Custom Cycle (1996) Ltd. v. Honda Canada Inc., (2009) 342 Sask.R. 18 (QB)

• Judge: Barclay, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: October 29, 2009
• Jurisdiction: Saskatchewan
• Citations: (2009), 342 Sask.R. 18 (QB);2009 SKQB 427

Custom Cycle Ltd. v. Honda Can. Inc. (2009), 342 Sask.R. 18 (QB)

MLB headnote and full text

Temp. Cite: [2009] Sask.R. TBEd. NO.008

Custom Cycle (1996) Ltd. (plaintiff) v. Honda Canada Inc. (defendant)

(2008 Q.B.G. No. 1028; 2009 SKQB 427)

Indexed As: Custom Cycle (1996) Ltd. v. Honda Canada Inc.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Barclay, J.

October 29, 2009.

Summary:

The plaintiff had been an authorized dealer of a number of Honda power products (not cars) pursuant to a multi-product dealership agreement since 1994. In June 2007, Honda notified the plaintiff the agreement would not be renewed after December 31, 2008. The plaintiff conceded that Honda could terminate the agreement. However, it alleged that Honda interfered with the plaintiff's attempted sale of the Honda part of its business to a third party and thereby breached an implied contractual duty to act in an honest, fair and good faith manner and intentional interfered with the plaintiff's economic relations with the third party. Honda applied to strike out the statement of claim on the ground that it was devoid of merit and therefore frivolous and vexatious under rule 173(c) of the Rules of Court.

The Saskatchewan Court of Queen's Bench dismissed the application.

Practice - Topic 2231

Pleadings - Striking out pleadings - Grounds - False, frivolous, vexatious or scandalous - The plaintiff had been an authorized dealer of a number of Honda power products (not cars) pursuant to a multi-product dealership agreement since 1994 - In June 2007, Honda notified the plaintiff the agreement would not be renewed after December 31, 2008 - The plaintiff conceded that Honda could terminate the agreement - However, it alleged that Honda interfered with the plaintiff's attempted sale of the Honda part of its business to a third party and thereby breached an implied contractual duty to act in an honest, fair and good faith manner and intentional interfered with the plaintiff's economic relations with the third party - Honda applied to strike out the statement of claim on the ground that it was devoid of merit and therefore frivolous and vexatious under rule 173(c) of the Rules of Court - The Saskatchewan Court of Queen's Bench dismissed the application - There was case law to the effect that commercial contracts contained implied terms of good faith - However, the law appeared to be unsettled - It could not be said that this was a hopeless action - The plaintiff had an arguable case - Further, there was conflicting evidence.

Practice - Topic 2250

Pleadings - Striking out pleadings - Bars - Law still evolving - [See Practice - Topic 2231 ].

Cases Noticed:

Sagon v. Royal Bank of Canada et al. (1992), 105 Sask.R. 133; 32 W.A.C. 133 (C.A.), refd to. [para. 29].

Goertz (Bankrupt) v. College of Physicians and Surgeons (Sask.) (1997), 156 Sask.R. 310 (Q.B.), refd to. [para. 30].

Cherkewich Yost & Heffernan Law Office v. Green Lake (Northern Village), [2000] 10 W.W.R. 724; 196 Sask.R. 13; 2000 SKQB 306, refd to. [para. 31].

Bombardier Credit Ltd. v. Kostuchuk et al., [1994] 10 W.W.R. 257; 123 Sask.R. 89; 74 W.A.C. 89 (C.A.), refd to. [para. 31].

Shelanu Inc. v. Print Three Franchising Corp. (2003), 172 O.A.C. 78; 226 D.L.R.(4th) 577; 64 O.R.(3d) 533 (C.A.), refd to. [para. 35].

McKinlay Motors Ltd. v. Honda Canada Inc. (1989), 80 Nfld. & P.E.I.R. 200; 249 A.P.R. 200; 46 B.L.R. 62 (Nfld. T.D.), refd to. [para. 36].

Newswest Corp. v. Glendar Holdings Ltd. et al., [2001] 9 W.W.R. 312; 209 Sask.R. 56; 2001 SKQB 336, refd to. [para. 37].

Bartok v. Shokeir, [1999] 2 W.W.R. 386; 171 Sask.R. 67 (Q.B.), refd to. [para. 39].

671122 Ontario Ltd. v. Sagaz Industries Canada Inc. et al. (1998), 67 O.T.C. 22; 40 O.R.(3d) 229 (Gen. Div.), refd to. [para. 42].

Counsel:

Catherine A. Sloan, for the plaintiff;

James S. Ehmann, Q.C., for the defendant.

This application was heard before Barclay, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on October 29, 2009.