DATE: 20060117

DOCKET: C42280

COURT OF APPEAL FOR ONTARIO

RE:

JAMES KENNEDY AND 928527 ONTARIO LIMITED (Plaintiffs/Appellants) – and – SUBURBAN DISTRIBUTORS LIMITED, DON PARK INC. AND STANLEY L. MEEK (Defendants/Respondents)

BEFORE:

WEILER, LASKIN and ROSENBERG JJ.A.

COUNSEL:

Robert J. Reynolds

for the appellant

Lisa S. Goodfellow

for the respondent

HEARD & ENDORSED:

January 10, 2006

On appeal from the order of Justice John F. McGarry of the Superior Court of Justice dated July 13, 2004.

A P P E A L B O O K E N D O R S E M E N T

[1] The issue on this appeal is the interpretation of a management contract.

[2] The position of the appellant is that the earliest the respondent could terminate the contract was if they did not meet the 2002 budget. There was no option to terminate if they failed to negotiate a sound business plan. Consequently the appellant would be entitled to the termination pay stipulated in the contract.

[3] We disagree. The Agreement provides for a one-year term. After that, paragraphs 2 and 3 use the term “renewable” – a permissive term, not mandatory one. Paragraph 2 contains the conditions that apply to such renewals. One of the conditions was that the parties had to agree on a “sound business plan” prior to the commencement of the year. The evidence of both parties is that they were not able to agree on a plan. The trial judge found no evidence of bad faith on the part of the respondent and after hearing all of the evidence found that the appellant was treated fairly and the respondent was justified in not renewing the contract. In our opinion, the trial judge interpreted the Agreement correctly. Because the contract had not been renewed, there was nothing to terminate and the respondent did not have to pay the appellant the amount stipulated for termination after one year. The appeal is dismissed. Costs to the respondent fixed in the amount of $7500 all inclusive.