The Supreme Court of Canada has dismissed an application for leave to appeal from two decisions of the Court of Appeal for Ontario. The Supreme Court’s decision concludes a series of hearings in which Cassels Brock successfully defeated claims for breach of contract against its client, Toyota Canada Inc.
Initially, at trial, Justice Spence of the Ontario Superior Court of Justice dismissed the $25 million claim by a prospective Lexus dealer, and several related companies, against Toyota for damages relating to the termination of an agreement by which rights had been granted to establish a Lexus dealership in downtown Toronto. At trial, Justice Spence held that an limitation of liability clause respecting Toyota’s exercise of its termination rights protected Toyota from a claim for damages in relation to the termination. Justice Spence dismissed the claim and ordered that the plaintiff pay costs in excess of $1.2 million to Toyota.
On appeal to the Court of Appeal for Ontario, the prospective dealer argued that the limitation of liability clause did not apply in the circumstances and should not protect Toyota from an unreasonable termination. The appellant also argued that the reasons for the trial judge’s $1.2 million award were insufficient and that the award should be overturned. The Court of Appeal rejected the appellants’ argument and affirmed both the trial judge’s decision and costs award. The Court of Appeal awarded costs of the appeal in favour of Toyota.
In an attempt to seek further appellate review, the appellants brought a motion to re-open the appeal to argue new grounds, including the argument that Toyota’s “termination” of the agreement was a “repudiation” at law. The Court of Appeal dismissed the motion to re-open the appeal, finding that it was not in the interests of justice to allow for new theories to be advanced post-appeal. The Court of Appeal awarded further costs in favour or Toyota.
The prospective dealer next sought leave to appeal both decisions of the Court of Appeal to the Supreme Court of Canada. With the denial of leave to appeal by Supreme Court of Canada, the decisions of trial judge and the Court of Appeal stand and the appellants have exhausted all avenues of appellate review.
Toyota was represented at trial and on appeal by Tim Pinos, Ted Frankel and Colin Pendrith.