The appellant, Welch Foods Inc., appealed a trial judgment that found it had unreasonably withheld consent for the respondent, Cadbury Beverages Canada Inc., to enter into a co-packing arrangement with a third party under their 1972 licensing agreement.
The trial judge awarded damages to the respondent for the unreasonable refusal and imposed conditions on the appellant's future discretion to withhold consent.
The trial judge also found the respondent breached the agreement by selling competing products but refused to allow the appellant to terminate the agreement, instead ordering a royalty payment.
The Court of Appeal dismissed most of the appeal, upholding the trial judge's interpretation of the agreement, the finding of unreasonable refusal, the damages award, and the refusal to terminate the agreement.
However, the Court allowed the appeal in part by removing certain conditions imposed on the appellant's future discretion to withhold consent.
