Country Haven Stables Ltd

Question

Examlex · Accepted Answer

The Answer is Based on R. v. Griffith Saddlery & Leather Ltd. (1986), 14 C.P.R. (3d) 389.
a. The case is meant to explore the issues of resale price maintenance and refusal to supply goods. If the seller can be shown to be in any way directly or indirectly attempting to influence the price at which its goods are resold it will be in violation of the Act. Here, the supplier is refusing to supply goods to the stable on the stated grounds that it sells only to legitimate retail outlets and not to end users. A close look at the facts, however, suggests that there may be other motives for the refusal to supply. The fact that the stated policy does not appear to have been brought to the attention of the buyer or previously enforced indicates that it may be meant to deflect the True motives.
The supplier, not wishing to jeopardize its long-standing relationship with a large buyer, is responding to the complaint in order to protect its own business interests. Whether Country Haven Stables maintains a policy of selling the goods at lower prices is unclear on the facts. The Country Haven store is a legitimate retail outlet, however, and may set prices as it sees fit. The supplier may not refuse to sell to it to prevent the buyer from reselling at lower prices unless the buyer makes a practice of loss leadering. In this case, the supplier is relying on the unfounded objections of its major customer to cease supplying the stable and, thereby, protect its own interests. If the manufacturer is acting on the information that a low price policy is maintained at the stable it may not refuse to sell on that basis. The court in this case decided, however, that if the supplier was refusing to sell on another basis; namely, to protect its relationship with a major customer, there is no prohibition in law of such an action. There was insufficient evidence to prove beyond a reasonable doubt that a low price policy was the grounds for the refusal. The actions of the supplier, therefore, were not in violation of the Act.
b. The buyer may make a complaint to the Commissioner of Competition under the Competition Act. The Commissioner may then investigate the complaint and gather evidence. If the Commissioner finds satisfactory evidence of a violation, he or she may deliver the evidence to the Attorney-General of Canada to bring criminal charges or may bring the matter to the Competition Tribunal.

Country Haven Stables Ltd

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