3 total
Wrongful termination found, but minimum performance limited future contract damages.
A pharmaceutical distributor sued after a retailer terminated a long-term supply agreement based on a dispute over whether contractual negative financial impact compensation and earned term extensions continued beyond the initial term.
The court held that the compensation mechanism applied throughout the defined Term, including extensions, and that the retailer wrongfully terminated the agreement on March 31, 2021.
Applying the minimum performance doctrine, the court held that extensions earned before breach could not be unwound, but post-breach damages had to be assessed on the least burdensome mode of future contractual performance, limiting the term to December 31, 2022.
The plaintiff recovered NFI compensation, lost-profit damages to be calculated, and severance-based reliance damages, while claims for reclassified product margins, warehouse losses, transportation costs, vendor settlements, and enhanced prejudgment interest were denied.
On the counterclaim, the defendants recovered withheld OTC rebates and unused prepayment funds, but their transition-period lost-sales claim failed.
Funds released from security for costs in CCAA litigation must be distributed to secured noteholders, not successful defendants.
In the context of CCAA proceedings, the Monitor sought directions on the interpretation of a litigation funding agreement and the approved Plan of Arrangement regarding the distribution of funds released from security for costs.
The successful defendants in related litigation argued the funds should be paid to them to satisfy outstanding costs awards.
The court rejected this interpretation, finding the plain wording of the agreements required the funds to be treated as Subsequent Cash on Hand for the benefit of Secured Noteholders.
The court also declined to approve the Monitor's historical activities, noting the expiry of limitation periods rendered such approval unnecessary, but granted the Monitor's discharge.
Permanent injunction granted to enforce negative covenants against deliberate contract breach.
The applicant sought a permanent injunction to restrain the respondent from breaching negative covenants in their long-term Royalty Agreement governing a collision repair shop network.
The respondent, which operated 65 shops under the applicant's brand, gave notice of its intention to unilaterally leave the relationship and rebrand its shops, openly acknowledging this would constitute a breach of contract.
The respondent argued damages would be an adequate remedy, invoking the concept of efficient breach.
The court rejected this argument, finding the damages were too complex, multi-layered, and potentially incalculable over the remaining 19-year term to make monetary compensation adequate.
The court granted the permanent injunction enforcing the negative covenants and awarded costs of $185,000 to the applicant.
