
COUNSEL:
Anthony M. Speciale
for the appellant
Bryan D. Rumble and Darcy L. Davison‑Roberts
for the respondent
HEARD:
June 15, 2004
On appeal from the judgment of Justice Nancy L. Backhouse of the Superior Court of Justice dated August 8, 2002.
E N D O R S E M E N T
Released Orally: June 15, 2004
1The appellant advanced a number of grounds of appeal but at the hearing pressed only three.
The appellant contends that once the trial judge found there was no concluded consulting agreement, she could not have found an exclusive supply agreement. We disagree. On the facts, the two arrangements between the parties were not so interrelated that a finding that there was no concluded consulting agreement was fatal to a finding of an exclusive supply agreement.
The appellant argues that the Statement of Claim was so “grossly deficient” that the trial judge was without jurisdiction to make the finding that an exclusive supply agreement had been concluded. In our view, this argument must fail for two reasons. First, the amended Statement of Claim pleads both a consulting services agreement and an exclusive supply arrangement. Second, it is apparent from a reading of the transcript -- see for example p. 103 of the Respondent’s Compendium -- that counsel were aware that the existence of an exclusive supplier agreement was a central issue.
The appellant argues that the trial judge erred in finding an exclusive supply agreement. Specifically, he says that the absence of agreed upon terms such as pricing, delivery, quantity and quality rendered the arrangement an “agreement to agree” rather than a concluded agreement.
A contract can be found to exist even if not all of its terms have been expressly agreed upon. Normally, to find an enforceable contract for the supply of goods, one would expect to find either agreement as to price or agreement as to the mechanism for determining price. However, while it would have been preferable for the trial judge to make clear her findings as to the agreed upon terms of the exclusive supplier agreement, in the circumstances of this case, we are satisfied that there was an implied term that raw materials would be provided at a reasonable price. We are of this view because of the following findings of the trial judge, which findings are entitled to deference:
(i) the plaintiff was given the right to be the exclusive supplier of all raw materials;
(ii) the agreement was concluded at an early stage in the development of the appellant’s business when the precise materials needs would not have been known; and
(iii) the plaintiff had provided consideration for the contract, at the outset, in the form of the business proposal, the know‑how and the introduction of Peter Ashton.
2In respect of the quantification of damages, again we note that it would have been preferable had the trial judge given more fulsome reasons including how she determined that twelve months was the appropriate period and 15 per cent the appropriate profit margin, but we are not persuaded that she was in error in so concluding. There was evidence to support the rate that she applied (i.e. 15 %) and, taking into account a combination of the consideration that the respondent gave, the fact that it was supplied at the outset of the development of the appellants’ business, and the duration of the relationship between the parties, we cannot say that the twelve month period was in error.
3Accordingly, the appeal is dismissed with costs to the respondent fixed in the amount of $7,500.00, inclusive of GST and disbursements.
“R. Roy McMurtry C.J.O.”
“E. E. Gillese J.A.”
“R. A. Blair J.A.”