A recent Appeal Court decision in Canada may finally serve as the end point in a case, in which an Ontario New Holland dealer alleged the mainline manufacturer improperly terminated a dealership agreement.

The Court of Appeal for Ontario earlier this year upheld an original Tribunal court ruling that CNH Canada must pay Chesterman Farm Equipment $200,000 in damages and pre-judgment interest as well as restoring Tribunal’s Costs awards in the amount of $376,338.95 for failing to follow the Ontario Farm Implements Act and its Regulation 123/06.

However, the Appeal Court decision did uphold one aspect of a previous Tribunal ruling that may create some challenges in the future, notes Beverly Leavitt, president and chief executive officer of Canada East Equipment Dealers’ Assn. (CEEDA).

“The Tribunal reasoned that contracts at common law are terminable under their written terms or, if there are no applicable written terms, on notice that is reasonable in the circumstances and the Court of Appeal agreed, Leavitt says. “However, that ruling may not be as cut and dry as it may seem, given that Section 3(4) of Ontario Regulation 123/07 sets forth that a dealership renewal shall not be unreasonably withheld by a manufacturer.  The question of whether a non-renewal was reasonable or unreasonable is one which will only be determined by the Courts on a case by case basis.” The Appeal Court decision also levied an additional $25,000 award to Chesterman, based on the conduct of CNH throughout the court process.

CNH Canada ended its…